120 hours unpaid work and community order for banned director
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A Salford businessman has been handed a longer board room ban and unpaid community work after running a ‘phoenixed’ company.
Isaac Jacobson, 51, was already serving a seven-year disqualification undertaking.
He was sole director of Jacob Isaacs & Co Ltd, incorporated in August 1998 and working in the wholesale trade until its liquidation in July 2017.
As part of the liquidation, the Insolvency Service started an investigation into the company and Jacobson.
The director was requested to provide the books and records for Jacob Isaacs & Co Ltd on four occasions but failed to do so.
The Business Secretary accepted a seven-year disqualification undertaking from Jacobson meaning he could not act or become involved in the promotion, formation or management of a company, without prior approval from the court.
A criminal investigation into Jacobson also began.
Manchester Crown Court heard that, shortly prior to the liquidation of Jacob Isaacs & Co Ltd, a new company was set up, J Isaacs & Co Ltd, in February 2017 with Jacobson’s wife listed as director.
In a process known as ‘phoenixing’, the new company picked up where the liquidated company left off, with invoices showing they had retained the same clients and trade.
Jacobson was invited to interview with the Insolvency Service to explain his conduct and admitted that his wife was not involved in the running of his new company, J Isaacs & Co Ltd, and that he was a de facto director running the business with no help from anyone else.
This role was in breach of his disqualification undertaking.
Isaac Jacobson pleaded guilty to one count of acting as a director while disqualified, one count of acting as a director of a company known by a prohibited name, and one count of failing to ensure that Jacob Isaacs & Co Ltd preserved its accounting records at Manchester Magistrates Court on June 18.
On July 21, he was sentenced to 120 hours of unpaid work, and a 12-month community order. In addition, he has also been disqualified as a director for 10 years.
Julie Barnes, chief investigator at the Insolvency Service, said: “Isaac Jacobson’s conduct at his first company was so serious that he was banned for seven years.
“Rather than respect the terms of his ban, Jacobson started a phoenix company and continued in his role, attempting to hide this by putting directorship in his wife’s name.
“This is serious misconduct suitable for criminal proceedings and his sentence should act as a deterrent to other directors who may consider not taking their duties seriously.”