David Parker, a tax accountant and business manager with 1980s pop band UB40, and the group’s bass player Earl Acton Falconer, have been banned from being company directors.
The pair, along with Lanval Reginald Storrod, were directors of Reflex Recordings Ltd.
Mr Parker admitted breaching his fiduciary duties as director by squandering, or "deliberately and knowingly causing the dissipation" of more than £250,000 of company assets in December 2013.
The trio were found to have done so without making due provision for subrogated rights and claims of at least two creditors. Reflex was insolvent at the time.
Mr Falconer and Mr Parker were found to have been aware, or they should have been aware, of the subrogated rights at least two creditors held.
Subrogation occurs when a company pays one of its insureds for damages, then makes its own claim against others who may have caused the loss, insured the loss, or contributed to it.
Mr Parker’s ban lasts 11 years, while Falconer and Mr Storrod are prevented from managing or controlling a company without leave of the Court for four years. All three chose to submit a disqualification undertaking to the Secretary of State for Business, Energy and Industrial Strategy, rather than face further action.
Susan MacLeod, chief investigator Insolvent Investigations Midlands & West at the Insolvency Service, said: “In investigating insolvent companies, the Insolvency Service always looks very closely at individuals who demonstrate a disregard for creditors and appropriate action is taken where wrongdoing is uncovered.”
