Administrator s progress report Form 2.24B

Transcription

1 Rule 2.47 The Insolvency Act 1986 Administrator s progress report Form 2.24B Name of Company Crestel Partnerships Limited Company number In the High Court of Justice, Chancery Division, Companies Court (full name of court) Court case number 4424 of 2015 (a) Insert full name(s) and address(es) of administrators We (a) Benjamin John Wiles and Geoffrey Wayne Bouchier of Duff & Phelps Ltd., The Shard, 32 London Bridge Street, London, SE1 9SG Administrator(s) of the above company attach a progress report for the period from to (b) Insert dates (b) 6 January 2016 (b) 27 May 2016 Signed Joint Administrator Dated

2 Progress Report to Creditors Crestel Partnerships Limited (In Administration) for the period from 6 January 2016 to 27 May 2016 pursuant to Rule 2.47(1) of the Insolvency Rules 1986 (as amended) Duff & Phelps Ltd. The Shard 32 London Bridge Street London SE1 9SG

3 Definitions Word or Phrase the Act the Agents the Appointment Date the Bank BIS Category 1 Disbursements Category 2 Disbursements the Company Construction Contract the Court Crestel Projects the Directors Duff & Phelps the Employers Definition The Insolvency Act 1986 (as amended) SIA Group (UK) London Limited, 107 Cheapside London, EC2V 6DN 6 July 2015, being the date of appointment of the Joint Administrators National Westminster Bank plc, with whom the Company banked and the holder of fixed and floating charges over the Company s assets The Department of Business, Innovation and Skills The Joint Administrators external and incidental costs and expenses in dealing with the Administration The Joint Administrators internal costs and expenses in dealing with the Administration Crestel Partnerships Limited (In Administration) (Company Number: ) Construction contracts entered into between the Employers and the Company for the development of the Sites, the majority of which are in the JCT Design and Build Contract 2011 form High Court of Justice, Chancery Division, Companies Court, London Crestel Projects Ltd, Croft Chambers, 11 Bancroft, Hitchin, Hertfordshire SG5 1JQ (Company Number: ) Howard Lavers, Laurence Haldron, James Haldron, Paul Richards and Shenaz Virji, the directors of the Company at the Appointment Date Duff & Phelps Ltd., The Shard, 32 London Bridge Street, London SE1 9SG The housing alliances, local authorities or owners/managers of the Sites, as defined in the Construction Contracts, where the Company was the contractor EC Regulation EC Regulation on Insolvency Proceedings 2000 HMRC the Head Office HM Revenue and Customs 1 Singer Way, Woburn Road Industrial Estate, Kempston, Bedford MK42 7AW

4 Word or Phrase the Joint Administrators The Mitcham Partnership Prescribed Part the Previous Reports the Proposals RPS the Rules Definition Benjamin John Wiles and Geoffrey Wayne Bouchier of Duff & Phelps The Mitcham Partnership Limited, Fitzroy Square, London W1T 6LQ (Company Number: ) Pursuant to Section 176A of the Act, where a floating charge is created after 15 September 2003, a designated amount of a company s net property (floating charge assets less costs of realisation) shall be made available to non-preferential unsecured creditors The Joint Administrators Report to Creditors and Statement of Proposals dated 27 August 2015 and the Joint Administrators Progress Report to Creditors dated 2 February 2016 The Joint Administrators Report to Creditors and Statement of Proposals dated 27 August 2015 Redundancy Payments Service The Insolvency Rules 1986 (as amended) the Reporting Period 6 January 2016 to 27 May 2016 the Secured Creditor the Sites SOA the Bank 16 areas of land located across London and the Home Counties that are owned/managed by the Employers. These properties were being developed by the Company and had not achieved practical completion Statement of Affairs, documentation supplied by the Directors outlining the Company s financial position as at the Appointment Date

5 Contents 1. Introduction 2. Joint Administrators Report and Statement of Proposals 3. Progress of the Administration 4. Investigations 5. Dividend Prospects / Prescribed Part 6. Joint Administrators Receipts and Payments Accounts 7. Pre-Administration Costs 8. Joint Administrators Costs and Expenses 9. Extension of the Administration and Conclusion 10. Next Report Appendices 1. Statutory Information 2. Joint Administrators Receipts and Payments Accounts 3. Analysis of Time Charged and Expenses Incurred 4. Proof of Debt Form

