Motorhomes boss banned after creditors claim £660k in liquidation
28 Sep 2020
The director of a Scottish-based motorhomes company has been disqualified for eight years after guaranteeing return prices to customers for their vehicles which could not be met
28 Sep 2020
Christine Galloway was a director of St Andrews Motorhomes Ltd, which was set up in June 1993 to buy and sell motorhomes in Central Scotland.
The company ceased trading in July 2018, after a period of financial difficulties, and entered into compulsory liquidation.
A subsequent inquiry by the Insolvency Service discovered that between May 2017 and July 2018 St Andrews Motorhomes entered into 32 brokerage agreements, buying customers’ motorhomes and caravans, and offering an agreed return when the vehicles were sold to a third party.
Investigators established, however, that in at least 18 of the 32 agreements, Galloway sold the vehicles to a third party for less than the agreed return price in the brokerage agreement.
In addition, 21 of the agreements were entered into between January 2018 and May 2018. In this period Galloway knew or ought to have known that the company was insolvent and was unable to pay the agreed return to customers.
Further enquiries established that Galloway entered into new brokerage agreements from May 2017 onwards but used customers’ funds to settle historic liabilities resulting from previous agreements. Following a similar pattern, these historic liabilities accrued from Galloway being unable to meet the agreed return price when the vehicles were sold to a third party.
During the liquidation, customers have claimed losses of just over £660,000 in connection with the 32 agreements. The affected customers also no longer own the vehicles as a result of Galloway’s activities.
In her disqualification undertaking, Galloway did not dispute that she failed to act in the best interests of customers by continuing to enter into brokerage agreements guaranteeing a return price for their vehicles which could not be met.
Rob Clarke, chief investigator for the Insolvency Service, said: ‘Christine Galloway showed a lack of regard for her customers. Not only did she cause hundreds of thousands of pounds of losses, she knowingly put her customers at risk by using funds from new agreements to settle agreements with long-standing customers.
‘Eight years is a significant disqualification and Christine Galloway’s ban should serve as a warning to other directors that they risk being removed from the corporate arena if they do not safeguard their customers.’
By Pat Sweet