Stoke Place Hotel Limited (in administration)

Transcription

1 Joint administrators progress report from 9 May 2016 to 25 October 2016 Stoke Place Hotel Limited (in administration) Registered number: High Court of Justice, Chancery Division, Companies Court 25 October 2016 Case No of 2015 PwC LLP Central Square 29 Wellington Street Leeds LS1 4DL

2 Contents Abbreviations and definitions 2 Key messages 3 Overview of what we ve done to date 4 Progress since we last reported 5 Appendix A: Receipts and payments 7 Appendix B: Expenses 9 Appendix C: Remuneration update 10 Appendix D: Other information 14 Stoke Place Hotel Limited PwC Contents

3 Abbreviations and definitions The following table shows the abbreviations and insolvency terms that may be used during this report: Abbreviation or definition Company Administrators firm Bank Purchaser Meaning Stoke Place Hotel Limited Rachael Wilkinson and Matthew Callaghan PricewaterhouseCoopers LLP HSBC Bank Plc Minhoco 30 Limited SPA Sale and Purchase Agreement IR86 Insolvency Rules 1986 IA86 Insolvency Act 1986 Hilco Hilco Valuation Services Europe Savills Savills Plc Sch.B1 IA86 Schedule B1 to the Insolvency Act 1986 SIP 16 prescribed part secured creditors preferential creditors unsecured creditors Statement of Insolvency Practice 16: Prepackaged sales in administrations The amount set aside for unsecured creditors from floating charge funds in accordance with section 176A IA86 and the Insolvency Act 1986 (Prescribed Part) Order 2003 Creditors with security in respect of their debt, in accordance with section 248 IA86 Claims for unpaid wages earned in the four months before the insolvency up to 800, holiday pay and unpaid pension contributions in certain circumstances Creditors who are neither secured nor preferential 2

4 Key messages Why we ve sent you this report This report provides an update on the progress of the administration of Stoke Place Hotel Limited ( the Company ) covering the period from 9 May 2016 to 25 October The purpose of this report is to support a request for a 12 month extension from the secured creditor. The general body of creditors will be updated of the outcome of the resolution. You can still view the first progress report on our website at Please get in touch with Madeline Finkill on or at madeline.finkill@uk.pwc.com if you would like a paper copy. How much creditors may receive The following table summarises the possible outcome for creditors*, based on what we currently know. Class of creditor Secured creditors Preferential creditors Current estimate (p in ) 25p N/A Unsecured creditors 02p *Please note this guidance on dividends is only an indication and should not be used as the main basis of any bad debt provision or debt trading. We do not expect to be able to fully repay the secured creditor for its secured lending to the Company. As part of the SPA, we were able to secure all employees jobs and transfer them to the Purchaser. Their arrears of wages were paid as part of the trading expenses. We do not believe any employees have any arrears of holiday pay, however, should any arise, the Purchaser agreed to pay for their claim under TUPE Regulations. Based on our Company s records at the date of our appointment we expect the total amount unsecured creditors to be c. 1.0m and therefore each would get a dividend of up to 2% from the prescribed part. The exact amount of any dividend will be dependent on the final level of claims received. Our claims team are beginning the process of gathering information from the unsecured creditors and will begin reviewing these claims in due course. What you need to do If you haven t already done so, please ensure you send your claim to us. A claim form can be downloaded from our website at or you can get one by telephoning Madeline Finkill on

5 Overview of what we ve done to date The Company leased and traded Stoke Place, a hotel based in Stoke Poges, Buckinghamshire. We were appointed because of the increasing financial pressure following a sharp fall in bookings in 2014 and an inability to achieve occupancy, event and food and beverage revenue targets. We noted in our last report that prior to the administration we marketed the business and were able to identify a purchaser for the business and the majority of the assets. On appointment we entered into the SPA with the Purchaser. We needed the consent of the landlord in order to complete the sale, therefore we took the decision to trade in administration until 4 January 2016 when the sale was concluded. Immediately on appointment we secured and took control of the Company s assets, which included: An interest in the leasehold property A motor vehicle Plant and machinery Stock of food and beverages Cash floats The Goodwill The Business Records The Customer contracts The Debts When we last reported, the key outstanding matters in the administration were as follows: Finalisation of the trading position; and Paying a distribution to the unsecured creditors from the prescribed part. 4

