News |Insolvency

11th October 2022

Bankrupt who breached terms given suspended sentence

A bankrupt who acted as a company director has been handed a suspended prison sentence of twenty months.

Daniel Ross Patchett has been sentenced to two hundred hours community service and twenty months imprisonment, suspended for eighteen months, for acting as a company director while subject to bankruptcy restrictions.

Thirty-four-year-old Patchett was an owner and director of DRP Distribution Ltd until his bankruptcy in February 2018. He subsequently resigned from his role in the business, leaving his wife as the company’s sole director.

However, an Insolvency Service investigation found that Patchett had “continued to act in the management of the company in 2018” by, for example, chasing unpaid invoices and corresponding with the company’s accountants. Some of DRP Distribution’s suppliers were under the impression that Patchett was still a director of the company.

During his bankruptcy, Patchett received more than £30,000 from the business and withdrew in cash £28,000 from the company’s bank account.

In addition, he concealed his income to avoid paying his creditors – quickly ceasing agreed monthly payments of £400 after telling the Official Receiver that he could pay only “a token gesture amount” as he had stopped working at DRP Distribution.

Patchett was sentenced on 28th September 2022 by Her Honour Judge Sjölin Knight at Lincoln Crown Court. His sentence comprised twelve months for offences under section 356 of the Insolvency Act (regarding false statements) and eight months for offences under section 11 of the Company Directors Disqualification Act, which states that:

“It is an offence for a person who is an undischarged bankrupt to act as director of, or directly or indirectly to take part in or be concerned in the promotion, formation or management of, a company, except with the leave of the court.”

DRP Distribution was an order fulfilment company, active from 2016 to 2019, providing various services for third parties who sold products through online platforms.

“Daniel Patchett was fully aware both of his responsibility not to act as a director of a limited company given he was bankrupt, and also of his duty to disclose all assets and details of his income to the Official Receiver”, said Julie Barnes, Chief Investigator for the Insolvency Service.

“He chose to flagrantly disregard these obligations for his own personal gain, leaving creditors out of pocket. We will always prosecute such cases to protect the business community and the public from financial harm.”

Patchett, of Market Raisin in Lincolnshire, told the court “he had been suffering from gambling addiction.” He pleaded guilty of acting in the management of a company whilst an undischarged bankrupt.

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