Carvill Group Limited in Administration ( the Company ) Case No. 8003 of 2011 High Court of Justice in Northern Ireland Chancery Division Joint Administrators progress report for the period 20 May 2014 to 19 November 2014 15 December 2014
Contents Section Pages 1 Joint Administrators progress report for the period 20 May 2014 to 19 November 2014 2 4 2 Statutory and other information 5 3 Receipts and payments account for the six months ended 20 May 2014 to 19 November 2014 6-7 Abbreviations used in this report IO89 - Insolvency (Northern Ireland) Order 1989 Sch. B1 Schedule B1 to the Insolvency (Northern Ireland) Order 1989 Carvill Group Limited in Administration 1
1. Joint Administrators progress report for the period 20 May 2014 to 19 November 2014 Introduction In accordance with Rule 2.048 of the Insolvency Rules (Northern Ireland) 1991 ( IR91 ), the Joint Administrators ( the Administrators ) are writing to provide creditors with details of the progress of the Administration of the Company for the six months ended 19 November 2014. Administrators actions since last Report Fixed Charge Land and Property Assets Below is a high level update on the key assets owned by the Company and the respective secured lender to whom they are charged. Detailed consultations have taken, and continue to take place, with the secured lenders regarding the portfolio. Danske Bank (Trading name of Northern Bank Limited) The Embankment, Annadale- On appointment, there were 11 units remaining that were geared towards the private market and 12 units that were geared towards the social market, along with an undeveloped apartment site that was built to basement level and had planning consent for 55 apartments. There remain 5 apartments to be sold that are geared towards the private market. The 12 apartments that are geared towards the social market and the undeveloped apartment site, also remain to be sold. The Administrators have engaged a sales agent to explore interest from investors for a single lot portfolio disposal of the remaining units, including the undeveloped site and an offer has been accepted. Contracts are circulating and completion is expected in January 2015. The Administrators continue to secure the remaining units and are in regular contact with the management company to ensure the efficient running of the scheme. Ulster Bank Limited ( Ulster Bank ) Sirocco Quays, Belfast- Given the size and location of this site in the centre of Belfast, and its obvious development potential, the Administrators had previously agreed with the secured lender that significant work should be carried out before a realisation strategy is formalised. This work would help steer any strategic decisions in relation to the site and deal with a number of issues identified by interested parties. As previously indicated the Administrators have obtained a fully costed environmental report and carried out the resulting works including site remediation, archaeological digs, clearance of site vegetation and setting of flood plain levels, in conjunction with the Northern Ireland Environment Agency and the Planning Service. The Administrators have also engaged planning consultants and civil engineers to liaise with the Planning Service and Roads Service in order to quantify the current planning obligations and necessary road infrastructure works. This work is still ongoing. REAM, the specialist Real Estate Asset Management provider, is continuing to implement the 18 month asset management strategy for the site. Woodbrook, Lisburn The Administrators continue to proactively engage with the other parties subject to the Article 40 agreement, working towards restructuring the obligations through engagement with planning consultants and relevant parties within the Planning and Roads Services. A reserved matters planning application was submitted by the design team on 15 September 2014 in order to protect the planning position on the site. REAM, the specialist Real Estate Asset Management provider, is continuing to implement the 18 month asset management strategy for the site. Carvill Group Limited in Administration 2
1. Joint Administrators progress report for the period 20 May 2014 to 19 November 2014 Floating Charge Land and Property Assets Comber Road, Dundonald This site remains on the market with the Administrators sales agent, however, it has attracted only a limited degree of interest. The asking price has been reduced since the Administrators last report, which has produced some fresh interest. Lyndhurstview Road, Belfast Since the last report, this sliver of land has been agreed for sale at a price of 30,000 and contracts are circulating, with completion expected in January 2015. Ground Rents The Administrators continue to implement their collection strategy over the Company s ground rent portfolio and have collected a total of 68,216 to date. Subsidiaries, associates and joint ventures In line with our previous report the Administrators continue to liaise with the Directors of the German entities to determine the possibility of realising value from the intercompany debts and shareholding. Receipts and payments account An account of the receipts and payments for the period 20 May 2014 to 19 November 2014 is set out in section 3 to this report. Receipts in the