FORMER DIRECTORS of the company that emerged after the collapse of Merseyside retailer Ethel Austin could face court action over possible “misspent monies”.

The administrators of Life & Style revealed in their latest report that money may have been “incorrectly used” prior to the company’s collapse last year.

The firm was run by Elaine McPherson, business partner Suresh Ruia, and six other directors.

By law the administrators are required to submit a report to the Insolvency Service into the conduct of company directors in the three years before the firm’s collapse.

“I am not at liberty to discuss the content of this report with any other party than the Insolvency Service,” wrote administrator Simon Bonney of RSM Tennon in a letter to creditors.

“In proceeding with our investigations into the trading of the company prior to our appointment, certain matters have arisen which suggest the joint administrators may be able to take action against various parties for the repayment of monies which were incorrectly used.

“These investigations are ongoing and, if necessary, we will commence court action in order to secure payment of company funds.”

He appealed to creditors to get in touch if they have any relevant information.

The other directors of the company were James Rylatt, Kevin Rylatt, Michael Basso, Martin Barlow, Emma Browne, and Linda John.

Mr Bonney also revealed that the new owners of the company are yet to pay any of the £1.5m price agreed when Life and Style was sold in August.