Director of Exeter wedding venue company has started 2019 with a nine year ban after continuing to accept payments despite knowing the company was insolvent.
Incorporated in October 2014, Mamhead House And Castle Limited (MHAC) was a company that organised events, while also managing the wedding venue, Mamhead House. The venue, a former Georgian country home in rural Devon, had been the destination for high-profile celebrity weddings.
Richard Stuart Fuller (56), of Crockham Hill, Kent, was appointed a director in May 2015 but just over a year later, MHAC entered into creditors voluntary liquidation in November 2016 to shut down the company.
Independent liquidators were appointed to wind-up the company and reported to the Insolvency Service that MHAC had continued to accept deposits from customers after the point it was in trouble.
Investigations discovered that in the January before the company closed down, four creditors had obtained judgments against MHAC, followed by two further judgements in March 2016. The company, however, could not afford to pay the judgements and Richard Fuller caused MHAC to enter into a payment agreement in order to clear the company?s debts.
And further enquiries found that from October 2015, MHAC?s bank statements showed that items were being returned unpaid to the suppliers as there were insufficient funds available. During this time, Richard Fuller also issued cheques even though he knew the funds in MHAC?s account were insufficient to honour those cheques.
Although Richard Fuller knew MHAC could not meet its debts and between February and September 2016 the company incurred losses, he caused MHAC to take deposits from customers and continued trading at the risk of the company?s creditors. Many of these creditors were customers who had contracted the company to organise an event for them.
At liquidation customers were owed just under ?295,000 but only approximately ?205,000 was paid after the company was made insolvent.
On 11 December 2018, the Secretary of State accepted a disqualification undertaking from Richard Stuart Fuller, after he admitted putting customers at unreasonable risk of loss by continuing to accept deposits after January 2016 when he knew that the company was insolvent.
Effective from 1 January 2019, Richard Fuller is banned for nine years from directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company.
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.