Company director caused finance firm to lose £177,000

The Insolvency Service made a successful application to have Terence Coventry's bankruptcy restrictions extended to seven years.
The Insolvency Service made a successful application to have Terence Coventry's bankruptcy restrictions extended to seven years.

A company boss from Gainsborough has had his bankruptcy restrictions extended for his role in a finance firm losing more than £177,000.

Terence Coventry, 39, was appointed the sole director of Alliance Traffic Services Ltd in April, 2016.

It was a business that specialised in the management of traffic and pedestrians, including at major events.

However, it went bust after Mr Coventry’s “conduct in running the business fell well below the standards required”, a court heard.

Only a month after taking charge, Mr Coventry entered Alliance Traffic Services into a factoring agreement, which he personally guaranteed.

The terms of the agreement were that an independent finance company would buy his firm’s invoices in return for advanced finances.

However, Lincoln County Court was told that Mr Coventry abused his position of trust as a director and caused Alliance Traffic Services to breach the terms and conditions of the agreement.

He failed to ensure sales invoices were correctly produced, and some customers paid money directly to the firm’s bank account even though it was due to the independent finance company, which duly lost more than £177,000.

Alliance Traffic Services duly went into compulsory liquidation and was wound up in November, 2017.

With a substantial shortfall owed, the finance company made claims against guarantees Mr Coventry was personally liable for and, in January, 2018, he was made bankrupt as he could not afford to pay the debt.

Bankruptcy restrictions typically last for 12 months. But the Insolvency Service has now successfully applied to the court for Mr Coventry’s to be extended to seven years because of his abuse of trust.

Gerard O’Hare, official receiver for the Insolvency Service, said: “Mr Coventry’s conduct in running the company fell well below the standards required of an individual in business, and this led to his insolvency.

“The seven-year restriction should help to protect the business community and serve as a warning to others not to act in this way.”