A business owner has been banned from running further companies after continuing to take money from customers even after his company entered into insolvency.
Aidan Mark Newman was the sole director of Montrose Design & Build Limited, a residential building company incorporated in February 2015.
However, after just two years of trading, the company “struggled to be profitable” and had to cease trading before entering into Creditors Voluntary Liquidation (CVL). The company was subsequently wound up in January 2017.
It was discovered by liquidators appointed to close the company that “large amounts of money were owed to customers as their building work had not been completed”, despite having made repeat payments to the contractor.
The Insolvency Service, conducting the investigation, found that Mr Newman had allowed the company to accept payments totalling more than £190,000 from eight customers with existing claims in the liquidation.
Mr Newman had then used payments from one set of customers to fund building work for another, requesting that payments be made “earlier than originally scheduled”.
For his failure to properly follow the rules of insolvency and cause losses to creditors in the region of around £390,000, the director was banned for six years from becoming involved in the promotion, formation or management of another company.
Commenting on the case, Anthea Simpson, Chief Investigator for the Insolvency Service, said: “Aidan Newman continued to trade despite knowing Montrose was insolvent and caused financial distress to his clients.
“This ban should serve as a warning to other directors that if they continue to run an insolvent business in a way that is detrimental to either its customers or its creditors, they will be investigated and as a result could lose the protection of limited liability trading.”
