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Evidence grows of wrongful trading
Page 8
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CM INVESTIGATION
• by Dominic Perry
New evidence of potentially wrongful trading has emerged by several of the directors, shareholders and employees of Cardiff operator CDL Logistics while running a previous firm.
CDL, which had become embroiled in a row with pallet network Palletways over network coverage and alleged debts (CM 20-26 March), was originally called GSS Sameday but only changed its name late last year. Its directors are Rhianydd Mitchell and Mark Rees and its company secretary is William Bailey, who is also a shareholder alongside Christine Hillier. Additionally it employs disqualified director Mike Mitchell, husband of Rhianydd and brother of Christine, as a salesman.
But documents obtained by CM paint a vivid picture of the conduct of Mitchell and his friends and family—although these do not include Mark Rees—surrounding a previous firm. Global Specialist Services.
In his investigation report, the company's liquidator shows that:
• Over 132,000 was paid to two firms, GSS LLP and MCM LLP. run by Bailey. Mark and Christine Hillier and Mike and Rhianydd Mitchell while the company was almost certainly insolvent and not paying its creditors.
it The company continued trading for almost a year despite knowing it was unable to pay its creditors, worsening its debts by £167,000.
Mike Mitchell acted as a director despite never being listed on any company information. The directors were Christine Hillier and John Davies.
the liquidatur writes: -It is possible that litiga
ton in respect of the matters outlined in this report may result in a beneficial outcome.
"[But] I do not, at present, have any guarantee that either of these limited liability partnerships have sufficient funds, or inclination, to repay the monies."
Officers from Global Specialist Services, including Mike Mitchell, first met with insolvency practitioners in June 2001 when it had trade creditors totalling £184,035 and decided they wanted to pursue a Creditors Voluntary Agreement (OVA) in a bid to stave off closure.
However, the liquidator says that considerable delays caused by the company directors meant no action was taken until January 2002, when the insolvency practitioners were informed that the company had ceased trading and GSS LLP had taken over its business. Global Specialist Services was then liquidated—when it was discovered that it now owed creditors £351.703.
Also at least one creditor, K&L Distribution, remains confused over which company it was dealing with. The majority of its invoices, which are still unpaid, were for GSS Sameday—the company that is now CDL Logistics. However.
Distribution maintains that it was told that it had peen invoicing the wrong company and had, in tact, been trading with Global Specialist Services. To date it remains over £5,000 out of pocket.
CM has tried to contact both Mike Mitchell and Christine Hillier through CDL Logistics but we were unable to put our questions to them. We were also unable to contact either Jim Davies or William Bailey. CDL boss Mark Rees, who was not involved with Global Specialist Services, says that Mitchell is now "off sick".
• E-mail: dominlo.perry(*rbtoo.uk