THE director of a carpet cleaning business whose collapse left Poole’s speedway team “vulnerable” paid £18,000 to settle a potential claim for wrongful trading.
No 1 Carpet Cleaning Limited was the main sponsor of Poole Pirates and owed the club an estimated £21,000 when a liquidator was appointed in September 2019.
A liquidator’s report said there had been “outstanding queries” over £30,000 in personal expenses and management fees charged by Richie Barratt, director of the business, as well as a potential claim for wrongful trading.
Its affairs have now been wound up, with all its assets taken up by liquidators’ expenses and no money for creditors.
- Poole Pirates chief Matt Ford admits club is in a ‘vulnerable position’ after main sponsor goes into liquidation
Liquidator Rosalind Hilton, of Adcroft Hilton Limited, said she her initial investigation had uncovered several matters that required further enquiries. Some of these issues had been resolved after “extremely lengthy correspondence between the director, the company accountants and myself”, she said.
“These remained outstanding queries with the personal expenses incurred and also potential excessive management fees charged. The expenses and management fees totalled around £30,000,” she said.
“In addition to this, I was considering a potential claim for wrongful trading. The director was unable to provide me with sufficient explanation for the expenses and management fees charged and offered an amount of £10,000 in full and final settlement of all potential claims against him.
“I concluded that this offer was too low and an increased offer of £18,000 was subsequently received. After taking into account the costs of pursuing a claim, in particular a claim for wrongful trading which can become excessive, I concluded that the offer should be accepted. An amount of £18,000 has been received.”
When the administrator was appointed, Mr Barratt estimated that 23 unsecured creditors were owed a total of £496,356. But Ms Hilton received eight unsecured claims totalling £545,137, including from HMRC.
All the business’s assets, including software, machinery, fixtures and fittings, had been sold in 2019 to K4 Global Investments for £70,833. The assets had an estimated book value of £58,585.
However, no formal valuation was undertaken and a firm of chartered surveyors was unable to say whether the sale had been fair value.
Ms Hilton reported: “Following a further review of the information provided, I have concluded that it would be difficult to prove that K4 had not acted in good faith. As such, I do not consider it is economic to pursue this any further.”
Poole Pirates owner Matt Ford said in 2019 that the collapse of its main sponsor had put the club in a “vulnerable position” and the year had been financially “easily the worst year for the club since I have been involved”.
Mr Barratt is still a director of other, active companies, including No 1 Carpet Cleaning Franchises UK Limited.