Suspended sentence for bankrupt who acted as company director

A Lincolnshire businessman who continued to manage his company whilst bankrupt has been sentenced to a 20-month suspended sentence and 200 hours of community service.

Daniel Ross Patchett was a director of Cleethorpes-based order fulfilment company DRP Distribution until his resignation in February 2018.

Patchett relinquished his role after being declared bankrupt, but continued to run the firm, deliberately concealing his activity and income to avoid making payments to his creditors.

He is understood to have made tens of thousands of pounds in the process.

An Insolvency Service investigation found that Patchett had corresponded with both Royal Mail and the company’s accountants during the period, and a number of DRP’s suppliers reported that they thought he was still director.

A month after his bankruptcy Patchett told the Official Receiver that he no longer worked for DRP and could only pay a “token” amount to his creditors.

However, in a clear breach of the Company Directors Disqualification Act 1986 and the Insolvency Act, Patchett continued to manage DRP, receiving more than £30,000 from the company and withdrawing a further £28,000 from the business in cash.

Patchett’s wife also received nearly £40,000 from the firm.

Patchett told the court that he had been suffering from gambling addiction.

He was sentenced on 28 September 2022 at Lincoln Crown Court by Her Honour Judge Sjölin Knight.

Julie Barnes, chief investigator for the Insolvency Service, said: “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.

“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.”

DRP Distribution operated from 2016 to 2019, providing warehousing, packing and distribution services for third-parties who sold products online through Amazon and elsewhere.