Trade creditors will be millions of pounds out of pocket as a result of the collapse of Specialist Leisure Group (SLG) last year.
The parent company of Shearings and National Holidays went into administration in May 2020, with the loss of about 2,600 jobs and the cancellation of 64,000 bookings.
The Shearings brand has since been acquired and relaunched by Leger Holidays, with no link to SLG. The National Holidays brand was acquired by an affiliate of the JG Travel Group, which owns touring brands including Just Go! Holidays and Omega Breaks.
A progress report from administrators EY – covering activity from November 22, 2020, to May 21, 2021 – revealed that secured creditor Lloyds Bank Group (LBG) received an initial £7.1 million and a second payment of £3 million.
The report said: “A third and final distribution to LBG is expected; however, it is anticipated that LBG will still suffer a shortfall.”
It means there will not be any money to repay other creditors, said the administrator.
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Preferential creditor claims total about £653,000, while non-preferential claims will be in the region of £405 million.
Within the £405 million total, about £134 million is from trade creditors; £32 million from customers; and £239 million from intercompany creditors.
The report said 421 creditor claims have been received, totalling £98 million – all from trade creditors.
“Due to insufficient realisations to cover the shortfall in the secured lenders funding, it is not envisaged that there will be any funds available for a distribution to the unsecured creditors of the companies,” it said.
The report detailed assets that have been realised during the period from November 22 to May 21, including £2,000 from travel agents and £214,000 from pre-paid event tickets.
It brings the total from agents to £55,000, while the total from tickets reached £1.6 million.
Refunds of £22,000 were secured from pre-paid flights but the report added: “Due to the uncertainty of booking information provided by the company and the ongoing difficulty in communication with the respective airlines, there is significant difficulty in achieving traction on these refunds.”
The administrators said the total remuneration cost would be more than £4.4 million – £62,000 more than originally estimated.
But the administrators will not draw remunerations in excess of the fee estimate, added the report.
They said the reasons for exceeding the estimate included the size of the group and complexity of recognising receipts and payments accurately – and they did not anticipate the level of claims from employment tribunals.
On Wednesday (June 30) a tribunal ruled that more than 900 people who lost their jobs when Shearings went into administration were not properly consulted in the redundancy process.
The judgment paves the way for a pay-out in the form of a Protective Awards claim from the Redundancy Payments Service (RPS), which is part of the government’s Insolvency Service.
The SLG administration process was due to end automatically on May 21 but it has been extended for up to 12 months to allow the completion of the remaining work.
This includes realising assets such as refunds; sorting tax and VAT returns; and assisting employees, customers and trade creditors with claims.