(1) The court may make a compensation order against a person on the application of the Secretary of State if it is satisfied that the conditions mentioned in subsection (3) are met.

(2) If it appears to the Secretary of State that the conditions mentioned in subsection (3) are met in respect of a person who has offered to give the Secretary of State a compensation undertaking, the Secretary of State may accept the undertaking instead of applying, or proceeding with an application, for a compensation order.

(3) The conditions are that -

(a) the person is subject to a disqualification order or disqualification undertaking under this Act, and

(b) conduct for which the person is subject to the order or undertaking has caused loss to one or more creditors of an insolvent company, or a company which has been dissolved without becoming insolvent, of which the person has at any time been a director.

(4) An "insolvent company" is a company that is or has been insolvent and a company becomes insolvent if -

(a) the company goes into liquidation at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up,