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Directors’ disqualification: insolvency practitioners and the decision-making process

The Company Directors Disqualification Act 1986 (CDDA) instituted, inter alia, a mechanism whereby directors of failed companies can be disqualified from holding office in the future as the result of an application to the court by the Secretary of State, or in the case of compulsory liquidators, the official receive and a subsequent finding by the court that the director is unfit. The operation and effect of the CDDA has been the subject of speculation in the national press, other media and comment from insolvency practitioners since its inception. Most of this comment has focused on the role of the DTI and on its perceived failure to take steps to disqualify directors in sufficient numbers.