Joint administrators’ progress report from 9 August 2019 ... · August 2019 to 8 February 2020 Prestige Hotel Reservations Limited (in administration) ... Notice to creditors seeking

Strictly private and confidential

Joint administrators’ progress report from 9 August 2019 to 8 February 2020

Prestige Hotel Reservations Limited

(in administration)

Court of Session

Case no. P765 of 2018

6 March 2020

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2 Joint administrators’ progress report from 9 August 2019 to 8 February 2020

Table of contents

Abbreviations and definitions 3

Key messages 5

Overview of what we’ve done to date 6

Appendix A: Receipts and payments 9

Appendix B: Remuneration update 10

Appendix C: Pre-administration costs 15

Appendix D: Other information 16

Appendix E: Notice to creditors seeking decisions by correspondence 17


Abbreviations and

definitions The following table shows the abbreviations and insolvency terms that may be used in this report:

Abbreviation or definition Meaning

Company Prestige Hotel Reservations Limited

Administrators Graham Douglas Frost and Peter David Dickens

firm PricewaterhouseCoopers LLP

IR86 Insolvency (Scotland) Rules 1986

ISCVAAR18 The Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018

IA86 Insolvency Act 1986

Sch.B1 IA86 Schedule B1 to the Insolvency Act 1986

HMRC HM Revenue & Customs

prescribed part The amount set aside for unsecured creditors from floating charge funds in accordance with Section 176A IA86 and the Insolvency Act 1986 (Prescribed Part) Order 2003

secured creditors Creditors with security in respect of their debt, in accordance with Section 248 IA86

preferential creditors Claims for unpaid wages earned in the four months before the insolvency up to £800, holiday pay and unpaid pension contributions in certain circumstances. In this case ‘the RPS’.

RPS Redundancy Payments Service, an executive agency sponsored by the Department for Business, Energy & Industrial Strategy, which authorises and pays the statutory claims of employees of insolvent companies under the Employment Rights Act 1996

unsecured creditors Creditors who are neither secured nor preferential

the Bank Bank of Scotland Plc

Monument Monument Leisure (Holdings) Limited

AMA Accelerated Merger and Acquisition

“Clarity” or “the Purchaser” Mawasem Limited (trading as Clarity)

RPS Redundancy Payments Service

SIP16 Statement of Insolvency Practice 16: Pre-packaged sales in administrations

TUPE Transfer of Undertakings (Protection of Employment) Regulations 2006

Proposals Joint administrators’ proposals for achieving the purpose of administration, dated 16 August 2018


This report has been prepared by Graham Douglas Frost and Peter David Dickens as joint administrators of the Company, solely to comply with the Joint Administrators’ statutory duty to report to creditors under ISCVAAR18 on the progress of the administration, and for no other purpose. It is not suitable to be relied upon by any other person, or for any other purpose, or in any other context.

This report has not been prepared in contemplation of it being used, and it is not suitable to be used, to inform any investment decision in relation to the debt of or any financial investment in the Company.

Any estimated outcomes for creditors included in this report are illustrative only and cannot be relied upon as guidance as to the actual outcome for creditors.

Any persons choosing to rely on this report for any purpose or in any context other than under ISCVAAR18 do so at their own risk. To the fullest extent permitted by law, the Joint Administrators do not assume any liability in respect of this report to any such person.

Please note you should read this report in conjunction with the Joint Administrators’ previous reports issued to the Company’s creditors, which can be found at www.pwc.co.uk/prestige. Unless stated otherwise, all amounts in this report and appendices are stated net of VAT.

Graham Douglas Frost and Peter Dickens have been appointed as joint administrators of Prestige Hotel Reservations Limited to manage its affairs, business and property as its agents without personal liability. Graham Douglas Frost is licensed in the United Kingdom to act as an Insolvency Practitioner by ICAS. Peter David Dickens is licensed in the United Kingdom to act as an Insolvency Practitioner by ICAEW. The Joint Administrators are bound by the Insolvency Code of Ethics which can be found at: https://www.gov.uk/government/publications/insolvency-practitioner-code-of-ethics

The Joint Administrators may act as controllers of personal data as defined by UK data protection law depending upon the specific processing activities undertaken. PricewaterhouseCoopers LLP may act as a processor on the instructions of the Joint Administrators. Personal data will be kept secure and processed only for matters relating to the Joint Administrators’ appointment. Further details are available in the privacy statement on the PwC.co.uk website or by contacting the Joint Administrators.

