Insolvent Wine Scammer soured by Winding up Petition
Following a successful winding up petition to have the company compulsory liquidated the director of Bordeaux Fine Wines Limited, a company that sold wine to members of the public, has been handed a maximum 15-year disqualification for failing to purchase at least £9.3million worth of wine which had been sold to investors.
Kenneth Jean-Pierre Gundlach, the sole company director, will not be able to take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership until 2030.
In the documentation given to the Secretary of State for Business, Innovation and Skills, Mr Gundlach admitted that he failed to purchase at least 1,750 cases of wine to supply orders made by the company’s customers.
A blatant disregard for commercial morality
During the investigation, the Insolvency Service uncovered that Mr Gundlach had received over £10million in dividends from the company; this amount was in excess of the value of the wine that had been sold and not supplied to its customers.
At this time, Mr Gundlach continued to market and sell wine to existing investors, despite knowing that previous purchases customers had made had still not been fulfilled.
Mr Gundlach used the proceeds of this scam to fund his luxury lifestyle, including the purchase of racehorses, performance cars, private jet hire and designer clothing and jewellery.
Payments identified on company bank accounts include:
– £626,148 to bloodstock companies for the purchase of racehorses
– £553,803 for the purchase and running of motor vehicles
– £170,000 to a bespoke jeweller
– £141,589 for private jet hire and the associated costs
– £38,500 for an office Christmas party
Creditor claims of over £57million
The petition to wind up Bordeaux Fine Wines Limited was presented by the Secretary of State for Business, Innovation and Skills on public interest grounds. The winding up order was made on 26 February 2014. Since the winding up order was made, the liquidator has received creditor claims to the value of £57,697,885, including a claim from HM Revenue & Customs in excess £15million.
At the hearing, Mr Gundlach admitted a string of serious failings which lacked commercial probity. This included the failure to purchase or allocate cases of wine to satisfy customers’ investments. Between the 3 March 2009 and the winding up of the business, Bordeaux Fine Wines:
– Sold 3,196 cases of wine worth more than £19million to members of the public as an investment
– Failed to apply 1,750 cases of wine to customer accounts at the bonded warehouse in the company’s name
During this time, Mr Gundlach also admitted to:
– Causing Bordeaux Fine Wines to continue to market and sell wine to investors despite previous purchases not being transferred to the investor’s bonded warehouse account
– Failing to monitor and review the correct allocation of wine for each investor, despite knowing that the company had already failed to supply the correct amount of wine
As a result, the wines found in the company’s bonded warehouse following the winding up order could not properly be allocated to a particular investor. Instead, the 780 cases of wine stored in the warehouse were sold by the liquidator for £1,513,150 before costs.
The maximum ban
Welcoming the court’s decision, Paul Titherington, official receiver at the Insolvency Service, said: “It was Mr Gundlach and his salesman who benefited from this company rather than its honest investors. He continued to sell wine when he knew he had failed to fulfil earlier sales.
“Anyone showing such blatant disregard for commercial morality should expect to be banned from running any limited company for a lengthy period of time.”
Insolvent company Directors should be acutely aware selling services and or products that cannot be provided is taken very seriously by the Insolvency Service. If you are in any doubt as to whether your company should be trading or not call 0800 074 6757.