Good news! The unsecured creditors of Oddbins, which collapsed into administration at the end of March, will get some of their money back. Bad news, it probably won’t be much.
The administrator, Deloitte, is giving no guidance on when a payout is likely. Nor do some of the 732 staff who lost their jobs know when they will get the £120,000 they have claimed as preferential creditors for unpaid wages and holiday entitlements.
Those are the principal statements in the statutory six-month report to creditors from Deloitte, the administrator.
So far some £2.3 million has been raised through assets disposals, including the sale of 37 stores to European Food Brokers, which is continuing the Oddbins name. Simon Baile, the former managing director, also took five outlets from the administrator.
Lead administrator Lee Manning says that after paying the secured creditors (including HM Revenue and Customs, which was owed £8.6m) “there should be sufficient asset realisations to make funds available to the unsecured creditors”.
That will be welcome to the many suppliers left with large bad debts because of the collapse of one of their biggest customers. Most have written off the losses, so any payment (6p in the pound has been mooted in some quarters) will be an ironic bonus in a future year’s accounts.
The problem is that no-one can tell when they might get it because some litigation is continuing, as are attempts to conclude further asset sales. To date, unsecured creditors have lodged claims totalling £12.6m.
They include not only trade suppliers but also landlords and utility companies. It is still possible to lodge a claim, which heightens the administrator’s difficulties in calculating the final liabilities.
By the start of October, the administrators had chalked up £2,065,964 plus VAT in fees, a sum that will continue to rise until next April, which is when the court and creditors have to decide whether the potential to raise further cash is likely to outweigh the fees incurred in pursuing it, or whether to wind up the old Oddbins .
As part of its statutory duty, Deloitte has reviewed the actions and conduct of the Oddbins directors (Simon Baile and chairman Henry Young) in the two years before the collapse of the company and a confidential report was sent at the end of September to the Insolvency Service.
In addition, Deloitte is continuing to examine transactions between Oddbins and Ex-Cellar, which is controlled by Simon Baile, before the company went under.
Meanwhile, as if the Oddbins collapse was not enough for producers, wholesalers and importers to contend with this year, Baker Tilley, the company restructuring specialist, reports that 48 hotels and licensed premises in England and Wales called in an administrator between June and the end of September.
That was a 33% rise on the second quarter of this year and 26% higher than at in the same period in 2010.