123 Motors Ltd was incorporated in July 2015 and traded as car dealership from premises in Bishops Stortford.
Luc William Peeters (47), also known as Stuart Fallan, was appointed a director of 123 Motors in December 2015 before the car dealership began to struggle and in April 2018 entered into a creditors voluntary liquidation.
123 Motors' liquidation, however, brought the company to the attention of the Insolvency Service who conducted further enquiries into several instances of misconduct.
Investigators established that the car dealership's customers could secure funds to purchase cars through external finance companies 123 Motors had operating agreements with.
But from at least September 2016, Luc Peeters, from Chigwell, Essex, caused 123 Motors to enter into illegitimate side agreements with the same customers.
These additional agreements enabled customers to return the new car to 123 Motors after 12 months. The car dealership would sell the cars on to other buyers, leaving the original customer with no financial liability to the finance companies.
These side agreements, however, were arranged without the consent of the finance companies and breached the validity and enforceability of the loan agreements between the customers and the finance companies, as well as the terms of the operating agreements 123 Motors had with the finance companies.
The finance companies only became aware of what was happening when customers made complaints direct to them after 123 Motors had failed to adhere to the terms set out in the illegitimate side agreements.
One of the finance companies terminated its operating agreement with 123 Motors in January 2018 and demanded the car dealership provide £2.3 million in compensation to cover against all losses, costs, claims and expenses incurred due to the breach of the operating agreement.
A couple months later in March 2018, 123 Motors was issued with a second demand by another finance company to repay just over £42,000 after the car dealership breached operating agreements with them as well.
On 23 September 2020 the Secretary of State accepted a 9-year disqualification undertaking from Luc Peeters after he did not dispute that he caused 123 Motors to enter into Side Agreements with customers without the knowledge or permission of the companies providing finance in respect of the vehicles to which the Side Agreements related.
Effective from 13 October 2020, Luc Petters is disqualified for nine years from acting as a director or directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company.
Martin Gitner, Deputy Head of Insolvent Investigations for the Insolvency Service, said:
Directors have a responsibility to uphold agreements their companies enter into, as well as being honest in their dealings with customers. Unfortunately, Luc Peeters failed on both accounts when he failed to reveal his true activities when he caused 123 Motors' customers to enter into illegitimate contracts.
A nine-year disqualification is a significant ban and recognises the severity of Luc Peeters' actions. This should serve as a stark warning to other directors of the risks they take when they do not uphold company and insolvency law.
Notes
Luc Peeters is of Chigwell and his date of birth is November 1972.
123 Motors Limited (Company Reg no. 9670814)
Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings. Persons subject to a disqualification order are bound by a range of restrictions.