6 1. Introduction 1.1 The Joint Administrators were appointed on the Appointment Date by the Directors pursuant to Paragraph 22 of Schedule B1 to the Act. 1.2 The Court Reference is: No of In accordance with Paragraph 100(2) of Schedule B1 to the Act, the functions of the Joint Administrators may be exercised by either of the Joint Administrators. 1.4 The purpose of this report is to accompany the Joint Administrators request to extend the duration of the Administration by 30 months from 6 July 2016 to 5 January 2019, by providing creditors with details of the progress of the Administration for the Reporting Period, in accordance with Rule 2.47(1) of the Rules. 1.5 This report should be read in conjunction with the Previous Reports. 1.6 Statutory information on the Company is attached at Appendix Joint Administrators Report and Statement of Proposals 2.1 In accordance with Paragraph 52(1) of Schedule B1 to the Act, a creditors meeting was not required to be held as there will be insufficient realisations to enable a distribution to nonpreferential creditors other than via the Prescribed Part. No meeting was convened and, in accordance with Rule 2.33(5) of the Rules, the Proposals were deemed to have been approved by creditors on 10 September As advised in the Proposals, the Joint Administrators must perform their functions with the purpose of achieving one of the following objectives: Rescuing the Company as a going concern; or Achieving a better result for the Company s creditors as a whole than would be likely if the Company were wound up (without first being in Administration); or Realising property in order to make a distribution to one or more secured or preferential creditors. 2.3 In accordance with Paragraph 49(2) of Schedule B1 to the Act, the Joint Administrators note the following: The first objective has not been achieved due to a lack of available working capital and delays under the Construction Contracts as at the Appointment Date. Further, the Construction Contracts for each of the Sites were terminated by the respective Employers at the Appointment Date and, therefore, all operations of the business ceased at the Appointment Date. The second objective may be achievable as there may be sufficient realisations to enable for a distribution to non-preferential unsecured creditors under the Prescribed Part. Placing the Company into Administration has resulted in the termination of the Construction Contracts sooner than if the Company had been wound up without first being in Administration. The termination of contracts will have reduced the losses/costs incurred by the Employers that may be offset against the monies due to the Company on

7 completion of the Sites. This would, therefore, provide a better result for the Company's creditors as a whole than would be achieved if the Company had been wound up. The third objective will be achieved as the Joint Administrators believe that a dividend will be paid to the preferential creditors and secured creditor. However, the quantum and timing of any distributions remain uncertain. 3. Progress of the Administration 3.1 The manner in which the affairs and business of the Company have been managed in the Reporting Period by the Joint Administrators, and will continue to be managed and financed, are set out below: Construction Contracts Active Properties 3.2 As reported previously, the Company had 17 active contracts across the Sites as at the Appointment Date, all of which were at various stages of development but had not yet achieved practical completion. 3.3 The Joint Administrators have been liaising with each of the respective Employers regarding the status of the Sites and whether they have met practical completion. We are advised that certain sites have now met practical completion and are in the defects period. As noted previously, no monies will be due to the Company until such time as the defects periods have expired and final accounts of the costs have been drawn up by the Employer. We expect all final accounts to be drawn up by February 2018, taking into account those sites that are not yet complete. 3.4 No funds have been realised from this source to date and future realisations are currently uncertain. 3.5 In addition to the amounts due under the Construction Contracts, the Joint Administrators are currently pursuing the recovery of pre-payments made for various utilities supplies prior to the Appointment Date. 46,171 has been realised in the Reporting Period in this regard, bringing total realisations to date of 78,848. Future realisations from this source are currently uncertain. 3.6 A further update will be provided in the Joint Administrators next progress report in respect of the Construction Contracts and utilities prepayments. Completed Properties 3.7 In addition to the Sites, there are number of retentions that are withheld by Employers following practical completion of certain other developments prior to the Appointment Date. The Joint Administrators are liaising with the respective owners / managers of the sites regarding these retentions and have instructed solicitors to pursue a recovery of the debts, where applicable. Realisations from this source remain uncertain. 3.8 A further update will be provided in the Joint Administrators next progress report.

