Pre-pack sale of Bedworth Haulage contained anti-embarrassment clause

The pre-pack administration and sale of Bedworth Haulage included an “anti-embarrassment clause”, according to a creditors' report.

The clause stipulates that the purchaser, C4-Safety, can not sell up within 12 months without paying 25% of the sale price back to administrator Quantuma to be used to settle debts of the collapsed business.

The report also explained that Bedworth originally encountered financial problems in 2016, “arising from high costs of managing the fleet and unprofitable work leading to a reduction in margins”.

It entered into a CVA in early 2017 but administrators at Quantuma said it failed to keep up with payments and the company built up additional post-CVA liabilities.

The Warwickshire temperature-controlled haulier eventually failed in January this year.

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• Bedworth Haulage creditors realised the company was in trouble before collapse
• Bedworth Haulage sold for less than £17,000
• Bedworth Haulage sold in pre-pack administration deal

Rescue options were discussed but due to “increasing creditor and supervisor pressure and that wages were outstanding, it was considered that a pre-pack administration was appropriate for the company”.

The business and assets were sold to C4-Safety - Robert Thacker is connected with both Bedworth Haulage and C4-Safety - for £16,794, made up of £11,552 in goodwill, £5,240 in equipment and £2 for the business records.

The report added that the secured creditor, Bibby Financial Services, was paid in full and that there were no preferential creditors as the employees transferred under TUPE regulations to the purchaser.

It added: “Unsecured claims were estimated at £3,715,129.31 and to date eight claims have been received from unsecured creditors totalling £1,342,012.46.

“It is not anticipated that a dividend will be paid to unsecured creditors.”