At the meetings of members and creditors held on 14th March 2017 Carl Faulds and Mike Fortune of Portland Business and Financial Solutions were appointed joint liquidators of the company. The company was incorporated in 2012 to purchase a public house in West Dean as well as run another pub in Chichester that the director had previously operated profitably as a sole trader business.
The pub in West Dean required significant renovations which were financed by loans secured on the two pub’s assets. The renovations were expected to take three months to complete but there was a significant delay of around nine months due to unexpected issues, resulting in lost revenue as well as additional costs being incurred.
Initial trading from the West Dean pub was difficult and profits from the pub in Chichester were used to support it whilst efforts were made to increase turnover to a profitable level. Offers were put in place to attract new customers and although these appeared to work, the pubs location resulted in a lack of repeat customers and passing trade and it struggled.
Although turnover was increasing, it was not sufficient to allow the company to report a profit and in June 2015 the director sought advice. It was concluded that the pub in West Dean should be marketed for sale as it would provide the best outcome for creditors. By this time significant PAYE and VAT liabilities had accrued which the company was unable to settle.
The pub in Chichester was returned to a sole trader business in September 2015, with the liabilities associated with the pub also being transferred. The liabilities included loans that were utilised specifically for the refurbishment work on the West Dean pub but were secured on the Chichester pub’s assets.
Efforts continued to find a purchaser for the West Dean pub and despite continued interest, sales fell through as the parties were unable to raise the necessary funding.
A sale was eventually agreed in August 2016, although the net proceeds would not be sufficient to discharge all creditors, it still represented the best outcome for creditors generally. There were various delays and the sale eventually completed in January 2017. Following completion of the sale, it was concluded that the company should be wound up and Portland were instructed to assist with placing the company in to creditors voluntary liquidation.
Creditors are able to access the first report here