TO ALL KNOWN CREDITORS 25 May 2012

Transcription

1 Ernst & Young LLP 1 More London Place London SE1 2AF Ben Stanyon Tel: Fax: bstanyon@uk.ey.com TO ALL KNOWN CREDITORS 25 May 2012 Ref: AH/AB/TL/BS/RT Direct line: Rebecca Turner Rturner2@uk.ey.com Dear Sirs Luminar Dancing (2006) Limited Registered Number , High Court Reference 9328 of 2011 Luminar Finance Limited Registered Number , High Court Reference 9329 of 2011 Luminar Gems Limited Registered Number , High Court Reference 9330 of 2011 Luminar Group Holdings plc Registered Number , High Court Reference 9339 of 2011 Luminar Holdings Limited Registered Number , High Court Reference 9331 of 2011 Luminar IP (II) Limited Registered Number , High Court Reference 9366 of 2011 Luminar Lava Ignite Limited Registered Number , High Court Reference 9334 of 2011 Luminar Leisure Limited Registered Number , High Court Reference 9333 of 2011 Luminar Liquid Limited Registered Number , High Court Reference 9326 of 2011 Luminar Oceana Limited Registered Number , High Court Reference 9325 of 2011 (All in Administration) (together the Group ) Registered office address: C/O Ernst & Young LLP, 1 More London Place, London, SE1 2AF I write, in accordance with Rule 2.47 of the Insolvency Rules 1986, to provide creditors with a report on the progress of the Administrations. This report covers the period from 13 December 2011 to 27 April 2012 and should be read in conjunction with the Joint Administrators previous report dated 12 December On 27 October 2011 Luminar Group Holdings plc ( Plc ) entered administration and on 28 October 2011 Luminar Finance Limited ( Finance ), Luminar Holdings Limited ( Holdings ), Luminar IP (II) Limited ( IP 2 ), Luminar Leisure Limited ( Leisure ), Luminar Dancing (2006) Limited ( Dancing ), Luminar Liquid Limited ( Liquid ), Luminar Gems Limited ( Gems ), Luminar Oceana Limited ( Oceana ) and Luminar Lava Ignite Limited ( Lava Ignite ) entered administration. A Hudson, A Bloom and T Lukic of Ernst &

2 2 Young LLP were appointed to act as Administrators. The appointment was made by the Directors under the provisions of paragraph 22(2) of Schedule B1 to the Insolvency Act Under the terms of the appointment, any act required or authorised to be done by the Joint Administrators can be done by any of them. Reminder of background Prior to the appointments, the Group was the largest nightclub operator in the United Kingdom. The Group employed c. 3,056 people nationally, predominately on a part time basis. The Group s operating portfolio at the dates of appointment comprised 70 trading nightclubs together with 9 non-trading sites. The key operational companies in the Group, all of which are now in administration, are detailed below: Primary trading entities Luminar Gems Limited Trading company, operated 21 independent unbranded nightclubs nationally. Luminar Liquid Limited Trading entity, operated the Liquid and Envy brands from 27 nightclubs nationally. Luminar Oceana Ltd Trading entity, operated the Oceana brand from 13 nightclubs nationally, including two on a licence arrangement. Luminar Lava Ignite Ltd Trading entity, operated the Lava and Ignite brands, with nine nightclubs nationally. Other entities Luminar Dancing (2006) Limited & Luminar Holdings Limited Trading sub-group holding entities. Luminar Finance Limited Borrowing entity within the Group. Luminar Group Holdings Plc Listed entity and ultimate holding company in the Group. Luminar IP (II) Limited Intellectual property and brand owning entity. Luminar Leisure Limited Purchasing, contracting and principle employing entity in the Group. The Group had a complicated structure, consisting of an additional 59 companies outside of the Administration process. For further information, a simplified structure chart of the Group can be found at Appendix 1. A review of these entities led to two additional Administration appointments being made on 8 February 2012 in relation to Luminar Dancing Finance (Registered Number ) and Liquid Nightclub Limited (Registered Number ). These are discussed in further detail on page 9 of this report.

3 3 Summary of Progress Administrators Trading Immediately following the appointments a review of the Group s trading performance was undertaken. As a result of this review, 11 clubs were closed on 1 November 2011, followed by one further club on 8 November The remainder of the club portfolio was traded until a going concern sale of the business and assets was achieved on 9 December To date, the Joint Administrators have generated a profit of c. 486,000 for the trading period ended 9 December This is summarised in further detail below. Receipt/Payment Entity Gems Lava Ignite Leisure Liquid Oceana Total Rent & service charge income 10, ,803 2,613 (763) 115,611 Sale of stock 241, , , ,337 1,305,006 Trading revenue 2,393,688 1,298, ,600 3,437,729 4,419,442 11,789,706 Total receipts 2,645,708 1,464, ,402 3,817,540 4,939,016 13,210,322 Capital expenditure (43,299) (11,390) (48,352) (76,745) (315,703) (495,489) Employee costs (538,076) (294,685) (723,635) (672,046) (896,699) (3,125,141) Event & promotional costs (175,409) (183,424) - (279,421) (490,230) (1,128,484) Force majeure (127,348) (79,732) - (121,343) (148,329) (476,752) Insurance (75,933) (66,250) - (66,244) (66,275) (274,703) Retention of title (222,691) (163,011) - (351,967) (412,089) (1,149,758) Rent, rates & service charges (58,842) (1,857) (49,972) (140,217) (117,471) (368,360) Suppliers (1,056,636) (692,561) (218,963) (1,642,972) (2,094,257) (5,705,390) Total payments (2,298,234) (1,492,910) (1,040,922) (3,350,956) (4,541,054) (12,724,075) Profit/(loss) 347,474 (28,253) (697,520) 466, , ,247 Management recharge (204,745) 16, ,520 (274,929) (234,494) - Trading outcome 142,729 (11,605) - 191, , ,247 Trading receipts The Joint Administrators have realised c. 13.2m of receipts in relation to the trading period, c. 11.8m of which was generated from trading sales. c. 1.1m of debtor balances remain outstanding. The majority of balances relate to corporate sales invoices that were issued during the Administration trading period and are discussed further on page 7 of this report. As part of the sale of business and assets, the Joint Administrators sold the stock in the business at the time of the sale to the purchaser for c. 1.3m. All of this stock was purchased during the Administration trading period. In addition, the Joint Administrators have collected c. 116,000 in relation to rent, service charges and insurance from sub-tenants.

