Liquidation of Western Greyhound bus company concluded with dividend for creditors

South coast based insolvency practice Portland Business Recovery has concluded the Liquidation of Western Greyhound Ltd having overcome some unexpected issues through the Liquidation.

The Newquay based public service bus operator, which served much of Cornwall, was placed into Administration in March 2015 having ceased trading suddenly after a series of problems including a fire at its premises and issues relating to difficulties in obtaining insurance cover.

Portland were appointed as administrators to manage the company’s affairs. Steps were taken to sell the freehold offices and yard together with the bus fleet and other assets.

Liquidation of Western Greyhound

The former employees had been made redundant by the company without notice because of the problems which had beset the business. Portland assisted the employees to make claims, which were met from The National Insurance Fund, for arrears of pay, holiday pay, redundancy and payment in lieu of notice.

In February 2016 the Administration was converted to Creditors’ Voluntary Liquidation with Portland being appointed as joint liquidators. The process was required to enable the funds from the disposal of the company’s assets to be distributed to creditors.

Although the sale of the assets was relatively straightforward the agreement of the claims proved more problematic.  As a result, the Liquidation has only recently concluded.

Lengthy negotiations took place with the secured creditor regarding the level of settlement to be paid to them from the sale of the freehold. Portland successfully agreed a substantially reduced settlement which enhanced the amount of funds then available for preferential and unsecured creditors in the Liquidation.

The sudden closure also subsequently gave rise to a significant number of former employees making Employment Tribunal claims as a result of the company not being able to fully consult with them over redundancy. This gave rise to protracted legal action to determine the level of claims with the Employment Tribunal which were eventually agreed at approximately £200k.

Director of Portland Steve Godwin commented :

“Although the case has taken longer to complete than we anticipated at the outset the outcome is a positive one in that the secured, preferential and unsecured creditors have all received a return in the liquidation. In addition, the former employees have been compensated for the sudden and unexpected termination of their employment.  This is a case where the company had no realistic opportunity to consult with the staff as required by statute and is a classic example of where insolvency legislation and employment law do not always sit comfortably alongside each other.”

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