8 Crestel Projects 3.9 As noted in the Previous Reports, the Company also undertook a number of smaller development projects or minor works under the Crestel Projects arm of the Company s business In respect of the initial known ledger of 218,879 (previously reported at 187,234), 33,251 has been received in the Reporting Period, bringing total realisations in respect of this ledger to 188,580. This includes 87,404 paid into the Company s Pre-Appointment bank account In respect of the additional work that was undertaken by the Company prior to the Administration, but not invoiced, the Joint Administrators agreed a settlement with Crestel Projects of 155,221 in respect of this outstanding ledger of 237,231 in light of the works undertaken by Crestel Projects to complete the projects, which has subsequently increased the recoverability of both ledgers. 32,500 has been received in the Reporting Period. A further 30,000 is due from Crestel Projects under the settlement agreement, payable in monthly instalments of 5,000, with the final balance of 10,884 offset from the collection arrangement in place with Crestel Projects, whereby they are remunerated 20% of debtor receipts where their assistance is required to realise the debt In addition to the above ledgers, 8,704 was received in respect of final invoices for additional outstanding WIP as at the Appointment Date and 5,664 was received in the Reporting Period in relation to retentions now due on the projects. Inter-Company Loan 3.13 The Company s books and records and the SOA reflect an inter-company loan due to the Company from The Mitcham Partnership, which the Directors have noted in the SOA will not be recoverable Upon review of the Company s records and audited accounts, the Joint Administrators have identified an outstanding amount of 976,674 due from The Mitcham Partnership. The Joint Administrators are currently liaising with the directors of The Mitcham Partnership regarding a recovery of the same. A further update will be provided within the Joint Administrators next progress report. 4. Investigations 4.1 The Joint Administrators investigations into the Company s affairs are currently ongoing. The Joint Administrators cannot, at this stage, detail the nature of these investigations as it may hamper any further action that may be required. However, should any of the Company s creditors have information concerning the Company s affairs that they would like to bring to the Joint Administrators attention, please contact this office. 4.2 The Joint Administrators have complied with their statutory obligation to file a report with BIS concerning the conduct of all directors of the Company that served in the three years prior to the Joint Administrators appointment, the content of which is confidential.

9 5. Dividend Prospects / Prescribed Part Secured Creditor 5.1 In consideration for the monies advanced under the Company s overdraft facility, the Company granted the Bank a debenture dated 3 May 2006 which confers fixed and floating charges over all of the assets of the Company. 5.2 As at the Appointment Date, the Company's indebtedness to the Bank was approximately 451,693, subject to accruing interest, charges and costs. 5.3 It is currently uncertain whether there will be sufficient realisations to repay the Bank in full. Preferential Creditors 5.4 Pursuant to the Company s books and records, the estimated preferential claims are 44, The preferential creditors claims consist of employee claims for arrears of pay and holiday pay, the majority of which are likely to be subrogated to the BIS following payment to the employees by the RPS. 5.6 The RPS have submitted a preferential claim totalling 27,077 in respect of payments made to the Company s former employees. 5.7 Based on current information, it is anticipated that there will be sufficient realisations to pay the preferential creditors in full. The timing of any distribution, however, remains uncertain. Prescribed Part 5.8 The Joint Administrators are of the opinion, based on the current information, that there may be sufficient asset realisations to enable a dividend to be paid to the non-preferential unsecured creditors of the Company via the Prescribed Part. However, the quantum of any distribution is uncertain and will depend on the final realisations from amounts due to the Company under the Construction Contracts and the retentions for completed sites. Non-Preferential Unsecured Creditors 5.9 According to the Directors SOA, non-preferential unsecured creditors total 5,411,282. The non-preferential unsecured creditors can be summarised as follows: Creditor Claim Trade, Expense and Other Creditors 5,264,884 HM Revenue & Customs 146,398 Total 5,411, Based upon current information, it is anticipated that there will be insufficient realisations to enable a distribution to the non-preferential unsecured creditors of the Company, other than via the Prescribed Part, if any.

