A contentious program that has enabled more than 1,000 company directors to eliminate debts totaling millions of pounds remains in operation, despite government efforts to curtail its activities.

The Insolvency Service shut down seven firms linked to a group alleged to have “deliberately undermined the insolvency framework” in September. However, investigations reveal that the problematic scheme persists.

The organization known as Atherton has been promoting its services as a “legal alternative to insolvency practitioners.” Yet, a government inquiry determined that the initiative “encouraged directors to liquidate their assets,” effectively denying creditors millions in owed finances.

The government asserts that Atherton prompted directors facing financial challenges to “sell their businesses and circumvent liquidation” through a system designed to allow business leaders of struggling companies to separate themselves from failure.

It argues that Atherton misled directors by asserting they could retain their company’s assets, continue operations through a newly created business, and avoid accountability for outstanding debts.

According to an analysis conducted by Tax Policy Associates for The Times, directors have shifted debts, potentially amounting to tens of millions of pounds, to Atherton, including liabilities owed to HM Revenue & Customs. Atherton typically appoints new directors and holds off while companies face dissolution or insolvency.

Reports suggest that the Insolvency Service is contemplating whether to take action against directors who have employed the Atherton scheme.

Among those stepping in as directors for Atherton clients is Neville Taylor. Despite directing numerous businesses, little is publicly known about Taylor.

His name appears on various filings at Companies House, covering a wide range of sectors from satellite technology to childcare facilities, yet few online details are available. Creditors and insolvency professionals attempting to locate him often encounter significant challenges.

Involvement with Taylor often ends in insolvency or dissolution, raising questions among insolvency practitioners about his existence and his role in the businesses.

Documents indicate that the scheme’s participants have included businesses formerly led by Piers Adam, known for his hospitality ventures such as Mahiki and Whisky Mist; Mat Feakins, a former Conservative chair in Monmouthshire; and Paul Wildes, a businessman linked to various leisure operations including Port Vale football club.

The operation is straightforward: a director pays a fee—usually in the thousands—and subsequently sells their company to Atherton for £1. Atherton then places Taylor or others in director positions as figureheads.

No strategy is made to revitalize the business, recover funds for creditors, liquidate assets, or operate the firm in a traditional manner. If creditors do not take action—a situation not uncommon when the recovery cost would exceed the sum owed—the company is likely to be dissolved. This outcome benefits both the users of the service and its operators, although it does little for creditors seeking repayment.

In instances where an insolvency practitioner has been assigned to a company with Taylor at the helm, complaints arise regarding the inability to track him down or access the company’s documentation. For instance, the administrator for Lodent Precision reported that the firm seemed to lack competent management.

Companies engaging in this scheme generally receive minimal representation in court during winding-up petitions.

The scheme has been touted as a means for distressed firms to shed liabilities while allowing directors to retain assets that should have been utilized to satisfy creditor claims.

Documents suggest that some businesses immediately establish new “phoenix” firms to continue trading without the burden of pre-existing debts, which are absorbed by Atherton. Certain entities sold to Atherton have carried debts in the millions.

Emails marketing the service have been sent to business owners, asserting that it can “protect cash on hand, assets, and debtor lists,” while allowing directors to maintain operations.

National Company Rescue, an organization advocating the Atherton program, characterized it as an alternative to formal insolvency processes, claiming that directors would “lose control of their funds, inventory, and assets” otherwise. They assert that Atherton’s offerings are “different” from traditional insolvency, where company assets might be sold off to settle creditor accounts.

By facilitating the retention of assets, customers can sidestep the “reputational fallout” tied to being identified as directors of insolvent companies, according to National Company Rescue’s promotional materials.

Mike Hartley, a managing partner at Global Corporate Solutions, noted that one of his clients had suffered losses from two separate businesses that used the Atherton service, both of which were managed by Taylor, who quickly folded them into new “phoenix” companies.

Hartley asserted: “This strategy allows irresponsible directors to disown significant debt and reenter the business world unchecked. The Insolvency Service must evaluate whether these directors have violated their fiduciary and legal duties.”

Despite the actions taken by the Insolvency Service, National Company Rescue continues to promote the Atherton scheme. John Irvin, 57, who leads Atherton, acknowledged that new companies have been launched to sustain this initiative.

