We have recently passed the anniversary of our appointment as joint liquidators of the company and therefore are providing creditors with a report on the progress of the winding up. As reported previously the company was placed in to administration on 17th March 2015. The majority of the company’s assets were realised during the administration with the surplus funds being transferred to the liquidation bank account upon conversion in February 2016.
There have been ongoing matters during the liquidation which have prevented us from paying a dividend to unsecured creditors, principally in respect of a protective award claim being brought against the company for lack of consultation in relation to the staff redundancies. During the liquidation the Employment Tribunal proceedings brought by the RMT Union and one former employee commenced, as they had previously been stayed as it was uncertain if there would be a return for unsecured creditors. Due to the complex employment issues we engaged the services of specialist employment solicitors.
Due to the number of former drivers employed by the company, a protective award could have a significant impact on the Redundancy Payments Office (RPO) as claims would be submitted to them in respect of any award made. We contacted the RPO to establish if they wanted to take an active involvement in the case and they replied that they could not do so as the consultation process was a matter between the company and its employees. Upon the recommendation of our solicitors we defended the claim to reduce its financial impact on the RPO and the company. Although the solicitors for the claimants were willing to consider a settlement offer, this could only be agreed with the consent of the RPO who were unable to get involved with the process.
The case was therefore listed for hearing by the Employment Tribunal. At the hearing, the Tribunal made a judgment that all drivers and the one non driver be awarded a protective award of 60 days. Following the judgment, we wrote to all the former employees who are party to the judgment outlining how they could submit their claim to the RPO. It is likely to take a number of months for all claims to be processed.
Once the claims have been processed we will be able to obtain details of the claims paid to the employees by the RPO and to obtain its claim in the winding up. When we have this information, we will need to calculate whether the employees have any residual preferential and unsecured claims in the liquidation. After this process has been finalised, we will know what residual funds will be available to pay a dividend to unsecured creditors. We can then commence the process of agreeing the unsecured claims and take steps to conclude the winding up and up pay a first and final dividend to the unsecured creditors.
Creditors are able to find further information in our annual progress report here