10 5.11 If not already done so, creditors of the Company should complete the Proof of Debt Form at Appendix 4 and return the same to the Joint Administrators in order to register their nonpreferential unsecured claim in the Administration of the Company. 6. Joint Administrators Receipts and Payments Account 6.1 A detailed receipts and payments account for the Reporting Period is shown in Appendix As at the end of the Reporting Period there was a cash and cash equivalents balance of 200,117 which reflects a VAT payable position of Pre-Administration Costs 7.1 As previously reported, the Pre-Administration costs were approved on 10 September 2015 by secured and preferential creditors, to be paid out of the assets of the Company. 7.2 All external costs were paid in full, with the exception of the Joint Administrators Pre- Administration time costs and disbursements. 72,526 was paid in this regard and the remainder will be written-off. 8. Joint Administrators Costs and Expenses 8.1 The Joint Administrators remuneration was approved on the basis of time properly incurred by them and their staff in attending to matters following the deeming of the Joint Administrators Proposals on 10 September Upon approval of the Joint Administrators Proposals, the Joint Administrators were authorised to draw Category 2 Disbursements. 8.2 The time costs incurred by the Joint Administrators prior to the start of the current period are 310,599, as previously reported. The total time costs incurred by Joint Administrators for the Reporting Period are 61,864, representing 281 hours and an average charge out rate of 221. The time costs incurred in the period by Duff & Phelps are as analysed at Appendix 3. Time is charged in 6 minute units. 8.3 During the Reporting Period, no fees have been drawn by the Joint Administrators in respect of post-appointment time incurred. 8.4 The Joint Administrators Category 1 Disbursements incurred in the Reporting Period totalling 28 are also detailed at Appendix The Joint Administrators have incurred expenses in dealing with the Administration of the Company and these are detailed in Appendix Information regarding the fees and disbursements of Administrators, including details of the Duff & Phelps disbursements policy and hourly charge out rates for each grade of staff that may undertake work on this case, is in a document called A Creditors Guide to Administrators Fees. This can be viewed and downloaded from the Joint Administrators website at Should you require a copy, please contact this office.

11 8.7 In accordance with Rule 2.48A of the Rules, secured creditors and unsecured creditors (with the concurrence of at least 5% in value of total unsecured claims) may make a request in writing to the Joint Administrators for further information about the remuneration or expenses set out in this progress report. This should be done within 21 days receipt of this report, after which the Joint Administrators have 14 days to respond. 8.8 In addition to the above, any secured creditor, or any unsecured creditor (with the support of at least 10% in value of the unsecured creditors or the permission of the court), may apply to the court on the grounds that the remuneration or basis fixed for the Administrators remuneration or the expenses incurred by the Joint Administrators are considered to be excessive. In accordance with Rule of the Rules, this application must be made no later than eight weeks after receipt of the progress report, where the charging of the remuneration or the incurring of expenses in question occurs. 9. Extension of the Administration and Conclusion 9.1 The Joint Administrators Proposals Report advised that the Administration automatically comes to an end after one year, unless an extension is granted by the Court or with the creditors consent. The Administration is therefore currently due to come to an automatic end on 5 July Due to the anticipated timing of the Customer Contracts meeting practical completion and the defects periods coming to an end, an application will be made to Court requesting an extension for a period greater than 12 months. 9.3 It is not deemed beneficial to extend the Administration by creditors, as a 12 month extension will not provide sufficient time for the works at the Sites to meet practical completion and defects periods to lapse. 9.4 The Joint Administrators request that the duration of the Administration is extended for a period of thirty months, from 6 July 2016 to 5 January The extension will allow time for all of the Sites to meet practical completion and the respective defects periods to lapse in order that the final accounts for each site can be drawn up and the amounts due to / from the Company agreed. 9.6 If the Company has no property with which to make a distribution to its non-preferential unsecured creditors, other than via the Prescribed Part, it is anticipated that following distributions to the secured and preferential creditors, If applicable, a notice of move from Administration to Dissolution Form 2.35B will be submitted to the Registrar of Companies pursuant to Paragraph 84 of Schedule B1 to the Act. 9.7 Following registration of From 2.35B by the Registrar of Companies, the Joint Administrators appointment will cease to have effect and they will be discharged from liability under Paragraph 98(3) of Schedule B1 to the Act. 9.8 At the end of three months beginning with the date of Form 2.35B being registered by the Registrar of Companies the Company will be dissolved. 9.9 Therefore, if consent to the extension is given, the revised date for the end of the Administration is 5 January 2019.

