The administration of this company which commenced on 17th March 2015, has now been converted to a creditors’ voluntary liquidation with effect from 3rd February 2016. The joint administrators, James Tickell and Carl Faulds of Portland have been appointed as joint liquidators and are now providing creditors with an update on the progress of the winding up.
During the administration we successfully realised the value in the company’s freehold trading premises in Newquay, its fleet of buses and chattel assets. In addition we secured funds in respect of debts due from former employees, balances held by the company’s fuelcard and merchant services providers and amounts due in relation to a travel scheme operated with another local bus company.
As previously reported the company’s freehold property was subject to a fixed charge in favour of the former directors and shareholders, in relation to significant outstanding loan accounts. The charge was released to enable the sale to be completed whilst funds equal in amount to the loan accounts were held in escrow pending a resolution being reached. Following legal advice an agreement was reached with the secured creditors such that a substantially reduced payment would be made in full and final settlement of any further claims against the company. This agreement has now been finalised and the secured creditors’ claims have therefore been discharged. As a result funds will now be available for the preferential and unsecured creditors.
There are still a number of on-going matters that will impact on the level of any dividend to the unsecured creditors. Funds are currently held in relation to pre-appointment VAT refunds that were paid by HMRC but which be may be subject to Crown set-off. Crown set-off could also apply to other recoveries achieved in the administration namely vehicle tax refunds together with any realisations in respect of the Bus Service Operator’s Grant. This aspect is still being clarified.
Our solicitors are currently dealing with two employment tribunal claims from the RMT Union and one former employee seeking to claim protective awards for lack of consultation. Due to the number of individuals involved the claim could be substantial and we are therefore considering the merits of defending the claim or reaching a settlement.
The liquidators will shortly be taking steps to agree the remaining claims of the preferential creditors with a view to discharging these in full as soon as possible. Once all other aspects of the liquidation are finalised, including the on-going employment tribunal claims, we take steps to pay a first and final dividend to the unsecured creditors.
Full details of the administration can be found in the conversion report which can be accessed by clicking this link