After failing to manage client’s funds and following an Insolvency Service investigation, debt management boss Josephine (Josie) Broadstock has joined her husband on the disqualified director list.
Smooth Financial Consultants Limited (Smooth) which traded as The Debt Advice Centre was incorporated in 2005. Mark and Josie Broadsock along with Robert Jones were directors of the company. Smooth made debt management plans and paid creditors on behalf of individuals who struggled to make payments themselves to their creditors, in return for a monthly fee.
On 2 August 2013 Smooth went into administration with an estimated deficiency as regards to creditors of £967,569. On 24 July 2014 Smooth went into creditors voluntary liquidation.
During a 5-day trial in 2018, the court heard that:
- Funds belonging to clients should be held in a separate ‘ring fenced’ client account. However, it was found that Smooth made transfers from the client account to its own company account.
- These transfers from the two different accounts were used for running costs and for the benefit of the directors. Between the three directors they received salaries and dividends of £114,992 in 2013.
- In this time, Smooth failed to pay creditors an estimated amount of £572,001 and after a winding up petition was presented against the company in 2013, Mark Broadstock moved £109,512 from the client account to a connected company.
- It was found that none of the funds were used for the benefit of the clients and after the company went into administration, only £49,678 was recovered from the connected company.
The Secretary of state accepted a disqualification undertaking from Mark Broadstock in June 2017 before the court hearing. On 8 August 2018 the court made disqualification orders against Josie Broadstock and Robert Jones, which started on 29 August 2018. Josie received a disqualification ban for 8 years, whilst Robert received 7 years.
For more information on bankruptcy, liquidation, administration and all the other insolvency procedures, or to take advantage of our free consultation, please telephone Stella Flemmings on 01377 257788, 01724 230060 or 01904 520116 and she will make you an appointment with one of our insolvency professionals at our Driffield, Scunthorpe or York offices.