6 Progress since we last reported Trading The decision was taken to trade the Company in administration until the sale of the business and assets could complete. Once the sale completed, we then aimed to finalise the administrators trading position through the collection of trading receivables, the payment of suppliers and the agreement of cut off matters with the Purchaser. To date there is a trading deficit of 73, and we do not expect this to change based on what we currently know. Trading in administration allowed us to complete the sale of the hotel as a going concern and secure all employees jobs. We believe this resulted in a much better price being achieved for the assets than had the hotel closed. Sale of business and assets As previously mentioned the sale of the business and majority of its assets was concluded on 4 January 2016 and resulted in a total consideration of 3.9 million. You can access more information on the background to the sale, the assets sold and split of proceeds in our SIP 16 report that accompanied our Proposals. This can be found on the website at Realisation of other assets The following assets were also realised; Company car this was sold for 23,500 on 4 December Debtors to date, debts of 35,315 have been realised and we do not expect to realise any further debts. Other issues We explained in our previous report and our Proposals that at the date of appointment there was an unauthorised loan of 1.6million to Novtej Dhillon from the Company. Since the last report we have made the decision to no longer pursue the recovery of this debt. A freezing order has been placed on the directors assets due to ongoing third party litigation. After reviewing the situation, we have concluded that there is no realistic possibility of obtaining a recovery for the administration. There will be no realisations to the Company as a result. Approval of our proposals As noted in our last report our Proposals were treated as approved on 6 January Investigations and actions As part of the administration, it is our duty to carry out investigations of everyone who has acted as a director of the Company in the three years prior to the administration under the Company Directors Disqualification Act 1986 and the SIP 2. We fulfilled our duty as Administrators to prepare this report and submit to the Insolvency Service. As noted above, we have investigated the unauthorised loan to Novtej Dhillon but concluded there is no realistic prospect of recovery and there are no other matters we are aware of which require further investigation. Our receipts and payments account We set out in Appendix A an account of our receipts and payments in the administration from 9 May 2016 to 25 October

7 Our expenses We set out in Appendix B a statement of the expenses we ve incurred to the date covered by this report and an estimate of our future expenses. The statement excludes any potential tax liabilities that we may need to pay as an administration expense; we are aiming to conclude our tax position soon in order to fully establish funds available for distribution to creditors. The Company is now VAT deregistered and we aim to recover VAT on any future expenses we incur. Our fees We set out in Appendix C an update on our remuneration which covers our fees, disbursements and other related matters in this case. Creditors rights Creditors have the right to ask for more information within 21 days of receiving this report as set out in Rule 2.48A IR86. Any request must be in writing. Creditors can also challenge fees and expenses within eight weeks of receiving this report as set out in Rule IR86. This information can also be found in the guide to fees at: You can also get a copy free of charge by telephoning Madeline Finkill on Next steps On concluding the trading account and finalising our tax and VAT positions, we will review the funds available to pay the prescribed part to unsecured creditors while in administration. On our review, should we discover tax liabilities that would significantly reduce the available funds, we will apply to the court to disapply the prescribed part. Otherwise we shall proceed to pay a dividend to the unsecured creditors from the prescribed part and distribute the remaining funds to the secured creditor. We expect to send our next report to creditors at the end of the administration or in about six months, whichever is the sooner. If you ve got any questions, please get in touch with Madeline Finkill on Yours faithfully For and on behalf of the Company Rachael M Wilkinson Joint Administrator Matthew Boyd Callaghan and Rachael Maria Wilkinson have been appointed as joint administrators of Stoke Place Hotel Limited to manage its affairs, business and property as its agents and act without personal liability. Both are licensed in the United Kingdom to act as insolvency practitioners by the Institute of Chartered Accountants in England and Wales. The joint administrators are bound by the Insolvency Code of Ethics which can be found at: The joint administrators are Data Controllers of personal data as defined by the Data Protection Act PricewaterhouseCoopers LLP will act as Data Processor on their instructions. Personal data will be kept secure and processed only for matters relating to the administration. 6

8 Appendix A: Receipts and payments Stoke Place Hotel Lim ited in adm inistration Receipts and Paym ents for the period from 9 Novem ber 2015 to 25 October 2016 Fixed charge receipts 9 Novem ber 2015 to 8 May May 2016 to 25 October 2016 T otal Leasehold property 3,683, ,683, Goodwill 50, , Intellectual property Bank interest Global Pay receipts 139, , Total fixed charge receipts 3,87 3, ,87 3, Fixed charge paym ents Legal fees and disbursements (48, ) (48, ) Agents fees and disbursements (40, ) (40, ) Rent (60,268.44) (60,268.44) Office holders fees (100,000.00) (100,000.00) Total fixed charge payments (149,458.81) (100,000.00) (249,458.81) Distribution to the fixed chargeholder (3,139, ) (3,139, ) Total net fixed charge realisations 584, (100,000.00) 484, Floating charge receipts Fixtures and fittings 166, , Customer contracts & business records Cash and cash equivalents Motor vehicles 23, , Book debts 35, , Trading surplus/(deficit) (63, ) (9,888.16) (7 3,354.86) Bank interest gross 1, , Total floating charge receipts 164, (9,281.20) 155, Floating charge paym ents Statutory advertising (67.00) (67.00) Professional fees (18, ) (18, ) Office holders fees and disbursements (26,066.52) (26,066.52) Total floating charge payments (18,941.90) (26,066.52) (45,008.42) Total net floating charge realisations 145, (35, ) 110, VAT control account (20,887.21) (12, ) (33,686.50) Adm inistrators' balance at bank 7 08, (148,147.01) 560,

