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Former Paulo Gianni boss blames banking crisis for company collapse
12:18pm Wednesday 26th September 2012 in News
THE former boss of a south Cumbrian bar and restaurant group has blamed the banking crisis for the collapse of his companies and a debt of more than £450,000 owed in tax and National Insurance.
John Alexander Wormall spoke out about his ‘deep regrets’ at the failure of his businesses after being barred as a company director for five years.
Between 2006 and their liquidation in 2009, Mr Wormall was a director of the Paulo Gianni group, which had restaurants in Kendal and Barrow and the Stagger Inn at Stainton and Uplands Hotel in Cartmel. But following an investigation by the Insolvency Service in Manchester, the 42-year-old is now excluded from being a company director and managing or controlling a company in any way until October 2017.
He told The Westmorland Gazette the companies’ failure to pay tax followed his bank’s decision to withdraw an overdraft and loan facility.
In a statement, he said: “I am obviously very disappointed that my involvement with the Paolo Gianni restaurants has ended in the way it has. I worked extremely hard, alongside many other people from the local community, to make the restaurants a success.
“Unfortunately, following the start of the financial crisis in 2008, our bank decided to withdraw the overdraft and loan facilities (on demand) and this had a catastrophic impact on our ability to trade. I personally lost all of my investment in the businesses, which form the majority of the liabilities referred to by the Inland Revenue. I deeply regret the subsequent difficulties, which arose from very challenging economic conditions and not a deliberate attempt to avoid tax.”
The Insolvency Service said the four companies collectively had liabilities of £673,489 at liquidation compared with collective assets of £27,178. Mr Wormall says £450,000 of this was owed to his holding company JPW.
Investigators said Mr Wormall did not dispute that from May 2009 funds worth £232,152 were transferred to a separate holding company of which he was a director and shareholder and that National Insurance and tax was not paid. However, Mr Wormall insisted the transfer was made by the bank to repay the borrowings.
The Insolvency Service said Mr Wormall’s companies paid no PAYE, National Insurance and VAT contributions between August 2008 and September 2009. At liquidation, the money owed to HMRC by the four companies was at least £458,130.
Paulo Gianni restaurants continue to trade under different ownership and management.