4 4 Capital expenditure The Joint Administrators continued to facilitate the refurbishment of Oceana Kingston during the trading period in order to meet the ongoing terms of the premises license, capitalise on pre-christmas trading and to help maximise the potential sale value for the freehold premises. In addition, capital expenditure projects were required to remedy any health and safety compliance issues across the portfolio Capital expenditure for the trading period totalled c. 495,000 and all Administrators purchase order commitments have been settled this regard. Employees At the dates of appointment, the Group employed 3,056 staff, with a significant number of these being part times roles. The one week of arrears for the weekly paid employees were settled by the Joint Administrators in order to preserve staff goodwill and support. 301 redundancies were made following the closure of 12 clubs and a review of head office costs. In addition, 3 members of the board offered their resignations and these were accepted. The remaining employees who were retained during the Administration trading period were transferred to the Purchaser under the Transfer of Undertaking (Protection of Employment) Regulations 2006 ( TUPE ) as part of the sale transaction. Total employee related costs for the trading period (including employee expenses, pension and tax contributions) were c. 3.1m, of which c. 724,000 related to head office staff. All of these costs have been settled and we do not anticipate any further expenditure in this regard. Events & promotions During the trading period, the Joint Administrators continued to operate a number of promotional events that included the use of promoters, DJs, stand-up comedy events and celebrity appearances. Total expenditure was c. 1.1m, the costs of which have been settled. Force majeure and duress payments The Joint Administrators identified a number of critical suppliers whose co-operation and support was essential for the Group to continue to trade during the Administration. Key suppliers included nightclub security, beverage suppliers, food wholesalers and cleaning contractors. Where possible, existing pricing and credit terms were negotiated and agreed. In some instances an enhanced commercial settlement, also known as a duress payment, was reached to secure ongoing support. The Joint Administrators negotiated and settled c. 467,000 of such duress payments Insurance Insurance cover for the trading period was secured via JLT insurance brokers. Due to a large number of historic claims and a fatality at the Northampton club prior to the Administration appointments, the premium for the trading period was c. 250,000, which was considerably higher in proportion to the premium paid pre-appointment. In addition, we have made insurance payments to leasehold landlords for the period of c. 25,000. We continue to receive personal injury claims for the pre-appointment trading period, which JLT are managing on our behalf. These are all non-preferential claims and we are currently aware of 75 personal injury claims totalling c. 1.2m.

5 5 To date, 9 claims have been received and investigated which relate to the Administration trading period. The excess on the insurance policy is 15,000 per claim. Any successful claims (up to these amounts) will therefore rank as an Administration expense. Rent, rates and service charges The Joint Administrators have made payments of c. 368,000 in respect of rent and service charges for leasehold premises in the portfolio during the trading period. We do not expect any further payment in this regard. Stock and retention of title On appointment the Group held c. 1.5m of stock in the form of beverages, food and sundry consumables. The Joint Administrators made payments of c. 1.1m in settlement of a number of valid Retention of title claims against this stock, the majority of which was paid to the Groups main drinks supplier, Matthew Clark Limited. Any ongoing retention of title claims are now being dealt with by the Purchaser. As part of the sale of business and assets, the Joint Administrators sold the stock in the business at the time of the sale to the purchaser for c. 1.3m Suppliers Payments to suppliers of the Group during the trading period total c. 5.7m. This expenditure included cleaners, food and consumables suppliers, security, cash collection agencies and utility providers. With the exception of the utility providers, we do not anticipate any further material payments in this regard. Management recharge Leisure was the principle purchasing, contracting and employing entity in the Group. It was therefore operated as a cost centre and encompassed the head office functions of finance, HR, IT, marketing and sales. In accordance with the Groups historic accounting policy, these costs have been recharged to the various trading entities in the Group that utilised the goods and services during the Administration trading period.