period include: - Insurance Claims of 10,400; and Rental Income of 15,283. Payments include: - Professional Fees in respect of Woodbrook of 98,000; Insurance of 47,489; and Professional Fees in respect of Sirocco of 45,463. Outcome for creditors Secured creditors At the time of the Administrators appointment, the Company was primarily financed by Danske Bank and Ulster Bank ( the Banks ) with direct secured lending to the Company of c. 83m. The Banks lending is secured by way of fixed and floating charges over all of the Company s assets. There are also cross company guarantees in operation across the wider Carvill Group. The ultimate level of recovery for Danske Bank will be dependent on the final level of asset realisations from the various assets charged to that bank by way of fixed charges (Annadale, Belfast being the remaining asset) as well as the level of funds available from floating charge realisations (after preferential creditors are paid in full, if applicable). It is anticipated that Danske Bank will suffer a significant shortfall on their lending. The ultimate level of recovery for Ulster Bank will be dependent on the final level of asset realisations from the various assets charged to that bank by way of fixed charges (primarily the site at Sirocco Quay, Belfast and the part developed site at Woodbrook, Lisburn). There will be no return under their floating charge as it ranks behind the floating charge held by Danske Bank who will suffer a shortfall on their lending. Preferential creditors Preferential creditors are those amounts due to employees for arrears of wages and holiday pay and are subject to certain statutory limits. On appointment the secured lenders agreed to pay employee arrears (May salaries) on the basis that these would rank as a subrogated claim. This was critical to securing employee co-operation and for the Administrators to gain a detailed understanding of the asset portfolio. The quantum of any preferential dividend will be dependent on the final level of floating charge realisations after realisation costs, however on current projections, a 100p/ dividend may be payable. The secured Carvill Group Limited in Administration 3
1. Joint Administrators progress report for the period 20 May 2014 to 19 November 2014 lenders will recover a portion of the pre-appointment wages paid via their subrogated claim and employees will recover any outstanding holiday pay. Unsecured creditors As stated previously, we wish to advise that based on the estimated realisable values for the assets and the level of secured debt, there will be no funds available for unsecured creditors. Due to the date of Danske Bank s floating charge, the Prescribed Part rules do not apply. Extension of the Administration In accordance with Paragraph 77 of Sch B1 and following an application by the Administrators, the High Court approved an extension to the Administration on 15 November 2012. The automatic end to the Administration was 19 May 2014. As outlined in this report, asset realisations are ongoing, therefore a further extension was required to continue with asset realisations and to make distributions to the secured creditors. In accordance with Paragraph 77 of Sch. B1 and Rule 2.113 of the Insolvency Rules (Northern Ireland) 1991 an application to the Court for a further 24 month extension to the Administration period, was approved on 29 April 2014. The automatic end to the Administration is now 19 May 2016. It is considered that a further extension to the Administration period was more appropriate than moving to liquidation due to the nature of the assets and the higher costs of moving to liquidation. The Administrators envisage that once the objective of the Administration has been achieved, the Administrators will file notice under Paragraph 85 Sch.B1 with the Registrar of Companies, following registration of which the Company will be dissolved three months later. Administrators remuneration The Administrators remuneration in respect of the fixed charge assets is approved by the respective secured creditors. The Administrators remuneration in relation to the floating charge assets has been approved by the secured and preferential creditors. In the period, the Joint Administrators have drawn no remuneration.to date, the Administrators have drawn remuneration of 138,000. Next report The Administrators next report to creditors will be at the earlier of the conclusion of the Administration or in approximately six months. Should you have any queries on the contents of this report, in the first instance please contact Conor Beatty on (028) 9041 5669. Stephen Cave Joint Administrator Carvill Group Limited Stephen Cave and Toby Underwood have been appointed as Joint Administrators of Carvill Group Limited to manage its affairs, business and property as its agents and act without personal liability. Stephen Cave is licensed to act as an Insolvency Practitioner in the United Kingdom. The licence is granted in Ireland by Chartered Accountants Ireland. Toby Underwood is licensed in the United Kingdom to act as an Insolvency Practitioner by the Institute of Chartered Accountants in England and Wales. The Joint Administrators are Data Controllers of personal data as defined by the Data Protection Act 1998. 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. Carvill Group Limited in Administration 4