12 10. Next Report 10.1 The Joint Administrators are required to provide a progress report within one month of the end of the next six months of the Administration. This report will be provided no later than January If you have any queries or require any further assistance, please do not hesitate to contact my colleague, Joshua Woodage, of this office. Yours faithfully For and on behalf of Crestel Partnerships Limited Benjamin Wiles Joint Administrator The affairs, business and property of the Company are being managed by the Joint Administrators, Benjamin Wiles and Geoffrey Bouchier, who act as agents for the Company and without personal liability. Both are licensed by the Insolvency Practitioners Association and are bound by the Insolvency Code of Ethics.

13 Appendix 1 Statutory Information

14 Statutory Information Date of Incorporation 19 March 1998 Registered Number Court Reference in relation to Appointment: Company Directors High Court of Justice, Chancery Division, Companies Court, London, No of 2015 Mr Howard Lavers, Linden House, 40 High Street, Roxton, Bedfordshire, MK44 3EB Mr Laurence Haldron, Hollow Tree Farm, 210 Hitchin Road, Arlesey, Bedfordshire, SG15 6SE Mr James Haldron, 17 St. James Close, Pulloxhill, Bedford, MK45 5HF Ms Shenaz Virji, 1 Home Park Cottages, Station Road, Kings Langley, Hertfordshire, WD4 8LD Mr Paul Richards, 3 Garfield, Langford, Bedforshire, G18 9NG Company Secretary Shareholder N/A Mr Howard Lavers 50 Ordinary 1 Shares Mr Laurence Frederick Charles Haldron 50 Ordinary 1 Shares Mr Paul David Richards 5 Ordinary 1 Shares Ms Shenaz Virji 5 Ordinary 1 Shares Trading Addresses Registered Office 1 Singer Way, Woburn Road Industrial Estate, Kempston, Bedford MK42 7AW Current: c/o Duff & Phelps Ltd. The Shard 32 London Bridge Street London SE1 9SG Former: Croft Chambers 11 Bancroft Hitchin Hertfordshire SG5 1JQ Any Other Trading Names Crestel Partnerships Crestel Projects Crestel Construction

15 Appendix 2 Joint Administrators Receipts and Payments Accounts

16 Joint Administrators' Receipts and Payments Account Crestel Partnerships Limited (In Administration) 2016 For the Reporting Period 6 January 2016 to 27 May For the Period 6 July 2015 to 27 May 2016 Statement of Affairs Estimated to Realise Value Asset Realisations 2, Furniture and Equipment - 2, , Debtors - Crestel Projects* 33, , Unallocated Receipts - 2, Unallocated Debtors Additional Invoice Debtors 5, , Prepayment Refunds 46, , Football Memberships - 1, Realisations from Associated Companies - Crestel Projects 32, , Retention Receipts 8, , Sundry Refunds , Site Plant Bank Interest Gross , , , Cost of Realisations Pre Appointment Agents Fees - (4,988.00) IT Backup - (2,063.25) Pre Appointment Disbursements - (532.94) Pre Appointment Remuneration - (71,993.25) Pre Appointment Legal Fees - (4,967.00) Joint Administrators' Remuneration - (18,006.75) Joint Administrators' Disbursements - (1,347.23) Agents / Valuers Fees - (2,928.00) Agents / Valuers Disbursements - (185.40) Legal Fees (1,400.00) (3,933.00) Legal Disbursements - (174.20) Storage Costs (1,430.00) (4,318.01) Insurance of Assets - (920.00) Bank Charges (10.95) (42.13) Stationary and Postage (651.90) (2,507.52) Statutory Advertising - (84.60) (3,492.85) (118,991.28) Balance of the Estate 123, , Made up as Follows Main Current Account 200, VAT Receivable VAT Payable (1,157.13) 200, Notes: *The Receipts and Payments Account does not reflect the Crestel Projects debtor recoveries received into the Company's pre- Appointment bank account in the sum of 92, These funds are currently being held by the Bank.