6 6 Sale of business and assets A sale of the business and assets was successfully completed on Friday 9 December 2011 to Ranimul 2 Limited ( the Purchaser ) for a total consideration of up to 33.9m. As detailed below, c. 15.9m was paid on completion with the balance being due on both a deferred and contingent basis. Sale of business and assets consideration summary Consideration Upfront Deferred Contingent Total Cash floats 488, ,592 Contracts 1 1 Goodwill 1 1 Fixtures, fittings & equipment 1,581,000 1,581,000 Intellectual property 1 1 Motor vehicles 4,997 4,997 Plant & machinery 1 1 Properties 12,550,000 14,200,000 3,700,025 30,450,025 Stock 1,305,006 1,305,006 Total Consideration 15,929,599 14,200,000 3,700,025 33,829,624 Collected to Date (15,929,599) (1,291,215) (17,220,814) Remaining consideration 0 12,908,785 3,700,025 16,608,810 To date, a further c. 1.3m of deferred consideration has been collected. A summary of the total realisations to date of c. 17.2m on an entity by entity basis is set out below. Consideration received as at 28 April 2012 Consideration Entity Gems Lava Ignite Leisure Liquid Oceana Total Cash floats 95,076 57, , , ,592 Contracts 1 1 Goodwill 1 1 Fixtures, fittings & equipment 344,079 34, , ,837 1,581,000 Intellectual property 1 1 Motor vehicles 4,997 4,997 Plant & machinery 1 1 Properties - Upfront 2,378, ,475 5,022,356 4,976,471 12,550,000 Properties - Deferred 426, , ,255 1,291,215 Stock 241, , , ,337 1,305,006 Total 3,485, ,157 5,002 6,647,287 6,651,600 17,220,814 Deferred consideration It was agreed that c. 14.2m of the sale consideration was to be paid on a deferred basis, with 2.2m being payable in monthly instalments of c. 240,000 per month, ending in September To date, c. 1.3m has been collected in this regard. The balance of 12m is payable in two equal instalments of 6m on 30 June and 30 December As the second instalment is due after the current scheduled expiry of the Administrations, we have sought permission from the secured creditors of the relevant entities for an extension of the Administrations for a period of six months. We will update creditors in due course as to the outcome of this application.

7 7 All deferred consideration is subject to interest charges, which are floating charge assets in the Administrations. To date c. 145,000 has been realised in this regard. A summary of the key milestones in relation to the realisation of the deferred and contingent consideration is included at Appendix 6. Contingent consideration A further c. 3.7m of the sale consideration is contingent on the successful assignment of 46 leasehold premises to the Purchaser We are in regular dialogue with the purchaser and understand that they are making good progress in their negotiations with the relevant Landlords At the time of writing this report, three assignments have been agreed, signed and are close to completion. This will crystallise c. 350k of the contingent consideration for the benefit of the creditors. The Purchaser has exited 5 of the properties where they were unable to obtain an assignment (Birmingham, Wolverhampton, Milton Keynes, Norwich and Maidstone). The exited sites have reduced the potential contingent consideration by c. 274,000, although this has been partially offset by the sale of tenant Fixtures and Fittings at the Milton Keynes site to the purchaser. As well as these unsuccessful assignments, a further four assignments are doubtful. These four sites account for c 200,000 of deferred consideration, and we therefore currently anticipate potential additional realisations of up to c. 3.2m in respect of the contingent consideration. Other Realisations The Joint Administrators have collected c. 3.3m of other realisations, as detailed below. Realisation Entity Finance Gems Lava Ignite Leisure Liquid Oceana Plc Total Book debts 66,982 (85) 2, ,233 1,298 60, ,224 Cash in transit & exchange coinage 337, , , ,318 1,332,776 Motor Vehicles 8,400 8,400 Prepayments 324, ,053 Rates refunds 21,343 32, , , ,944 Share scheme refunds 103, ,230 Sundry income ,242 28,442 Total 66, , , , , , ,230 3,318,069 Debtors To date, the Joint Administrators have collected c. 652,000 in respect of debtors. After deductions for known bad debts, outstanding debtors for the Group total c. 1.1m. These debtors relate to both pre-appointment book debts and invoices that were raised during the Administration trading period. The majority of the outstanding balances are subject to contractual disputes with promotion companies or sub-tenants. We are working with our lawyers to pursue these debts and will update creditors further in future reports.

8 8 Cash in transit and exchange coinage The Joint Administrators have collected c. 1.3m of cash and coinage that was in transit at the time of the appointments. We do not estimate any further realisations in this regard. Motor Vehicles Prior to the sale of the business and assets, the Joint Administrators realised 8,400 in respect of motor vehicles. The remaining company vehicle was sold to the Purchaser for 4,997 as part of the sale transaction. Prepayments Prepayments of c. 324,000 that primarily relate to music and video license fees have been refunded. We do not estimate any further realisations in this regard. Rating revaluations & prepayments The Joint Administrators engaged a specialist agent to undertake rating reviews of the Group s property portfolio in an attempt to recover overpaid business rates. The appointed agent works on a success fee basis of 15% of funds recovered. The process undertaken involves a review of the rateable values attributed to properties by the local council s Valuation Officer and lodging of appeals against these valuations. The appeals can be made for changes in circumstances, such as a reduction in turnover, closure or changes to the area in general. If successful, substantial refunds can be achieved for the benefit of creditors. In addition, we have been working with agents to recover prepayments in relation to business rates. To date, we have collected c. 869,000 in rates refunds. Further realisations are expected in this regard, however, we are unable to estimate this figure at present.