9 Stoke Place Hotel Lim ited in adm inistration T rading receipts and Pay m ents for the period from 9 Novem ber 2015 to 25 October 2016 T rading receipts 9 Novem ber 2015 to 8 May May 2016 to 25 October 2016 T otal Trading sales, deposits and booking payments 27 9, , Total trading receipts 27 9, , T rading pay m ents Suppliers (58,653.90) (2, ) (61,381.82) Wages and salaries (17 1,299.94) (1,368.01) (17 2,667.95) Agency labour (29,536.50) (29,536.50) Rent (23, ) (23, ) Telephone services (11, ) (11, ) Insurance (8,887.56) (8,887.56) Refunds (11,635.00) (1,560.00) (13,195.00) Lease and hire payments (298.85) (298.85) Sales commission (6,952.28) ( ) (7,348.95) Duress payments (396.00) (396.00) Bank interest and charges (3,339.41) (15.00) (3,354.41) Utilities (16, ) (3,820.56) (20,043.03) Total trading payments (342, ) (9,888.16) (352,504.53) Trading surplus/(deficit) (63, ) (9,888.16) (7 3,354.86) 8

10 Appendix B: Expenses The following table details expenses that are payable by us as administrators from the estate and includes our fees but excludes distributions. The table should be read in conjunction with the receipts and payments account at Appendix A, which shows expenses actually paid during the period and the total paid to date. The table also excludes any potential tax liabilities which will also be payable in the administration. This will only be concluded at the end of the tax accounting period. Incurred in the previous period Incurred in the period under review Estimated future Anticipated total Agents fees and disbursements 40, , Legal fees and disbursements 48, , Statutory advertising Bank charges 3, , Rent 83, , Duress payments Suppliers 58, , , Wages, salaries and arrears 171, , , Agency Labour 29, , Telephone service 11, , Refunds 11, , , Utilities 16, , , Lease and hire payments Sales commission 6, , Insurance 8, , Office holders fees 125, , , Office holders disbursements 1, , Storage Professional fees 18, , Total 512, , , ,

11 Appendix C: Remuneration update Our fees are approved on a fixed fee basis by the Bank and we have currently drawn fees of 125,000. On our review of the available funds to unsecured creditors, we also expect to agree 15,000 in relation to the agreement and distribution of the prescribed part. Our complete Administrators Remuneration report dated 3 February 2016 can be found on the website at We set out later in this Appendix details of our work to date, anticipated future work, disbursements, subcontracted work and payments to associates. Our work in the period Whilst this is not an exhaustive list, in the following table we provide more detail on the key areas of work: Area of work Work undertaken Why the work was necessary What, if any, financial benefit the work provided to creditors OR whether it was required by statute Strategy & planning Budgets and monitoring Case strategy and update meetings For the proper management of the case Controls efficiencies, time costs and ensures continued case progression Secured creditors Reporting to the Bank with progress and expected outcome The bank is the largest creditor and its consent is required to any sale of charged assets Reporting as requested by the company s largest creditor Trading Engaging with suppliers to maintain trading the Company Reviewing the trading position Maintain the reputation of the hotel Compliance with SPA Allowed sale of Hotel as going concern significantly enhancing asset realisations. Concluding trading position and liaising with suppliers to clear accounts Creditors Contacting creditors regarding their queries Ensuring all creditors are correctly filed and information is maintained To ensure all creditors receive the information they are entitled to during the Administration To allow all known creditors the A legal requirement placed on the Administrators to report to all creditors May ultimately allow creditors to receive a dividend 10

12 Engaging with the creditor team to begin the claims process opportunity to submit claims Accounting & treasury Performing bank reconciliations Processing trading payments and receipts Accounting for receipts and payments relating to the trading period To maximise the value of the Company s assets Proper and efficient stewardship and accounting for administration funds. Improved realisations available to creditors Required by statute and regulation Liaising with HSBC regarding funds received in error Statutory & compliance Preparing and circulating the proposals Preparing and circulating the remuneration report To comply with mandatory statutory and other obligations placed on administrators Required by law or regulatory requirement Preparing and circulating first progress report Filing statutory documents with the Registrar of Companies Updating and maintaining case website Tax & VAT Reviewing the Company s tax position and preparing returns Liaising with internal specialists Preparing VAT returns and reconciling the VAT account To comply with legal requirements Required by statute or other legal requirement Ensures any available tax and VAT recoveries are made for the insolvency estate Mitigates liability and ensures VAT reclaimed Employee & pensions Liaising with HMRC regarding pensions Paying any PAYE and pension deductions To comply with legal requirements Required by statute or other legal requirement 11