PricewaterhouseCoopers LLP is a limited liability partnership registered in England with registered number OC303525. The registered office of PricewaterhouseCoopers LLP is 1 Embankment Place, London WC2N 6RH. PricewaterhouseCoopers LLP is authorised and regulated by the Financial Conduct Authority for designated investment business.

https://www.google.com/maps/search/1+Embankment+Place,+London%0D%0AWC2N+6RH?entry=gmail&source=g

https://www.google.com/maps/search/1+Embankment+Place,+London%0D%0AWC2N+6RH?entry=gmail&source=g


Key messages

Why we’ve sent you this report We’re writing to update you on the progress of the administration of Prestige Hotel Reservations Limited in the six months since our last report dated 12 September 2019.

You can still view our earlier reports on our website at www.pwc.co.uk/prestige.

How much creditors may receive The following table summarises the possible outcome for creditors, based on what we currently know.

Class of creditor Amount Owed Current estimate

Previous estimate

Secured creditors N/A N/A N/A

Preferential creditors £9,814.16 100% 100%

Unsecured creditors £1.47m 18% 11%

You may recall that there are no secured creditors of the Company and therefore there will be no distribution to this class of creditor.

The RPS is the only known preferential creditor, with a debt of £9,814.16 (adjusted from a previous estimate of £9,380), which will be fully repaid in due course.

We are pleased to report we have now concluded adjudicating all claims received from unsecured creditors. We currently estimate that the Company’s unsecured creditors will get a dividend of around 18%. This is based on total unsecured claims being admitted to the value of £1.47m, with £263k available to distribute. We expect to pay the dividend in the next two to three months.

What you need to do This report is for your information and you don’t need to do anything.

http://www.pwc.co.uk/company


Overview of what we’ve done to date

As explained in our earlier report, we have undertaken a number of different work streams in order to progress and achieve the purpose of the administration. Below is a brief outline of the work done in the first twelve months of the administration (to 8 August 2019):

● Completed the sale of the business and assets immediately following our appointment. The sale included: goodwill, contracts / customer list (17 customers in total) and work in progress / associated order book; for consideration of £15,000 plus VAT. All employees transferred to the purchaser, mitigating claims from employees against the Company.

● Recovered cash in the Company’s pre appointment bank accounts and arranged for their closure.

● Investigated whether any contractual trust arrangements applied to funds held in the Company’s pre appointment bank accounts. Our work did not identify any such arrangements in place.

● Carried out work to maximise the level of book debt recoveries and other sundry assets, which involved appointing a third party agent to assist us.

● Secured and archived the Company’s books and records.

● Dealt with the lease on the Company premises.

● Liaised with our internal tax and VAT teams to ensure compliance on tax matters and submitted the first VAT return.

● Drafted and issued our SIP16 report and Proposals (and subsequent notice of their approval) and wrote to creditors inviting them to submit claims. Our Proposals were treated as approved on 28 August 2018.

● Undertook an investigation into the actions of the directors prior to the administration and reported our findings to the Secretary of State.

● Sought consent from the preferential creditor to extend the administration beyond the statutory period of one year. The preferential creditor agreed with this approach. The Registrar of Companies acknowledged the extension on 29 July 2019 and the administration is now due to expire on 8 August 2020, unless further extended by the Court.

● Made a claim for our remuneration and outlays to the preferential creditor (RPS) for the accounting period ending on 8 February 2019. Whilst not specifically relating to our remuneration as joint administrators, the RPS also made the following determinations:

○ Unpaid pre-administration costs of £69,151.56 as detailed in the Proposals dated 16 August 2018, should be paid as an expense of the administration

○ That the Administrators’ receipts and payments covering the period from 9 August 2018 to 8 February 2019 were correctly stated

○ The Administrators should be discharged from liability in respect of any action of theirs as administrators in accordance with Paragraph 98(3)(b) of Sch. B1 IA86, with effect from the date that the appointment of administrators ceases to have effect.

● Started winding-down the Company’s affairs prior to its ultimate dissolution.

We remain in office because we need to make a first and final distribution to preferential and unsecured creditors. Once we have made these distributions we will be able to finalise winding-down the Company’s affairs prior to its ultimate dissolution.


Progress since we last reported Realisation of other assets During the period we concluded our book debt collection process. We have achieved a positive result, collecting a total of £141,727 compared to the directors’ estimated realisations of £64,688. We believe all of the Company’s assets have now been realised.

Since the end of this period, we have received a final VAT refund from HMRC of £52,394. This amount can be seen in the ‘VAT Control’ account in Appendix A.

