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Car dealer who had illegal contracts with customers is banned from being company director

Time 12 months ago

The director of a car dealership who had illegal contracts with customers that breached arrangements with finance providers has been banned from being a company director for nine years.

Luc William Peeters – also known as Stuart Fallan – was made a director of 123 Motors in Bishop’s Stortford in December 2015, five months after it began trading.

The business started to struggle, though, and entered into a creditors’ voluntary liquidation in April 2018.


That liquidation brought 123 Motors to the attention of the Insolvency Service, which carried out inquiries into several cases of misconduct.

Investigators found that the dealership’s customers could get funds to buy cars via external finance companies with which 123 Motors had operating agreements.

However, from at least September 2016, Peeters, 47, of Chigwell, got 123 Motors to enter into illegitimate side agreements with the same customers, the Insolvency Service said today (Oct 7).

Those agreements meant customers could return their new car to 123 Motors after a year. The dealership then sold the cars to other buyers, freeing the original customer of any financial liability to the finance firms.


The side agreements, however, were arranged without the finance companies’ approval, breaking the validity and enforceability of the loan agreements made between the customers and finance companies, as well as the terms of the operating agreements that 123 Motors had with the finance firms.

The finance businesses only became aware of what was happening when customers complained to them after 123 Motors failed to stick to the terms of the illegitimate side agreements.

One of the finance firms ended its operating agreement with 123 Motors in January 2018 and demanded £2.3m in compensation for losses, costs, claims and expenses caused by the breach.

In March 2018, 123 Motors was issued with a second demand by another finance company to repay just over £42,000 after the dealership broke operating agreements with it, too.

The Insolvency Service said Peeters didn’t dispute that he caused 123 Motors to enter into side agreements with customers without the finance companies’ knowledge or permission.

The disqualification is effective from October 13, 2020.

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.

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‘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.’

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