9 9 Share scheme refunds The de-registration of the Group s shares on the stock exchange crystallised closing balances in respect of scheme trusts and unclaimed dividends, as detailed below. This has resulted in realisations of c. 103,000 for the benefit of creditors. Employee Benefit Trust Prior to the appointments, the Group ran a number of long-term incentive plans (LTIP) and save as you earn schemes (SAYE), where employees were given the option of buying shares in the Group. The de-listing of the shares crystallised the funds set-aside for the purpose of these schemes and, due to the nil value attributed to the shares, the schemes were deemed redundant. As a result, we have been able to realise c. 80,000 for the benefit of creditors in respect of Group funds set aside for unclaimed incentives. Unclaimed dividends Following a dialogue with the registrars of the Group, we identified c. 23,000 in relation to unclaimed dividends that were being held by the registrar. Other issues Taxation We are currently collating the information to prepare the tax returns for the Group Companies for the period of administration. Our draft computations indicate that there will be no corporate tax liability to arising on the disposal of the Group s properties. There may, however, be taxable income in respect of the trading activity during the administration period that we are unable to shelter from existing losses. We will update creditors further on this matter in our next report. Group subsidiaries At the dates of appointment there were a further 59 companies in the Luminar Group structure. We are continuing to work with the directors of these companies in order to rationalise the group. We have agreed a strategy to strike off or liquidate 50 of these companies, with the remaining nine companies requiring some further investigation. Two of these companies (Luminar Dancing Finance and Liquid Nightclub Limited) were identified as being likely to be entitled to receive material dividends from the Prescribed Part distribution. Therefore, on 8 February 2012 Joint Administration appointments were made by the Directors under the provisions of paragraph 22(2) of Schedule B1 to the Insolvency Act 1986.

10 10 Receipts and Payments Accounts We detail below a consolidated receipts and payments account for the Group from 27 October 2011 to 27 April A detailed breakdown of the Joint Administrators receipts and payments by entity for the period from 27 October 2011 to 27 April 2012 are attached at Appendix 2. These do not reflect estimated future realisations or costs. Luminar Group Holdings Plc (In Administration) Consolidated Abstract of Receipts and Payments to 27 April 2012 Floating Charge (Trading) Floating Charge (Other) Estimated to Realise per Statement of Affairs Fixed Charge Total RECEIPTS Bank interest 8, , , Book debts 652, , ,173,252 Cash floats 488, , Cash in transit 1,111, ,111, ,310 Contracts Deferred consideration interest 144, , Exchange coinage 221, , Fixtures, fittings & equipment 1,581, ,581, ,000 Freehold property 5,532, ,532, Goodwill ,575,000 Leasehold property 8,308, ,308, Licence prepayments 324, , Motor vehicles 13, , Plant & machinery Rates refunds 868, , Rent deposits 66, , Scheme refunds 103, , Stock 1,305, ,305, ,547,907 Sundry income 13, , Unallocated income 14, , VAT Payable (1,059,950.00) (1,059,950.00) Trading Receipts Rent and service charge income 115, , ,799,162 Trading sales 11,789, ,789, Total 13,850, ,210, ,568, ,629, ,116, PAYMENTS Joint Administrators fees 1,438, ,127, ,566, Joint Administrators fees (pre-appointment) 190, , , Agents fees 78, , Bank charges 1, , Irrecoverable VAT 138, , Legal fees 847, , ,039, NewCo apportionments 98, , Secured creditors 10,000, ,000, VAT Receivable 30, , , Trading Payments Bank charges 40, , Cleaning 474, , Consumables 128, , Employee expenses 41, , Employee salaries & wages 3,083, ,083, Event & promotional costs 1,128, ,128, Food & beverage supplies 3,029, ,029, Force majeure payments 476, , Health & safety 28, , Hire of equipment 154, , Insurance 274, , IT costs 106, , Licencing fees 25, , Petty cash control 136, , Rates 34, , Refurbishment costs 282, , Refuse collection costs 63, , Repairs & maintenance 184, , Rent and rates 333, , Retention of title payments 1,149, ,149, Security costs 915, , Subcontractors 47, , Sundry expenses 33, , Utilities 549, , Total 12,507, ,724, ,709, ,941, Cash at Bank 1,342, , ,859, ,688,224.15

11 11 Joint Administrators Remuneration and Expenses The Administrators remuneration was fixed on a time-cost basis by the secured creditors. During the period from 27 October 2011 to the 27 April 2012, the Administrators have incurred time costs of 3,682, Of this sum, 2,566, has been drawn with the approval of the secured creditors. Due to insufficient Fixed Charge realisations in respect of Dancing, Finance, Plc, Holdings and IP 2, with the permission of the secured creditors, our fees in relation to these companies have been drawn from other Group entities. These recharges will not affect distributions to floating charge creditors. Entity Charged to Date Drawn to Date Luminar Dancing (2006) Limited 13, , Luminar Finance Limited 18, , Luminar Gems Limited 901, , Luminar Group Holdings Plc 69, , Luminar Holdings Limited 15, , Luminar IP (II) Limited 11, , Luminar Lava Ignite Limited 754, , Luminar Leisure Limited 127, , Luminar Liquid Limited 930, , Luminar Oceana Limited 840, , Total 3,682, ,566, An analysis of the time spent is attached as Appendix 3 to this report. At Appendix 4 there is a statement of the Administrators policy in relation to charging time and disbursements. During the period from 27 October 2011 to the 27 April 2012, the Administrators have incurred expenses totalling 80, plus VAT. No funds have been drawn in this regard to date. An analysis of the expenses charged, in addition to an analysis of Category 2 disbursements by entity (ie, those disbursements paid to the Joint Administrators firm) is attached as Appendix 3. Entity Category 1 Category 2 Luminar Dancing (2006) Limited Luminar Finance Limited Luminar Gems Limited 16, Luminar Group Holdings Plc 3, Luminar Holdings Limited Luminar IP (II) Limited Luminar Lava Ignite Limited 11, , Luminar Leisure Limited 8, Luminar Liquid Limited 15, , Luminar Oceana Limited 19, Total 75, , In certain circumstances, creditors are entitled to request further information regarding the Administrators remuneration or expenses, or to apply to court on the grounds that the costs are considered to be excessive. (Rules 2.48A and of the Insolvency Rules 1986). Further information is provided in Appendix 5.