2. Statutory and other information Court details for the Administration: High Court of Justice, Northern Ireland Chancery Division, 8003 of 2011 Full and trading name: Carvill Group Limited Registered number: NI013947 Registered address: c/o PricewaterhouseCoopers LLP, Waterfront Plaza, 8 Laganbank Road, Belfast, BT1 3LR Company directors: Thomas Carvill, Charles Carvill, Christopher Bryson, Michael Carvill, Margaret Khosla, Christopher Carvill Company secretary: Thomas Carvill Shareholdings held by the directors and secretary: Christopher Carvill (218,224), Michael Carvill (167,739), Thomas Carvill (141,344), Charles Carvill (140,921), Margaret Khosla (83,050) Date of the Administration appointment: 20 May 2011 Administrators names and addresses: Stephen Cave (appointed 27/06/13), Paul Rooney (to 27/06/13) PwC, Waterfront Plaza, 8 Laganbank Road, Belfast, BT1 3LR. Toby Underwoood, PwC, 101 Barbirolli Square, Manchester, M2 3PW. Appointor s / applicant s name and address: The Directors of the Company, c/o 75-77 Derriaghy Industrial Estate, Dunmurry Objective being pursued by the Administrators: Achieving a better result for the Company s creditors as a whole than would be likely if the Company were wound up first (without being in Administration) Division of the Administrators responsibilities: The Joint Administrators shall be entitled exercise all of their functions as such administrators jointly and severally, so that all functions may be exercised by any or all of the joint administrators Proposed end of the Administration: As it is anticipated that there will be no dividend payable to unsecured creditors the Administrators will file notice under Paragraph 85 Sch.B1 with the Registrar of Companies, following registration of which the Company will be dissolved three months later. Estimated dividend for unsecured creditors: Nil Estimated values of the prescribed part and the N/A company s net property: Whether and why the Administrators intend to apply N/A to court under Section 176A(5) IA86: The European Regulation on Insolvency Proceedings The European Regulation on Insolvency Proceedings applies to this Administration and the (Council Regulation(EC) No. 1346/2000 of 29 May proceedings are main proceedings 2000): Any other information which the Administrators None think necessary to enable creditors to decide whether or not to vote for adoption of the proposals: Carvill Group Limited in Administration 5
3. Receipts and payments for the period 20 May 2014 to 19 November 2014 Carvill Group Limited - in Administration Receipts and Payments account Brought forward Period: 20/05/14 to 19/05/14-19/11/14 Carried forward Trading receipts Sale of property - Woodbrook 1 7 5,000.00 0.00 1 7 5,000.00 Sale of property - Annadale 652,000.00 0.00 652,000.00 Sale of property - Heath Lodge 20,000.00 0.00 20,000.00 Sale of property - Colinglenn Road 27,250.00 0.00 27,250.00 Sale of property - Utility Street/ Eureka Driv e 1 1 5,000.00 0.00 1 1 5,000.00 Sale of property - Lev aghery Road 1 2,500.00 0.00 1 2,500.00 Insurance claims 0.00 1 0,400.00 1 0,400.00 Ground rents collected 52,933.59 1 5,283.25 68,21 6.84 Other receipts Funding from chargeholder 31 8,624.7 2 1 88,944.81 507,569.53 Sale of plant & m achinery 1 68,91 5.46 0.00 1 68,91 5.46 Sale of motor v ehicles 1 8,544.87 0.00 1 8,544.87 Refunds 1 7,41 5.50 0.00 1 7,41 5.50 Holiday pay contribution from Construction First 2,821.61 0.00 2,821.61 Third party funds 1,000.00 0.00 1,000.00 Interest receiv ed gross 41 8.20 0.00 41 8.20 Book debts 45.00 0.00 45.00 VAT reclaim ed from HMRC 1 1 4,354.30 4,1 60.01 1 1 8,51 4.31 VAT receiv ed 34,843.49 0.00 34,843.49 1,731,666.74 218,788.07 1,950,454.81 Carvill Group Limited in Administration 6
3. Receipts and payments for the period 20 May 2014 to 19 November 2014 Trading payments Employ ee Related costs (Wages, PAYE, NIC, expenses) 250,387.1 6 2,1 7 3.47 252,560.63 Professional Fees - Sirocco 287,301.1 8 45,463.21 332,7 64.39 Professional Fees - Woodbrook 4,588.94 98,000.01 1 02,588.95 Professional Fees - Annadale 1,894.00 0.00 1,894.00 Professional fees - other 1 1,553.08 0.00 1 1,553.08 Serv ice Charges 7 5,622.98 7,039.57 82,662.55 Legal fees & disbursements 58,7 86.27 7,028.00 65,81 4.27 Heat, Light and Power 36,384.37 1,389.45 37,7 7 3.82 Subcontractors 29,300.00 0.00 29,300.00 Agents fees 29,062.03 300.00 29,362.03 Rent paid 1 8,362.49 0.00 1 8,362.49 Telephone and Fax 1 2,007.03 0.00 1 2,007.03 Lease/ hire & storage charges 8,227.08 1 5,623.56 23,850.64 IT Costs 7,420.32 0.00 7,420.32 Insurance 6,1 92.00 47,489.59 53,681.59 Motor expenses 3,585.86 0.00 3,585.86 Repairs and m aintenance 4,044.02 0.00 4,044.02 Adv ertising 3,098.30 0.00 3,098.30 Cleaning & site clearance 1,265.00 0.00 1,265.00 Other payments Distribution to chargeholder 1 7 4,000.00 0.00 1 7 4,000.00 Legal fees & disbursements 0.00 1,208.00 1,208.00 Office Holder's Fees 1 38,000.00 0.00 1 38,000.00 Bank Charges 8,1 61.43 1 87.7 7 8,349.20 Postage, Stationary and Printing 51.97 0.00 51.97 VAT paid to HMRC 22,823.48 1,1 39.82 23,963.30 VAT paid on purchases 1 20,650.7 9 20,853.25 1 41,504.04 1,312,769.78 247,895.70 1,560,665.48 Total held 389,789.33 Carvill Group Limited in Administration 7