Egg producer and supplier - case study

• Sector - Agriculture: production and processing
• Turnover - £11.1 million
• Number of employees – 18

Situation

With the Company’s business already having ceased to trade prior to our appointment as Administrator and no buyer for the business subsequently being forthcoming, there was seemingly no prospect of a return to unsecured creditors.

Approach

Following our appointment, we secured and prevented two insurance policies from lapsing. Having undertaken an analysis as to the benefit of retaining the policies in the event a default event occurred, the policies were maintained.

With a default event subsequently occurring, recoveries of some £203k were made.

In addition, seeking to maximise asset realisations for the benefit of all stakeholders, we identified a potential third party claim as part of our investigations.

This potential claim was pursued and ultimately successfully settled, resulting in:

• A cash recovery of some £297k
• The settlement by the respondents of a secured creditors’ claim of some £386k and the withdrawal of the subrogated secured claim following settlement.
• The settlement by the respondents of a secured creditors’ claim of some £43k and the withdrawal of the subrogated secured claim following settlement.
• The withdrawal by the respondents of a subrogated unsecured claim of some £228k, having settled an unsecured creditors’ indebtedness under a guarantee.
• The withdrawal by the respondents of further unsecured claims of some £17k.

Overall, our proactive open-minded approach taken during the Administration has had a financial benefit of some £1.17m for the insolvent estate.

Impact

Realisations as a consequence of our work resulted in significant distributions being able to be made to multiple classes of creditors, including an unexpected dividend distribution to the unsecured creditor class:

• Preferential creditors’ received a distribution of some £18k, representing 100p in the £.
• Secured creditors’ claims of some £429k were settled in full in accordance with the settlement negotiated, meaning they received 100p in the £.
• Unsecured creditors’ claims were agreed at the reduced sum of £860k, given £245k of claims were withdrawn in accordance with the settlement negotiated. Unsecured creditors received a distribution of £452k, meaning they received some 52p in the £.

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