12 12 Pre-administration costs The Administrators proposals dated 12 December 2011 included a statement of pre-administration costs which were outstanding at the date on which the company entered administration. On 26 March 2012, payment of the unpaid costs, totalling 247, was approved by the secured creditors and drawn from the Administration estates. As with the Joint Administrators fees incurred since the appointments, due to insufficient Fixed Charge realisations in respect of Dancing, Finance, Plc, Holdings and IP 2, with the permission of the secured creditors, pre-appointment time costs in relation to these companies have been drawn from other Group entities. These recharges will not affect distributions to floating charge creditors. Entity Fees Incurred Luminar Dancing (2006) Limited 2, Luminar Finance Limited 2, Luminar Gems Limited 63, Luminar Group Holdings Plc 6, Luminar Holdings Limited 2, Luminar IP (II) Limited 2, Luminar Lava Ignite Limited 49, Luminar Leisure Limited 2, Luminar Liquid Limited 67, Luminar Oceana Limited 48, Total 247,336.50

13 13 Secured Creditors Lloyds Banking Group PLC is the security trustee for the syndicated loans. The Syndicated Lenders also include, Barclays Bank PLC and the Royal Bank of Scotland PLC. These borrowings were secured by fixed and floating charges over the assets of the Group together with cross guarantees. As at 27 October 2011 the Syndicated Lenders indebtedness was c m. It is still estimated that the secured creditors will experience a significant shortfall following distribution of the net fixed and floating charge realisations from the Administration. Preferential Creditors As sufficient floating charge realisations were generated to settle all anticipated preferential creditor claims in respect of arrears of wages and holiday pay, the Administrators have settled these claims directly. Preferential creditor claims will therefore be nil. Non-preferential Creditors Whilst claims continue to be submitted, the current levels of non-preferential creditor balances are set out below. Entity Trade Creditors (,000) Public Liability Insurance Claims (,000) TAX/VAT Creditor (,000) Inter-company creditor (,000) Total (,000) Luminar Dancing (2006) Ltd Luminar Finance Limited 143 2, , ,297 Luminar Gems Limited 1, ,377 98,713 Luminar Group Holding PLC 621 2, ,564 Luminar Lava & Ignite Limited ,915 18,306 20,401 Luminar Leisure Limited 7, ,882 36,917 65,350 Luminar Liquid Limited 3, ,644 24,452 31,621 Luminar Oceana Limited , ,793 Total 13,265 1,728 32, , ,766 With the exception of Holdings, Lava Ignite, Dancing and IP 2, the non preferential creditors will receive a dividend via the prescribed part. This is discussed in further detail below.

14 14 The Prescribed Part The Prescribed Part is a proportion of floating charge assets set aside for non-preferential creditors pursuant to Section 176A of the Insolvency Act The Prescribed Part applies to floating charges created on or after 15 September In a number of Group companies, the non-preferential creditors will be entitled to a dividend from the Prescribed Part funds. We have prepared a financial model to track the flow of the Prescribed Part distribution through the Group that arises as a result of the Intra group loans. The purpose of this exercise was to identify where Prescribed Part funds flow to other Companies in the Group that are not already in Administration. The intra-group balances have now been finalised with the Directors and total 2bn in non-preferential claims, the majority of which ( 1.8bn) vests with companies in Administration. As discussed above, as a direct result of the modelling process, we identified two additional companies in the Group with substantial intra-group creditor balances where there is potential to receive a material distribution via the Prescribed Part (Luminar Dancing Finance and Liquid Nightclub Limited). Following discussions with the Directors we were appointed as Joint Administrators of these companies on 8 February The Joint Administrators currently estimate, to the best of their knowledge and belief, that: The value of the net property of Dancing will be Nil and the value of the Prescribed Part will be Nil. The value of the net property of Finance will be 277,560 and the value of the Prescribed Part will be 58,512. The value of the net property of Gems will be 495,225 and the value of the Prescribed Part will be 102,045. The value of the net property of Plc will be 117,507 and the value of the Prescribed Part will be 26,501. The value of the net property of Holdings will be Nil and the value of the Prescribed Part will be Nil. The value of the net property of IP 2 will be Nil and the value of the Prescribed Part will be Nil. The value of the net property of Lava Ignite will be Nil and the value of the Prescribed Part will be Nil. The value of the net property of Leisure will be 1,046,870 and the value of the Prescribed Part will be 212,374. The value of the net property of Liquid will be 1,410,967 and the value of the Prescribed Part will be 285,193. The value of the net property of Oceana will be 1,441,666 and the value of the Prescribed Part will be 291,333. Distributions to Creditors As discussed above, we estimate distributions via the Prescribed Part to non-preferential creditors from all companies in the Group, with the exception of non preferential creditors of Holdings, Lava Ignite, Dancing and IP 2 due to insufficient realisations. There remain a number of issues to be resolved before we can provide a more accurate estimate of the Prescribed Part distributions and the potential impact on recoveries, which includes;