13 Our future work We still need to do the following work to achieve the purpose of administration. Area of work Work we need to do Whether or not the work will provide a financial benefit to creditors Strategy & planning Reviewing progress of administration strategy and amending as appropriate Creditor Agreeing creditor claims Dividend payment process Dealing with creditor queries Statutory & compliance Reporting to creditors Complying with statutory filing requirements Senior staff review Maintaining case records Ensuring case progression and continued efficiency Facilitates the payment of a dividend to creditors Legal requirement Tax and VAT Completing VAT and tax filings Legal requirement Closure Obtaining clearances from third parties engaged in the administration Incidental to the management of the administration The major part of the outstanding work concerns the agreement of creditor claims and distributing the remaining funds to unsecured and secured creditors. Disbursements We don t need to get approval to draw expenses or disbursements unless they are for shared or allocated services provided by our own firm, including room hire, document storage, photocopying, communication facilities. These types of expenses are called Category 2 disbursements and they must be directly incurred on the case, subject to a reasonable method of calculation and allocation and approved by the same party who approves our fees. To date we have drawn 1,086 in disbursements. Our expenses policy allows for all properly incurred expenses to be recharged to the administration and approval will be requested from the Bank where required. The following disbursements arose in the period of this report. Category 2 2 Policy Photocopying at 5 pence per sheet copied, only charged for circulars to creditors and other bulk copying. Mileage At a maximum of 71 pence per mile (up to 2,000cc) or 93 pence per mile (over 2,000cc) Costs incurred All other disbursements reimbursed at cost 19 Total 19 12

14 Our relationships We have no business or personal relationships with the parties who approve our fees or who provide services to the administration where the relationship could give rise to a conflict of interest. Legal and other professional firms We ve instructed the following professionals on this case: Service provided Name of firm / organisation Reason selected Basis of fees Legal services, including: Drafting sale and purchase agreement Dealing with all legal matters around the sale of business Drafting management agreement General advice on the administration appointment Valuation services, including Valuing the inventory and fixtures and fittings Property agent, including: Marketing the business Sale process support Managing agents, including: Operational support Site visits Trading support Eversheds LLP Hilco Valuation Services Europe Industry knowledge / insolvency expertise Industry knowledge / insolvency expertise Time costs and disbursements Fixed fee Savills Plc Industry knowledge Percentage of realisations Licensed Solutions Limited Industry knowledge / insolvency expertise Time costs and disbursements 13

15 Appendix D: Other information Court details for the administration: Company s registered name: Trading name: Registered number: Registered address: Date of the joint administrators appointment: Joint administrators names and addresses: Extension(s) to the initial period of appointment: Appointor s / applicant s name and address: Split of the joint administrators responsibilities: Net property and prescribed part Disapplying the prescribed part High Court of Justice, Chancery Division, Companies Court Court Case f 2015 Stoke Place Hotel Limited Stoke Place Hotel Limited Benson House, 33 Wellington Street, Leeds, LS1 4JP Formerly Stoke Green, Stoke Poges, Slough, Buckinghamshire, SL2 4HT 9 November 2015 Rachael Wilkinson, PricewaterhouseCoopers LLP, One reading Central, 23 Forbury Road, Reading, RG1 3JH and Matthew Callaghan, PricewaterhouseCoopers LLP, 7 More London, Riverside, London, SE1 2RT n/a The directors of the Company Stoke Place Hotel Limited, Stoke Green, Stoke Poges, Slough, Buckinghamshire, SL2 4HT In relation to paragraph 100(2) Sch.B1 IA86, during the period for which the administration is in force, any function to be exercised by the persons appointed to act as administrators may be done by any or all of the persons appointed or any of the persons for the time being holding that office. Under s176a IA86 and the Insolvency Act 1986 (Prescribed Part) Order 2003, proceeds must be set aside from realising assets covered by a floating charge to be distributed to unsecured creditors. This is calculated as 50% of the first 10,000 of net floating charge realisations plus 20% of anything thereafter, subject to a cap of 600,000. We currently estimate the net property will be some 101,000 and that the prescribed part (before costs) will be 22,000. In relation to s176a(2) IA86, the office holder may use their discretion to disapply the prescribed part if the value is less than 10,000 or apply to the courts if the prescribed part is over 10,000. We do not currently expect to make an application to court to disapply the prescribed part. 14