Creditors of collapsed parcel firm City Link are likely to receive just 1p for every pound they are owed, according to the company’s administrator.
In its latest progress report, administrator Ernst & Young (EY) revised down the amount that non-preferential creditors should expect to receive.
When it published its proposals for the administration in February, EY expected creditors would receive a dividend of 2p in the pound.
However the administrator admitted that the final amount available to non-preferential creditors, including trade creditors, is “dependent on future realisations and costs and the total level of claims submitted and agreed”.
As of 13 July, claims from non-preferential creditors totalled £27.2m, but the administrator said there are further creditors, owed a total of £20.7m, who have not submitted a claim.
The administrator added there would likely be a shortfall in regards meeting the sum owed to City Link parent Better Capital, put at £47.7m at the time of its collapse into adminstration.
Former employees are expected to receive the £1.2m they are owed in respect of holiday pay, overtime and pension contributions.
EY said the total recovered from debtors since the company appointed the administrator in December totals £27.1m. £1.1m was raised through the sale of cages, scanners, trademarks, domain names and key databases to DX Group in January, while the sorting machine at its Coventry hub was bought for £97,000 by an undisclosed party.
Some £29,000 was generated through the auctioning of parcels that were left in its network, where the sender could not be traced.
Over 350 former City Link staff are awaiting a hearing date for their group employment case against the company, which seeks to win a greater pay out on the grounds that it did not consult properly with employees before they were made redundant.
In February it emerged that City Link's management had planned to refocus the business on the B2B market shortly before its closure.
