We haven’t heard any report about this trash folder issue. Can you re-produce this behaviour without running Formativ, may be you can try to disable Formativ using the Control Panel Applet (Start – Control Panel – Advansys Formativ – General – Disable All). After the test, you need to go through the same steps to enable Formativ.
Which version of GroupWise client you are running (See Help – About GroupWise)? We have received few report about the earlier version of GroupWise 7 client (http://www.advansyscorp.com/forums/topic/8771001341/) and we highly recommend to use the latest point release.