Claims and dividends During the period we began reviewing unsecured creditor claims in preparation for paying the first and final dividend. This process included maintaining an accurate list of creditors, logging creditor claims received, reporting to creditors, inviting creditors to submit claims and adjudicating all claims received. We have now finished adjudicating claims and have a finalised position.

In our Proposals we explained that the manner in which the administration would end (and any dividend distributed to creditors) was still to be determined, but indicated that we may apply to court for permission to pay a dividend (should there be one) during the administration. We do not believe a liquidation process would be the most cost effective option given the higher costs of a second and short insolvency procedure compared to the costs of applying to court for such permission. As such we will be applying to court to seek its approval to pay the unsecured distribution in the administration. Once and if this is approved, we will pay the dividend to unsecured creditors. We expect this to be in the next two to three months. We have agreed the preferential creditors claim and will be paying this in March 2020.

Investigations and actions Nothing has come to our attention during the period under review to suggest that we need to do any more work in line with our duties under the Company Directors’ Disqualification Act 1986 and Statement of Insolvency Practice No.2.

Our account of intromissions We set out in Appendix A an account of intromissions in the administration from 9 August 2019 to 8 February 2020.

Our fees In the circumstances of this case and as required by insolvency legislation, the preferential creditor (the RPS) is the approving body for our remuneration and certain related matters.

As required, we made a claim for our remuneration and outlays to the RPS within 14 days of the accounting period ending on 8 February 2020. We have asked the RPS to give the following determinations:

● THAT the Joint Administrators’ remuneration for the period 9 February 2019 to 8 August 2019 should be fixed at £39,458 in line with the SIP 9 schedule of time;

● THAT the joint Administrators’ remuneration for the period 9 August 2019 to 8 February 2020 should be fixed at £75,974 in line with the SIP 9 schedule of time; and

● THAT the Joint Administrators’ future and final remuneration for the remainder of the case should be fixed at £52,915 in line with the estimated SIP 9 schedule of time.

Whilst not specifically relating to our remuneration as joint administrators, we have requested that the RPS also makes the following determination:

● THAT the Joint Administrators’ receipts and payments (account of intromissions) covering the period from 9 August 2018 to 8 February 2020 are correctly stated.

You will recall from our previous reports, that the RPS approved our fees for the value of £191,652 for the period 9 August 2018 to 8 February 2019, along with category 2 disbursements of £1,500.76. The RPS also approved the payment of unpaid pre-administration costs. All of these costs have now been paid, however we drew £69,011.18 in relation to pre-administration costs, rather than the approved amount of £69,151.56.


As we believe a dividend is now available to unsecured creditors, our future work will include work performed for the benefit of the unsecured creditors, as they now have an economic interest in the outcome of the administration. Whilst we have sought approval to our remuneration in accordance with the requirements of insolvency legislation and whilst it’s not strictly necessary under the insolvency rules, we believe it is appropriate to invite creditors to confirm their agreement to the costs expected to be incurred in the current and (if any) future accounting periods. Specifically, we are seeking the approval of unsecured creditors that the Joint Administrators’ remuneration for the period from 9 February 2020 until they cease to act, should be fixed at £52,915 in line with the enclosed estimated SIP 9 schedule of time.

We have enclosed a form for creditors to complete and return, to indicate their approval (or otherwise), to the resolution shown. Completed forms should be returned to ‘Prestige Hotel Reservations Limited, c/o PwC, Level 8 Central Square, 29 Wellington Street, Leeds, LS1 4DL’, by the deadline of 30 March 2020. Please also note that any creditor or creditors of the Company (representing in value at least 25% of the creditors) may apply to court not later than eight weeks after the end of an accounting period for an order that our remuneration or outlays be reduced on the grounds that they are, in all the circumstances, excessive.

Further information on the above can be found in Appendix B.

Pre-administration costs You can find in Appendix C, further information about the approval of the unpaid pre-administration costs previously detailed in our Proposals.

Creditors’ rights You can find a note explaining the rights of creditors in relation to our fees and expenses, and how to request further information, online at: https://www.icas.com/__data/assets/pdf_file/0015/2265/Creditors-Guide-to-Administrators-Renumeration-ICAS.pdf

You can also get a copy free of charge by telephoning James Crowther on 0113 289 4076.

