Directors took cash despite owing clients
THE directors of a Bolton debt management firm took dividends worth £70,000 after the business collapsed owing clients thousands of pounds.
Ali Abadi and Jennifer Goddard also took wages arrears of £9,600 to reduce their overdrawn loan accounts even though the firm, 3 Step Finance, owed customers £51,000.
The transactions are detailed in a report by the Insolvency Service which investigated the firm, and its successor 123 Finance, and successfully petitioned for them to be wound up in the High Court.
The businesses worked with people struggling with debt and offered to arrange payment plans with creditors in return for a fee.
3 Step Finance, formerly Global Debt Solutions, went into liquidation in November owing clients £51,000. The directors started 123 Finance and transferred some of these clients but they failed to keep a reliable record of client creditor payments.
The court heard the directors had operated an unsustainable business model and traded the companies in a manner which was misleading and of little or no commercial benefit.
The grounds for winding up the companies included: Failure to maintain adequate records; lack of transparency in relation to the ownership of the companies; abuse of linited liability status; and failing to co-operate with the Company Investigations branch of the Insolvency Service.
