Property firm director receives 11-year boardroom ban

The former director of two property firms has been disqualified from holding boardroom positions for 11 years relating to unfit conduct.

Phillip Wright’s disqualification began from August 14, 2020.

It is in connection with two companies where he was a director, FSL Properties Ford Lane Ltd, and Fresh Start Living Ltd.

He does not dispute an Insolvency Services report that said FSL Properties Ford Lane Ltd went into liquidation on December 19, 2016, with a total deficiency of £894,582.

Fresh Start Living Ltd went into liquidation on December 9, 2013, with a total deficiency of £2,335,745.

The Insolvency Service found that Mr Wright, 62, of Salford, caused, or allowed, Fresh Start Living to provide incorrect, and/or misleading marketing information, between June 26, and December 12, 2011, to investors to induce them to enter into reservation agreements.

Fresh Start Living’s website stated that:

  • A site situated at Ford Lane, Salford, had been acquired for a student development, but at the time of the statement, the Ford Lane site was owned by a third party.
  • Construction would begin soon but no formal application for planning permission for the student development had been made by the company. In fact, on 17 November, 2011, and in response to the company’s pre-planning application, the local authority expressed concern regarding providing planning permission for the student development.

Between 30 June 2011, and 6 July 2012, he caused, or allowed Fresh Start Living to procure reservation fees totalling £236,999 from investors despite there being no planning permission for the student development. In particular, investors paid fees totalling £76,000 after 17 November, 2011, being the date that the local authority expressed concerns regarding providing planning permission for the student development.

Regarding FSL Properties Ford Lane Ltd, the Insolvency Service found that he caused or allowed FSL to enter into transactions which were to the benefit of connected parties and to the detriment of its investors at a time when he knew or ought to have known that FSL was insolvent.

In particular, and in relation to the grant of the leasehold:

  • On 2 June 2015, FSL entered into an agreement with a third party to grant a lease over the Ford Lane site.
  • The deposit purchase price was stated to be £400,000, with further provision for deferred consideration of £1,190,000.
  • The deposit purchase price of £400,000 was paid to a connected party by way of the loan novation agreement.
  • The connect party is connected to FSL by virtue of the fact that he was a director of both FSL and the connected party, and, furthermore, FSL is a wholly owned subsidiary of the connected party.
  • Prior to the grant of the lease, £727,276.68 was owed by FSL to the connected party and £275,661 was owed to investors in relation to deposits and reservation fees. Following the grant of the lease, FSL’s indebtedness to the connected party was reduced by £400,000 while nothing at all was paid to investors.

Fresh Start Living was wound up in December, 2013, following a successful petition by an investor.

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