Clark Sinclair Limited, a Manchester-registered company that took £123,000 from 51 struggling businesses, was shut down by the High Court on Thursday (October 29). The government's Insolvency Service said the firm took advantage of companies with debts by providing 'misleading services'.
Misleading services to struggling businesses
The company offered 'alternatives' to formal insolvency to directors of companies in financial difficulty. It offered to arrange sales of 'financially distressed' businesses for £1 whilst charging fees of between £2,500 and £6,800.
The shutdown follows an Insolvency Service investigation.
Investigator's statement
Insolvency Service Chief Investigator, David Usher, said: "Clark Sinclair Limited took advantage of struggling businesses by offering directors a misleading route out of their company’s debts, charging thousands of pounds for the service."
He added: "Selling a company does not prevent its former directors’ conduct from being investigated if it later enters liquidation. Clark Sinclair Limited not only deceived their customers but undermined the insolvency sector."
Details of the investigation
Clark Sinclair Limited’s promotional emails suggested that directors could avoid reputational damage by selling their companies before liquidation, telling clients that sales could be completed within days. The shares would be sold for £1, while Clark Sinclair charged brokering fees of between £2,500 and £6,800.
Investigators identified £123,052 in customer payments across two company accounts and identified 51 companies that appeared to have changed ownership following payments to Clark Sinclair.
The company also misrepresented the role of insolvency practitioners, incorrectly suggesting they sold company assets solely to pay their own fees. Clients were not warned that the various actions they were advised to take could breach their duties as directors.
Clark Sinclair’s registered sole director told investigators that they had never heard of the company, raising concerns that they were appointed without their knowledge or consent. Investigators were unable to identify who was behind the company.
