Connaught Administrators Find £100m Debt
Joint Administrators of collapsed property services firm Connaught have revealed they’ve found around 50,000 missing, unpaid invoices in the company, meaning their debts have suddenly soared.
Brian Green and David Costley-Wood, partners at KPMG and administrators of Connaught, said in their first creditor’s report when they were first appointed they found 500,000 unpaid bills for suppliers ranging to Dairy Crest milk, public speaking trainers to RBS bank loans.
However KPMG also revealed that as they worked on the report the administrators uncovered thousands of suppliers invoices that had not been processed and now believe debts could rise to as much as £100m.
Brian Green, restructuring partner at KPMG and joint administrator, said, “Our appointment to Connaught plc and Connaught Partnerships called for the mobilisation of a large team to unpick a huge volume of contracts and ascertain the position of a diverse range of stakeholders; to illustrate, there were over 50,000 outstanding invoices when we were appointed; there are hundreds of creditors (ranging from IT suppliers to a rugby club), not to mention 4,400 staff with varying employment contracts, scattered across the country.”
Costley-Wood said, “Relative to its size, it's one of the worst payroll records I've seen in 20 years."
The administrators said that secured creditors on the Partnerships division are owed £215m; preferential creditors on Partnerships are owed £1.78m; and unsecured creditors on Partnerships are owed £75m, of which £21.6m is owed to HM Revenue and Customs.
KPMG has also drafted in a team of lawyers to untangle the ownership of the collapsed firm’s property assets. The property – a mixed retail and storage building in London is valued at an estimated £1m.
To date, only £600,000 in cash has been made available for the thousands of unsecured creditors who are owed £87m – meaning they are likely to recover less than one penny in the pound.
Posted at 04:20PM Nov 09, 2010 by Marc Stenton in Insolvency | Comments[0]
