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When trying to “do right” goes wrong

The Insolvency Service is seeking disqualification orders against the directors of the charity Kids Company, including Alan Yentob, Camila Batmanghelidjh and 7 others.

Kids Company was a charity, founded in 1996 in South London, with the aim of providing support to vulnerable and troubled children and which went into insolvency in August 2015.  It had a number of high profile supporters, and benefited from a large amount of public money, supported by the government to the tune of £4 million pounds.

In the run up to the insolvency the charity said that it had been overwhelmed by the need for its services, but it soon became clear that there had been concerns about mismanagement for some time amongst donors, and in particular, the receipt of a £3 million pound grant from the government to assist with a restructure, just the week before insolvency.

Although Ms Batmanghelidjh was not a director at the time, she is being pursued as a shadow director.

The bans sought range from 2 years to 6 years.

In most cases, directors try hard to do the right thing. The risk, as in this case, is to continue to “trade” long past the point where reasonable directors would have realised that there was no reasonable prospect of avoiding insolvency.

If you are worried about your duties as a director, please contact Pamela Muir.

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