The traffic commissioner for the North West has refused a licence application by an operator in Lancashire after finding that it could potentially be a ‘phoenix’ business.
TC Gerallt Evans said Kirkham Box NW had continued the business of Kirkham Box Company (KBC) after its liquidation earlier this year and was relying on assets previously owned by the insolvent firm.
Kirkham Box NW applied for a restricted licence authorising the use of one HGV, with Mark Unwin listed as sole director.
Unwin was previously the director of KBC, but its licence was revoked after it entered insolvency proceedings on 9 February 2023.
However, Unwin did not notify the TC’s office of any change in KBC’s financial situation and he only mentioned the liquidation in the new licence application, explaining that it had become insolvent due to the pandemic and other trading issues.
In his written decision, TC Evans said that in correspondence, Unwin had explained that assets and goodwill had been bought by the applicant company for £14,000.
But the liquidator’s statement of affairs showed that KBC’s plant and machinery had a book value of £70,000.
A week before a public inquiry was due to be heard in Warrington, Unwin told the TC’s office he would not be attending as he was abroad on a family holiday and was about to get married.
Nevertheless, Evans decided to go ahead with the inquiry in Unwin’s absence.
“Based on the evidence that is available to me, I find this application does have features meeting the description of a ‘phoenix’,” the TC said.
“It is evident that that applicant company has continued the business of Kirkham Box Company after its liquidation using assets previously owned by the latter company.
“I have not been provided with any evidence to reassure me that the transfer of assets was undertaken with the approval of the liquidators at the time.
“I note the price paid by the applicant company for the machinery and plant falls well below the book value given in the statement of affairs.”
Evans added that the conduct of the applicant company and Unwin amounted to behaviour that was likely to result in an unfair competitive advantage over other operators and he refused the licence.