Press release

Furniture retailers get 5-year bans for accepting deposits and failing to deliver goods

Kevin Jon Grey and Paul Collins, the directors of Manor Furniture (Swindon) Ltd (“Manor”), have been disqualified for five years each for putting customers’ funds at unreasonable risk by accepting deposits when they ought to have known there were no reasonable grounds for believing they would be able to provide the goods.

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Mr Grey’s and Mr Collins disqualification follows an investigation by the Insolvency Service.

Commenting on the disqualification, Sue Macleod, Chief Investigator at the Insolvency Service, said:

This is a case in which the directors clearly accepted deposits from customers at a time when the company was insolvent and not in a position to fulfil those orders.

There is no place in the business community for such behaviour and such actions are likely to lead to investigation by the Insolvency Service and result in censure.

Mr Grey (42) and Mr Collins (41) have given undertakings to the Secretary of State for Business, Innovation & Skill, which prevents them from becoming directly or indirectly involved in the promotion, formation or management of a company for five years from 1 August 2014 and 30 July 2014 respectively.

The investigation showed, and both directors admitted that they caused or allowed Manor to continue to take deposits for the supply of goods, despite knowing the company was insolvent for the following amount and periods:

  • Mr Grey, 59,735, from September to November 2012 and,
  • Mr Collin, £40,614 from September to October 2012.

Notes to Editors

Manor Furniture (Swindon) Ltd was incorporated on 2 November 1998. It traded as a furniture retailer from Unit B, Cheny Manor Industrial Estate, Swindon SN2 2QE

From 4 September 2010 Mr Grey and Mr Collins were the joint appointed directors.

The company went into Administration on 21 November 2012. On 9 July 2014 the Secretary of State accepted a Disqualification Undertaking from Mr Collins, effective from 30 July 2014, for a period of five years. On 11 July 2014 the Secretary of State accepted a Disqualification Undertaking from Mr Grey, effective from 1 August 2014, for a period of five years

The matters of unfitness that Mr Grey accepted in the Disqualification Undertaking were that:

From 12 September 2012 to 11 November 2012 I caused or allowed Manor Furniture (Swindon) Ltd (“Manor Furniture”) to take deposits totalling £59,735 for the future supply of goods when I knew or ought to have known that Manor Furniture was insolvent and that there were no reasonable grounds for believing that Manor Furniture would be able to provide the goods before cessation of trade, in that:-

Manor Furniture was insolvent by 12 September 2012:

  • in the 8 months to June 2012 the Company suffered a net loss of £55,416 and had net liabilities of £48,712. •Me and my co-director met with an insolvency practitioner on 14 August 2012 when the practitioner advised without a cash injection he could not see how Manor Furniture could continue to trade. By 11 September 2012 my co-director expressed clear doubts that the potential investor would invest in Manor Furniture.
  • Manor Furniture had received at least 15 demands for overdue payments and at least 3 suppliers had placed their accounts on hold.
  • Of the £59,735 of deposits subsequently taken, suppliers for goods totalling £20,880 had their accounts on hold at that time.
  • Of the £59,735 deposits taken, £19,883 was after being advised not to take deposits by the insolvency practitioner in a further meeting with me and my co-director on 10 October 2012.
  • In comparison, the directors owed Manor Furniture £316,789 at Administration, which had increased from £291,251 on 30 June 2012.

The matters of unfitness that Mr Collins accepted in the Disqualification Undertaking were that:

  • From 12 September 2012 to 19 October 2012 I caused or allowed Manor Furniture (Swindon) Ltd (“Manor Furniture”), to take deposits totalling £40,614 for the future supply of goods when I knew or ought to have known that Manor Furniture was insolvent and that there were no reasonable grounds for believing that Manor Furniture would be able to provide the goods before cessation of trade, in that:-
  • Manor Furniture was insolvent by 12 September 2012: •in the 8 months to June 2012 it suffered a net loss of £55,416 and had net liabilities of £48,712.
  • Me and my co-director met with an insolvency practitioner on 14 August 2012 when the practitioner advised without a cash injection he could not see how Manor Furniture could continue to trade. By 11 September 2012 I expressed clear doubts that the potential investor would invest in Manor Furniture.
  • Manor Furniture had received at least 15 demands for overdue payments and at least 3 suppliers had placed their accounts on hold.
  • Of the £40,614 of deposits subsequently taken, suppliers for goods totalling £20,209 had their accounts on hold at that time.
  • Of the deposits of £40,614, £3,236 was taken after being advised not to take deposits by the insolvency practitioner in a further meeting with me and my co-director on 10 October 2012.

In comparison, the directors owed Manor Furniture £316,789 at Administration, which had increased from £291,251 on 30 June 2012.

A disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot:

  • act as a director of a company;
  • take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership;
  • act as an insolvency practitioner; or
  • be a receiver of a company’s property.

In addition many other restrictions are placed on disqualified directors by other regulations.

Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings.

Further information on director disqualifications and restrictions can be found at https://www.gov.uk/government/collections/information-about-company-director-disqualification

The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. It may also use powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK. In addition, the agency authorises and regulates the insolvency profession, deals with disqualification of directors in corporate failures, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice.

Further information about the work of the Insolvency Service, and how to complain about financial misconduct, is available from: https://www.gov.uk/government/organisations/insolvency-service

Media enquiries only should be directed to: Kathryn Montague, Media & Campaigns Manager on 0207 674 6910 or Ade Daramy, Media Manager on 0207 596 6187.

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Published 12 August 2014