15 15 Realisation of the remaining floating charge assets, including debtors, rates refunds and deferred consideration interest. This will be at the beginning of 2013 at the earliest. Further verification of the level of intra-group liabilities, which are likely to reduce as part of the ongoing rationalisation process. Confirmation of the level of external creditors which will, in part, be dependent on the success in assigning the leases to the Purchaser. We will update creditors in this regard in our next report. I will report to you again in six months time. In the interim, should you have any queries, please do not hesitate to contact my colleague Rebecca Turner on the above details. Yours faithfully for the Group (in Administration) A Hudson Joint Administrator Enc: Joint Administrators Receipts and Payments Account Summary of Joint Administrators Time-Costs and Category 2 Disbursements Joint Administrators Policy on Fees and Disbursements A M Hudson is licensed in the United Kingdom to act as an insolvency practitioner by The Association of Chartered Certified Accountants. A R Bloom and T Lukic are licensed in the United Kingdom to act as insolvency practitioners by The Institute of Chartered Accountants in England and Wales. The affairs, business and property of Luminar Dancing (2006) Limited, Luminar Dancing Finance, Lumina Finance Limited, Luminar Gems Limited, Luminar Group Holdings Plc, Luminar Holdings Limited, Luminar IP (II) Limited, Luminar Lava Ignite Limited, Luminar Leisure Limited, Luminar Liquid Limited, Luminar Oceana Limited and Liquid Nightclub Limited ("the Companies") are being managed by the Joint Administrators, A M Hudson, A R Bloom and T Lukic who act as agents of the Companies only and without personal liability. We may collect, use, transfer, store or otherwise process (collectively, Process ) information that can be linked to specific individuals ( Personal Data ). We may Process Personal Data in various jurisdictions in accordance with applicable law and professional regulations including (without limitation) the Data Protection Act 1998.

16 Appendix 1 Luminar Group Structure Chart

17 Appendix 2 Luminar Dancing (2006) Limited (in Administration) Joint Administrators Abstract of Receipts and Payments from 28 October 2011 to 27 April 2012 There have been no receipts or payments in Dancing in the period to date. The statement of affairs prepared by management has estimated no realisations in respect of Dancing. Notes 1. Due to insufficient realisations in Dancing and with the permission of the Secured Creditors: - Fixed charge Administrators fees totalling 7, were drawn from Liquid. - Fixed charge pre-appointment Joint Administrators fees totalling 2,485.50, were drawn from Gems. Luminar Finance Limited (in Administration) Joint Administrators Abstract of Receipts and Payments from 28 October 2011 to 27 April 2012 Fixed Charge Floating Charge (Trading) Floating Charge (Other) Total Estimated to Realise per Statement of Affairs RECEIPTS Bank interest Book debts 66, , Total , , PAYMENTS Total Cash at Bank , , Notes 1. Receipts and payments are stated net of VAT. 2. Due to insufficient realisations in Finance and with the permission of the Secured Creditors: - Fixed charge Joint Administrators fees totalling 8, were drawn from Liquid. - Fixed charge pre-appointment Joint Administrators fees totalling 2,515.00, were drawn from Gems.

18 Luminar Gems Limited (in Administration) Joint Administrators Abstract of Receipts and Payments from 28 October 2011 to 27 April 2012 Fixed Charge Floating Charge (Trading) Floating Charge (Other) Total Estimated to Realise per Statement of Affairs RECEIPTS Book debts (85.00) (85.00) 846,923 Cash floats 95, , Cash in transit 279, , ,589 Deferred consideration interest 19, , Exchange coinage 58, , Fixtures, fittings & equipment 344, , Freehold property 726, , Leasehold property 2,078, ,078, ,425,000 Rates refunds 21, , Stock 241, , ,288 VAT payable (202,901.58) (202,901.58) Trading Receipts Rent and service charge income 10, , Trading sales 2,393, ,393, Total 2,805, ,645, , ,065, ,655,800 PAYMENTS Joint Administrators fees 347, , , Joint Administrators fees (pre-appointment) 65, , , Agents fees 4, , Intra-Group loan 100, , , Irrecoverable VAT 48, , Legal fees 163, , , Secured creditors 1,800, ,800, VAT Receivable 4, , , Trading Payments Bank charges 10, , Cleaning 82, , Consumables 21, , Employee expenses Employee salaries & wages 537, , Event & promotional costs 175, , Food & beverage supplies 595, , Force majeure payments 127, , Health & safety costs 7, , Hire of equipment 1, , Insurance 75, , IT costs 14, , Licensing fees 1, , Management recharges 204, , Petty cash control 10, , Refuse collection costs 13, , Rent and rates 58, , Repairs and maintenance 35, , Retention of title 222, , Security Costs 206, , Sundry expenses 4, , Utilities 93, , Total 2,480, ,502, , ,515, Cash at Bank 324, , , , Notes 1. Receipts and payments are stated net of VAT. 2. The stock and work in progress that existed at the date of our appointment has been consumed in the process of trading or returned to suppliers under claims for retention of title. 3. With the permission of the Secured Creditors, Gems has paid pre-appointment Joint Administrators fees totalling 18, on behalf of other Group entities. 4. Gems is currently owed 200,000 from Lava Ignite in respect of intra-group loans affected in Administration.

