Creditors of Tony Pryce Sports Limited, headquartered in Minehead, have received a dividend of 100p in the pound just 18 months after the company went into Administration, Bristol-based accountancy and business advisory firm BDO LLP has announced.
The business, with sales of £20m and which traded from 34 locations across the South West and South Wales, was sold to Mantra Brands Limited by joint administrators Graham Randall and Mark Roach from BDO LLP last year.
The business comprised 19 shops trading under the Tony Pryce Sports, Wipeout and Edge brands, with a further 15 Animal Clothing stores operated under licence.
Graham Randall, a BDO business restructuring partner in Bristol, is delighted with the outcome. He explains: “At the start a dividend of around 60p in the pound was anticipated for unsecured creditors whose total claims were estimated to be in the region of £4m.
“The team worked very hard to maximise the return for all trade creditors, exceeding all expectations. During the current tough trading conditions, businesses can ill afford to lose their hard-earned money through customers becoming insolvent. This is an excellent example of how losses can be recovered.”
The BDO team worked on three key areas to achieve this result. Firstly the business was energetically marketed, resulting in two very keen parties and a good price being negotiated for the business. As part of the deal BDO persuaded the purchaser to take on certain liabilities, including credit notes, gift vouchers and loyalty points that were in circulation. The business was also sold on the basis that the purchaser took on all stores and retained all staff. These efforts resulted in liabilities being reduced and employee claims eliminated.
Secondly BDO challenged the historic rates that had been paid by the company at head office and a number of trading locations resulting in many refunds from local authorities.
Finally BDO carefully considered all creditor claims, particularly those of landlords, claiming for unpaid rent, service charge or dilapidations for example. The administrators successfully challenged a number of these claims thereby reducing liabilities and increasing the dividend for creditors.
Graham Randall said: “Our duty is to maximise the fullest possible return for creditors. It is unusual in an insolvency to make a payment in full to unsecured creditors and this is the second occasion we have achieved it in recent times.”