Irvin described the scheme as a legitimate business sale process. He acknowledged that parts of the system may not appeal to the Insolvency Service and reported that they have adjusted their practices, stating they do not offer guidance to directors.

Irvin claimed that none of the directors appointed by Atherton had faced disqualification actions from the Insolvency Service and maintained that they were cooperative with insolvency inquiries.

Irvin also stated he was unaware of National Company Rescue marketing the service as a means to retain company assets and accounts, asserting that this feature is not part of their operations.

National Company Rescue is identified on LinkedIn as a “trading name for Atherton Corporate Partners LLP,” with Irvin serving as a director from its founding in 2017 until just after the Insolvency Service’s statement regarding the scheme emerged.

Ross Thomson, the previous owner of National Company Rescue, was known to have acted as a director to take over client enterprises through Atherton. Both Thomson and Barrie Jones, the current owner, could not be contacted for comments.

Piers Adam, who played a role at Guy Ritchie’s wedding to Madonna in 2000, managed Craigellachie Hotel Trading from September 2016 to October 2018. The firm’s last financial report indicated liabilities of £3.5 million due within one year. After stepping down as director in 2018, he was succeeded by Thomson, who prompted the company’s court-registered wind-up before its insolvency process. Reports affirm that the hotel continues to operate.

A representative for Taylor remarked that he has been responsive to insolvency practitioners and reached out to creditors “within 12 months of his appointment.” She noted his compensation ranges between £500 and £1,000 per appointment, much lower than the scheme operators.

She further reported that Taylor had faced 49 interviews with Insolvency Service officials related to his directorial roles and has “not been subject to any proceedings.”

She emphasized that Taylor reminds directors of their obligations, particularly when redundancies occur post-appointment. However, she pointed out that some directors paying Atherton may attempt to “evade their responsibilities,” leading to non-cooperation.

Stephen Hunt, a partner at Griffins, an insolvency specialist, indicated that both operators and participants of the Atherton scheme face potential violations of several insolvency regulations. He expressed concern that directors might endure ramifications for years, while he fears the scheme’s architects will evade justice.

Irvin maintains that the program operates legally.

The Insolvency Service is perceived to be aware of the scheme’s ongoing activity and is deliberating if they should take action against its users. They declined to discuss Taylor’s situation.

Attempts to reach Adam and Wildes for commentary received no response, as did outreach to Feakins.

HM Revenue & Customs also opted not to comment.

Critics Claim Only Atherton Benefits

The Times sought to contact multiple directors associated with the Atherton program, with most refraining from comment. One individual, on the condition of anonymity, disclosed that their association with the service is currently under HMRC investigation.

Another personal account described the extensive problems incurred from using the service. This individual noted they were under scrutiny from the Insolvency Service and advised others against the Atherton route, labeling it detrimental to creditors and perilous for directors, stating, “The only beneficiaries are Atherton.”

Piers Adam, whose hospitality ventures have included Craigellachie Hotel Trading, listed unpaid debts of £3.5 million owed in its last accounts before its liquidation process commenced.

Having acquired The Craigellachie Hotel in 2014, Adam oversaw its trading arm until transitioning the directorship to Ross Thomson following his step down in 2018. The company, then rebranded as Skyfall Ventures, entered liquidation the following year while the hotel remains operational.

Paul Wildes, associated with the Wildes Group—comprising hotels and spas—last served as director of Kings Gap Trading until January 2023, after which he was succeeded by Neville Taylor. Despite facing potential liquidation, he filed an objection against being struck off the register last June. Wildes stated his group divested the hotel two years ago but did not comment on the sale or the Atherton connection.

Liquidators from Woden Park, a solar venture formerly owned by Mat Feakins, remarked on its handover to Taylor in 2023 after incurring substantial legal costs. The firm folded shortly thereafter, with liquidators revealing Feakins had sold its assets to Atherton before directing a £3,000 payment to them and then appointing Taylor.

They noted that Feakins “may now be residing in Kosovo” and stated they had sought responses from him and Taylor regarding outstanding matters without success, contemplating claims against Feakins amounting to £325,892. A spokesperson for Taylor indicated that the requested documents had been provided to the liquidators.