19 Luminar Group Holdings PLC (in Administration) Joint Administrators Abstract of Receipts and Payments from 27 October 2011 to 26 April 2012 Fixed Charge Floating Charge (Trading) Floating Charge (Other) Total Estimated to Realise per Statement of Affairs RECEIPTS Book debts ,000 Cash in transit ,301 Scheme refunds 103, , Total , , ,301 PAYMENTS Joint Administrators fees 1, , VAT Receivable Total , , Cash at Bank , , Notes 1. Receipts and payments are stated net of VAT. 2. Due to insufficient realisations in Finance and with the permission of the Secured Creditors: - Fixed charge Joint Administrators fees totalling 35, were drawn from Oceana. - Fixed charge pre-appointment Joint Administrators fees totalling 6,474.00, were drawn from Gems. Luminar Holdings Limited (in Administration) Joint Administrators Abstract of Receipts and Payments from 28 October 2011 to 27 April 2012 There have been no receipts or payments in Holdings in the period to date. The statement of affairs prepared by management has estimated no realisations in respect of Holdings. Notes 1. Receipts and payments are stated net of VAT. 2. Due to insufficient realisations in Plc and with the permission of the Secured Creditors: - Fixed charge Joint Administrators fees totalling 9, were drawn from Liquid. - Fixed charge pre-appointment Joint Administrators fees totalling 2,107.50, were drawn from Gems.

20 Luminar IP (II) Limited (in Administration) Joint Administrators Abstract of Receipts and Payments from 28 October 2011 to 27 April 2012 There have been no receipts or payments in IP 2 in the period to date. The statement of affairs prepared by management has estimated no realisations in respect of IP 2. Notes 1. Receipts and payments are stated net of VAT. 2. Due to insufficient realisations in IP 2 and with the permission of the Secured Creditors: - Fixed charge Joint Administrators fees totalling 8, were drawn from Liquid. - Fixed charge pre-appointment Joint Administrators fees totalling 2,485.50, were drawn from Gems.

21 Luminar Lava Ignite Limited (in Administration) Joint Administrators Abstract of Receipts and Payments from 28 October 2011 to 27 April 2012 Fixed Charge Floating Charge (Trading) Floating Charge (Other) Total Estimated to Realise per Statement of Affairs RECEIPTS Book debts 2, , ,166,071 Cash floats 57, , Cash in transit 120, , ,173 Deferred consideration interest 3, , Exchange coinage 17, , Fixtures, fittings & equipment 34, , Freehold property 140, , Intra-Group loan 300, , , ,850,000 Leasehold property 32, , Rates refunds 32, , Stock 166, , ,485 Sundry Income VAT payable (160,994.90) (160,994.90) Trading Receipts Trading sales 1,298, ,298, Total 472, ,464, , ,344, ,297, PAYMENTS Joint Administrators fees 343, , , Joint Administrators fees (pre-appointment) 34, , , Agents fees 7, , Irrecoverable VAT 26, , Legal fees 86, , , VAT Receivable 6, , , Trading Payments Bank charges 10, , Cleaning 50, , Consumables 16, , Employee expenses Employee salaries & wages 294, , Event & promotional costs 183, , Food & beverage supplies 318, , Force majeure payments 79, , Health & safety costs 2, , Hire of equipment 8, , Insurance 66, , IT costs 5, , Licensing fees Management recharges (16,647.73) (16,647.73) Petty cash control 32, , Refuse collection costs 10, , Repairs & maintenance 8, , Rent & rates 1, , Retention of title 163, , Security Costs 144, , Subcontractors 6, , Sundry expenses 1, , Utilities 85, , Total 470, ,476, , ,264, Cash at Bank 1, (11,605.27) 90, , Notes 1. Receipts and payments are stated net of VAT. 2. The stock and work in progress that existed at the date of our appointment has been consumed in the process of trading or returned to suppliers under claims for retention of title. 3. Lava Ignite currently has loans totalling 600,000 from other Group entities effected during the Administration period.

22 Luminar Leisure Limited (in Administration) Joint Administrators Abstract of Receipts and Payments from 28 October 2011 to 27 April 2012 Fixed Charge Floating Charge (Trading) Floating Charge (Other) Total Estimated to Realise per Statement of Affairs RECEIPTS Bank interest 8, , , Book debts 521, , ,038,418 Cash in transit Contracts Fixtures, fittings & equipment ,000 Goodwill Licence prepayments 324, , Motor vehicles 13, , Plant & machinery Rent deposits 66, , Sundry income 13, , Unallocated Income 14, , VAT Payable (52,860.48) (52,860.48) Trading Receipts Management Recharge 697, , Rent and service charge income 102, , Trading sales 240, , Total 8, ,040, , ,975, ,538, PAYMENTS Joint Administrators fees 6, , Joint Administrators disbursements 0.00 Agents fees 3, , Bank charges 1, , Legal fees 27, , NewCo Apportionments 98, , VAT Receivable (378.96) (378.96) Trading Payments Cleaning Consumables Employee expenses 27, , Employee salaries & wages 696, , Food & beverage supplies 13, , Health & safety Hire of equipment 23, , IT costs 54, , Refurbishments costs 1, , Refuse collection costs 1, , Rent & rates 49, , Repairs & maintenance 46, , Security costs Subcontractors 40, , Sundry expenses 11, , Utilities 72, , Total ,040, , ,177, Cash at Bank 8, , , Notes 1. Receipts and payments are stated net of VAT. 2. Leisure acts as the banking entity in the Group so has accrued interest on behalf of the wider Group. We are in the process of re-allocating these funds to reflect net realisations in the wider Group companies. 3. Due to insufficient realisations in Leisure and with the permission of the Secured Creditors: - Fixed charge Joint Administrators fees totalling 8, were drawn from Liquid. - Fixed charge pre-appointment Joint Administrators fees totalling 2,515.00, were drawn from Gems.

