Key figures in scheme to undermine insolvency system banned as directors
Karen Mortimer and Joanna Seawright have been disqualified for their part in a scheme designed to subvert insolvency legislation
Both facilitated the Atherton corporate rescue scheme by becoming directors of a combined 138 struggling companies without independently verifying their financial positions, failing to look into the location of more than £42 million in assets and leaving creditors with combined debts exceeding £67 million
Mortimer and Seawright did not dispute their misconduct and agreed to be disqualified for seven years rather than taking the case to court
Two key enablers of a scheme designed to undermine insolvency legislation by allowing business owners to keep their assets and drop debts have been banned as company directors.
Sisters Karen Mortimer, 67, and Joanna Seawright, 54, put the creditors of 138 companies at risk of financial loss after taking control of the businesses which were referred to them by Atherton Corporate UK (Ltd) and Atherton Corporate Rescue Limited.
The Atherton companies provided a corporate rescue scheme where directors of companies in financial distress were encouraged to sell their businesses as an alternative to formal insolvency proceedings such as liquidation.
Most recently filed accounts of the 138 companies showed assets totalling more than £42 million. However, no assets were handed over to GPA KLM Ltd and Summers & May Ltd, the two companies directed and controlled by Mortimer and Seawright.
Mortimer, of San Miguel de Abona, Tenerife, and Seawright, of Mavis Grove, Dumfries, have each been disqualified as company directors for seven years.
Atherton Corporate UK (Ltd) and Atherton Corporate Rescue Limited were shut down in 2024 following Insolvency Service investigations into the scheme.
GPA KLM Ltd and Summers & May Ltd were wound-up by the High Court at the same time.
Dave Magrath, Director of Investigation and Enforcement Services at the Insolvency Service, said:
Karen Mortimer and Joanna Seawright deliberately frustrated insolvency legislation, playing a vital role in the smooth running of the Atherton scheme.
When companies avoid their legal obligations like this, it's not just numbers on a spreadsheet - suppliers, contractors, other businesses and HM Revenue and Customs which are owed money, lose out.
Through signing up to be disqualified as company directors, both have not disputed that they failed in their duties and put creditors at risk of financial loss.
The Insolvency Service's core function is to safeguard the integrity of the insolvency regime, and we will not tolerate conduct that undermines this vital framework or that seeks to enable phoenixism.
Mortimer became the sole director of 138 companies acquired by GPA KLM Ltd via a referral from Atherton between June 2023 and June 2024.
Seawright became the sole director of 31 companies acquired by Summers & May Ltd between April and September 2023. All these companies were subsequently transferred to GPA KLM Ltd.
All 138 companies were presented to GPA KLM Ltd and Summers & May Ltd as being insolvent and having no assets.
However, Mortimer and Seawright failed to verify the true financial position of the companies they were taking control of, relying solely on the word of Atherton and the former directors of the distressed companies.
Neither Mortimer nor Seawright looked into whether the companies still held the assets or how they had been disposed of prior to acquiring them.
The 138 companies had combined debts of more than £67 million and did not trade once acquired by GPA KLM Ltd and Summers & May Ltd.
Both Mortimer and Seawright waited for the companies to be struck-off, or for a creditor to petition for their administration or liquidation.
The Secretary of State for Business and Trade accepted disqualification undertakings from Mortimer and Seawright, and their bans started on Tuesday 21 October.
The undertakings prevent them from being involved in the promotion, formation or management of a company, without the permission of the court.
Another key Atherton scheme enabler, Neville Taylor, who was listed as a director of more than 400 companies, was banned as a director for nine years in January this year.
