Company director “put creditors at risk” after continuing to trade in insolvency
A company director has been banned from running further businesses after he continued to accept deposits from customers after the company entered into creditors voluntary liquidation (CVL).
Mamhead House And Castle Limited was launched in October 2014 by sole director Richard Stuart Fuller to organise events and manage a wedding venue.
However, after a little over a year of trading, the company fell into financial difficulty and entered into liquidation in November 2016.
Independent insolvency practitioners, who were appointed to wind up the company, discovered that the director had “continued to accept deposits from customers after the point it was in trouble”.
It later emerged that in the January before the company entered into liquidation, four creditors had obtained judgments against the company, followed by two further judgments in March 2016. Mamhead House And Castle Limited was unable to pay the judgments and director Mr Fuller causes the company to enter into a payment agreement in a bid to clear the company’s debts.
Further investigations also found that from October 2015, the company’s bank statements showed that items were being returned unpaid to suppliers as there were “insufficient funds available”. The director also admitted to issuing cheques despite knowing that the company could not afford to pay them.
In the face of these difficulties, the director had continued to take deposits from customers and continued trading “at the risk of the company’s creditors”.
Mr Fuller accepted a disqualification in December 2018, admitting he had put customers at “unreasonable risk of loss by continuing to accept deposits after January 2016 when he knew that the company was insolvent”.
The disqualification order stops Mr Fuller from running further companies for a period of nine years.
Dave Elliott, Chief Examiner for the Insolvency Service, said: “Richard Fuller was fully aware the company was struggling to pay its debts and could not afford to continue trading. But this did not deter him from taking new deposits from customers, even though their money was at risk.
“This ban should serve as a warning to other directors tempted to abuse clients and neglect their duties that they could be investigated and lose the privilege of limited liability trading.”