23 Luminar Liquid Limited (in Administration) Joint Administrators Abstract of Receipts and Payments from 28 October 2011 to 27 April 2012 Fixed Charge Floating Charge (Trading) Floating Charge (Other) Total Estimated to Realise per Statement of Affairs RECEIPTS Book debts 1, , ,035,529 Cash floats 190, , Cash in transit 417, , ,744 Deferred consideration interest 70, , Exchange coinage 83, , Fixtures, fittings & equipment 628, , Freehold property 2,688, ,688, Leasehold property 2,767, ,767, ,550,000 Rates refunds 345, , Stock 377, , ,500 VAT Payable (310,326.45) (310,326.45) Trading Receipts Rent and service charge income 2, , Trading sales 3,437, ,437, Total 5,456, ,817, ,425, ,699, ,291, PAYMENTS Joint Administrators fees 402, , , Joint Administrators fees (pre-appointment) 54, , , Agents fees 58, , Intra-Group loan 100, , , Irrecoverable VAT 36, , Legal fees 309, , , Secured creditors 4,100, ,100, VAT Receivable 9, , , Trading Payments Bank charges 10, , Cleaning 146, , Consumables 40, , Employee expenses 3, , Employee salaries & wages 668, , Event & promotional costs 279, , Food & beverage supplies 966, , Force majeure payments 121, , Health & safety costs 6, , Hire of equipment 7, , Insurance 66, , IT costs 20, , Licensing fees 20, , Management Recharges 274, , Petty cash control 30, , Refurbishment costs 14, , Refuse collection costs 18, , Rent and rates 140, , Repairs and maintenance 56, , Retention of title 351, , Security Costs 226, , Sundry expenses 7, , Utilities 147, , Total 4,976, ,625, , ,175, Cash at Bank 479, , , ,524, Notes 1. Receipts and payments are stated net of VAT. 2. The stock and work in progress that existed at the date of our appointment has been consumed in the process of trading or returned to suppliers under claims for retention of title. 3. With the permission of the Secured Creditors, Liquid has paid Joint Administrators fees totalling 42, on behalf of other Group entities. 4. Liquid is currently owed 200,000 from Lava Ignite in respect of intra-group loans affected in Administration.

24 Luminar Oceana Limited (in Administration) Joint Administrators Abstract of Receipts and Payments from 28 October 2011 to 27 April 2012 Fixed Charge Floating Charge (Trading) Floating Charge (Other) Total Estimated to Realise per Statement of Affairs RECEIPTS Book debts 60, , ,311 Cash floats 145, , Cash in transit 294, , ,804 Deferred consideration interest 51, , Exchange coinage 62, , Fixtures, fittings & equipment 573, , Freehold property 1,977, ,977, Leasehold property 3,429, ,429, ,250,000 Rates refunds 469, , Stock 520, , ,634 VAT payable (332,866.59) (332,866.59) Trading Receipts Rent and service charge income (763.46) (763.46) 1,799,162 Trading sales 4,419, ,419, Total 5,406, ,939, ,324, ,670, ,832,911 PAYMENTS Joint Administrators fees 345, , , Joint Administrators fees (pre-appointment) 36, , , Agents fees 3, , Intra-Group loan 100, , , Irrecoverable VAT 27, , Legal fees 286, , , Secured creditors 4,100, ,100, VAT Receivable 10, , , Trading Payments Bank charges 10, , Cleaning 194, , Consumables 49, , Employee expenses 9, , Employee salaries & wages 887, , Event & promotional costs 490, , Food & beverage supplies 1,134, ,134, Force majeure payments 148, , Health & safety costs 10, , Hire of equipment 113, , Insurance 66, , IT costs 11, , Licensing fees 3, , Management recharges 234, , Petty cash control 62, , Refurbishment costs 267, , Refuse collection costs 19, , Rent and rates 117, , Repairs and maintenance 37, , Retention of title 412, , Security Costs 337, , Sundry expenses 8, , Utilities 149, , Total 4,878, ,775, , ,104, Cash at Bank 528, , , ,566, Notes 1. Receipts and payments are stated net of VAT. 2. The stock and work in progress that existed at the date of our appointment has been consumed in the process of trading or returned to suppliers under claims for retention of title. 3. With the permission of the Secured Creditors, Oceana has paid Joint Administrators fees totalling 35, on behalf of other Group entities. 4. Oceana is currently owed 200,000 from Lava Ignite in respect of intra-group loans affected in Administration.