17 Appendix 3 Analysis of Time Charged and Expenses Incurred

18 Analysis of the Joint Administrators' time costs for the Reporting Period Classification of Work Function Hours Total Time Partner Manager Senior Assistant Support Hours Cost ( ) Avg Hourly Rate ( ) Administration and Planning Case review & Case Diary Management , Cashiering & Accounting , Dealings with Directors & Management IPS Set up & Maintenance Insurance Statutory Matters (Meetings & Reports & Notices) , Strategy Planning & Control , Tax Compliance/Planning Creditors Communications with Creditors/Employees , Non Pref Creditors/Employee Claims Handling Pref Claims Adjudication & Distribution , Retention of Title & Claims Handling Secured Creditors , Investigations CDDA & Reports & Communication Financial Review & Investigations (S238/239 etc) , Realisation of Assets Book Debts , Other Intangible Assets , Other Tangible Assets Pre-Appointment Tax Reclaims Total Hours: Total Fees Claimed ( ): , , , , , Category of Disbursement Category 1 Disbursements: Storage Total Category 2 Disbursements: There are no Category 2 Disbursements

19 Analysis of the Joint Administrators' time costs for the Cumulative Period Classification of Work Function Hours Total Time Partner Manager Senior Assistant Support Hours Cost ( ) Avg Hourly Rate ( ) Administration and Planning Case Review and Case Diary Management , Cashiering & Accounting , Dealings with Directors and Management , IPS Set up & Maintenance , Insurance , Statement of Affairs , Statutory Matters (Meetings & Reports & Notices) , Strategy Planning & Control , Tax Compliance/Planning , Creditors Communications with Creditors/Employees , Non Pref Creditor Claims Adjudication & Distributions Non Pref Creditors/Employee Claims Handling , Pref Claims Adjudication and Distribution , Retention of Title & Claims Handling , Secured Creditors , Investigations CDDA & reports & Communication , Financial Review and Investigations (S238/239 etc) , Realisation of Assets Book Debts , Freehold and Leasehold Property , Hire Purchase and Lease Assets , Other Intangible Assets , Other Tangible Assets , Plant & Machinery & Fixtures & Motor Vehicles , Pre-Appointment Tax Reclaims Sale of Business Total Hours: , Total Fees Claimed ( ): 2, , , , , , Category of Disbursement Category 1 Disbursements: Travel Willis Limited Storage Food and Drink Courier Total Category 2 Disbursements: There are no Category 2 Disbursements

20 Analysis of the Joint Administrators' costs and expenses for Reporting Period and the Cumulative Period Company / Organisation Book Value Detail Fee Basis Amount Incurred in Amount Paid in the the Reporting Period Reporting Period ( ) ( ) excl. VAT excl. VAT Amount Incurred in the Cumulative Period ( ) excl. VAT Amount Paid in the Cumulative Period ( ) excl. VAT Accurate Mailing Services Limited Ardenta Consulting Limited Stationary & Postage IT Backup Stationary and postage agent. Costs incurred through postage and sending of communications to creditors. Provision of backups in relation to the Company's information systems. AUA Insolvency Risk Services Insurance of Assets Advice regarding insurance requirements. Courts Advertising Pinsent Masons SIA Group Statutory Advertising Legal Fees Agent arranging the placement of certain notices in the London Gazette. Solicitors instructed to assist and provide ad hoc legal advice where required. Agents / Valuers Fees and Asset Advisory. Instructed to value furniture Disbursements Security and fittings, and provision of security Costs arrangements. Unit cost , , Unit cost Nil Nil 2, , Time cost basis Nil Nil Unit cost Nil Nil Time cost basis Time cost basis 3, , , , Nil Nil 3, , Document storage agent. Costs incurred Total Data Management Limited Storage Costs through storage of the Company's books and Unit cost 1, , , , records. Total 5, , , , The Joint Administrators' choice of agent was based on their perception of the ability and experience to perform this type of work, the complexity and nature of the assignment and the basis of the Joint Administrators fee arrangement with them.

21 Progress Report to Creditors Appendix 4 Proof of Debt Form

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