Directors often believe that they can only dispose of a claim on an undertaking basis by accepting the period on offer as set out in the Section 16 letter. This is not the case. Undertakings can be negotiated downwards, normally following a detailed letter back to the Insolvency Service setting out the grounds for defence.
It is always in the directors’ interest to try and secure the lowest possible period of undertaking. Apart from the obvious fact that the disqualification period itself will be shorter, a reduced period can also assist in seeking permission to remain a director of a company despite being disqualified. It could have important implications on a person’s future business career.