Suspended sentence for bankrupt who acted as company director

Daniel Ross Patchett, 34, from Kingsthorpe in Lincolnshire, pleaded guilty at Lincoln Crown Court to acting in the management of a company whilst an undischarged bankrupt.

Bankrupts must adhere to a number of bankruptcy restrictions, including not creating, managing or promoting a company, or acting as a director of a company, unless they request and receive specific permission from the court. Breaching these restrictions is a criminal offence.

People who are made bankrupt also have a duty to declare their assets, which will be used to pay off their debts.

Mr Patchett had resigned as a director of his business, DRP Distribution Ltd in February 2018, following his bankruptcy, at which point his wife became sole director. DRP Distribution operated from 2016–19 as an order fulfilment company, providing warehousing, packing and distribution of parcels for third parties who sold products online through Amazon and other services.

Despite his bankruptcy, Mr Patchett continued to act in the management of the company in 2018, and he deliberately concealed his activity and income to avoid making payments to his creditors.

In particular, the Insolvency Service investigation found that Mr Patchett was corresponding with Royal Mail regarding outstanding invoices and payments made, and the company’s accountants also confirmed that most of the communication came from him during this period.

A number of suppliers to the company also confirmed to the Insolvency Service that they understood Mr Patchett was the director of the company.

He was due to be making monthly payments of around £400 to his creditors, but just a month into his bankruptcy he informed the official receiver that he no longer worked at DRP Distribution and therefore could pay only “a token gesture amount” toward his debts. He even provided a P45 form as evidence.

In reality, he continued to manage DRP Distribution and received over £30,000 from the company during his bankruptcy, additional hidden income of nearly £40,000 that hich the company paid to his wife, and a further £28,000 which he withdrew from the business in cash.

All of this money should have been paid to his creditors. Mr Patchett told the court that he had been suffering from gambling addiction.

He was sentenced on 28 September 2022 at Lincoln Crown Court by her honour Judge Sjölin Knight.