A director, working in the wholesale trade, has been sentenced to 120 hours unpaid work and community order after he attempted to run “a phoenixed company”.
Prosecuted Isaac Jacobson from Salford, was already serving a seven year disqualification following the liquidation of his company, Jacob Isaacs and Co Ltd.
Jacobson was sole director of Jacob Isaacs and Co Ltd, incorporated in August 1998, until its liquidation in July 2017.
As part of the liquidation, the UK’s insolvency service started an investigation into the company and Jacobson. The director was requested to provide the books and records for Jacob Isaacs and Co Ltd on four occasions but “failed to do so”.
At the time, 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 the company a new company was set up, J Isaacs and 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.
According to officials, 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 and that he was a “de facto director running the business with no help from anyone else”.
On 21 July, 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.”