Paul "The Plumber" Davidson, the maverick entrepreneur who narrowly avoided a stint behind bars at the end of last year, has been forced into bankruptcy, and is being pursued by his creditors for more than £20m.
PKF, the accountant and consultancy firm, has been appointed as joint trustees to look into Mr Davidson's business affairs, and is planning to convene a meeting of creditors in the next few weeks.
Mr Davidson was forced into bankruptcy after Wacks Caller, the Manchester-based law firm, launched proceedings against him last year. He was finally declared bankrupt on 22 December, owing his creditors more than £20m, of which Wacks Caller are chasing £100,000 in unpaid fees.
Norton Rose, the City of Lonndon law firm, is believed to be owed almost £900,000 in unpaid fees, while a string of banks are also thought to be owed substantial seven figure sums by Mr Davidson. In November, Oystertec, the plumbing parts company which Mr Davidson founded and floated, ended a protracted legal dispute over the ownership of a pipe fitting patent, settling with Mr Davidson after more than a year in court.
Mr Davidson was given a three-month jail sentence for contempt of court, due to his refusal to provide certain documentation to Oystertec during the trial. The judge suspended his sentence for 12 months.
Many of Mr Davidson's creditors are likely to end up disappointed once his estate has been liquidated, with his current assets thought to total just £4m.
Philip Long, the head of corporate recovery and a partner at PKF, said: "The responsibility of trustees is to see if any assets can be recovered for the benefit of creditors and we welcome any help or information which might be useful with our enquiries. Information is being gathered and we will shortly be convening a creditors meeting."
Mr Davidson's move into bankruptcy may have implications for his appeal against a £750,000 fine from the Financial Services Authority (FSA). An initial hearing was disbanded last year after a member of the Financial Services & Markets Tribunal was found to have had a conversation with the head of the FSA's disciplinary body after the hearing had begun.
Although the hearing is due to be rescheduled for this year, it is unclear what the FSA will gain in the event of a victory, given Mr Davidson's bankrupt status.
However, the FSA said yesterday it would continue to pursue Mr Davidson in spite of his bankrupt status, and he had applied to the Tribunal for legal aid.Reuse content