Directors banned for accepting orders that could not be fulfilled

A husband-and-wife team have been banned from being directors after their struggling furniture company accepted orders from customers that could not be fulfilled.

Carly Davies, our Debt Control Manager, reports.

George and Williamina Hay were directors of DWH Trading Ltd, which sold adjustable beds and chairs, mostly to elderly and vulnerable customers.

The company was struggling financially by April 2023 but continued to take orders and payments from customers in the following six months before it entered liquidation.

Both directors should have known that most of these orders would never be fulfilled.

George Hay, 65, of Greenacres Crescent, Peterhead, was disqualified as a company director for seven years. Williamina Hay, 61, of the same address, was also banned for seven years.

Mike Smith, Chief Investigator at the Insolvency Service, said: “George and Williamina Hay both took orders from customers in the six months before their company went into liquidation, most of which they knew would not be fulfilled.

“Both George and Williamina Hay have fallen significantly short of the standards we expect of company directors which is why they have now been disqualified until March 2032.”

DWH Trading was established in March 2021 but in just over two years the company had serious cash flow issues.

At the start of April 2023, its bank balance stood at less than £6,000 and the company had no other non-cash assets. The company also had 13 outstanding orders from customers who had paid them £27,250.

DWH Trading had not ordered the goods from its suppliers and the orders remained outstanding at liquidation.

Despite this, George and Williamina Hay allowed the company to take a further 55 orders from April 2023 until the company entered liquidation in October of that year. A total of 42 of the 55 orders with a value of £69,750 were not placed with the company’s suppliers.

The company owed a total of £143,340 to its creditors in liquidation. Insolvency Service investigators have found that at least £97,000 of this was owed to customers for stock which it did not order.

If you would like more information about the issues raised in this article or any aspect of insolvency please contact Carly on 01228 516666 or click here to send her an email.