What we still need to do The following is a list of the key areas of our work before the administration can be concluded:

● seek court approval to pay the unsecured distribution in the administration;

● submit a scheme of division to the court for approval;

● pay unsecured and preferential dividends;

● pay administrators’ outstanding fees and expenses (once approved);

● reissue unclaimed dividend and pay any uncashed dividend cheques to the Accountant in Court; and

● finalise and complete case closure matters and statutory tasks, such as submitting a final progress report to the registrar of companies.

We will update creditors on the progress or completion of this work, in our next report.

Next steps We expect to send our next report to creditors at the end of the administration or in about six months, whichever is the sooner.

If you’ve got any questions, please get in touch with James Crowther on 0113 289 4076.

Yours faithfully for and on behalf of the Company

Graham Frost Joint administrator

https://www.icas.com/__data/assets/pdf_file/0015/2265/Creditors-Guide-to-Administrators-Renumeration-ICAS.pdf

https://www.icas.com/__data/assets/pdf_file/0015/2265/Creditors-Guide-to-Administrators-Renumeration-ICAS.pdf

jcrowther002

Stamp


Appendix A: Receipts and payments


Appendix B: Remuneration update

Our time and average rates from 9 August 2018 to 8 February 2019

As confirmed earlier, the amount of £191,652 has been approved and paid. The table below shows a summary of the work performed.


Our time and average rates from 9 February 2019 to 8 August 2019 We have made a claim for our remuneration for the accounting period from 9 February 2019 to 8 August 2019. The table below shows a summary of the work performed in this period.


Our time and average rates from 9 August 2019 to 8 February 2020 We have made a claim for our remuneration for the accounting period from 9 August 2019 to 8 February 2020. The table below shows a summary of the work performed in this period.


The table below shows the time costs we have incurred to date and what we expect to incur in the future.

Future costs will principally arise in relation to:

● finalising the scheme of division and making an application to court for permission to distribute funds to creditors;

● distributing the dividend to unsecured creditors in the administration;

● fulfilling ongoing statutory requirements (including future reporting to creditors and other statutory

tasks);

● winding down the Company’s affairs and bringing the administration to an end; and

● dealing with unclaimed dividends and reissuing dividend cheques


Payments to associates We did not make any payments to associates in the period covered by this report.

Disbursements We don’t need to get approval to draw expenses or disbursements unless they are for shared or allocated services provided by our own firm, including room hire, document storage, photocopying, communication facilities. These types of expenses are called “Category 2” disbursements and they must be directly incurred on the case, subject to a reasonable method of calculation and allocation and approved by the same party who approves our fees.

Our expenses policy allows for all properly incurred expenses to be recharged to the administration some of which have been approved by the preferential creditor where required. We have recently sought approval from the preferential creditor for the payment of unpaid category 2 disbursements.

The following disbursements arose in the period of this report.

Our relationships We have no business or personal relationships with the parties who approve our fees or who provide services to the administration where the relationship could give rise to a conflict of interest.


Appendix C: Pre-administration costs

In our Proposals dated 16 August 2018, we made a statement that costs had been incurred with a view to the Company entering administration. We gave details of the work involved and why it was necessary to perform that work before the Company entered administration.

The details are not repeated here, however a summary of those costs that remained unpaid at the time of our appointment is shown below.

The above pre-appointment expenses were approved by the preferential creditor in February 2019, and as such have now been paid. As mentioned previously, the amount of pre-administration costs actually paid was slightly lower than the approved amount in the table above. This is because our solicitors, Pinsent Masons, invoiced an amount for pre-administration work slightly lower than the information previously given to us.


Appendix D: Other

information

Court details for the administration: Court of Session P765 of 2018

Company’s registered name: Prestige Hotel Reservations Limited

Trading name: Prestige Hotel Reservations Limited

Registered number: SC197811

Registered address: Atria One, 144 Morrison Street, Edinburgh, United Kingdom, EH3 8EX

Previously: 4 The Grange, Perceton, Irvine, Ayrshire, KA11 2EU

Date of the joint administrators’ appointment:

9 August 2018

Joint administrators’ names and addresses:

Graham Douglas Frost - Atria One, 144 Morrison Street, Edinburgh, United Kingdom, EH3 8EX

Peter David Dickens – No.1 Spinningfields, Hardman Square, Manchester, M3 3EB

Extension(s) to the initial period of appointment:

Administration extended to 8 August 2020

Appointor’s / applicant’s name and address:

James Davidson – PO Box 7993, Irvine, Ayrshire, KA11 2YF

Patricia O’Brien – 11 Cregarth House, The Crescent Davenport, Stockport, SK3 8SL Split of the joint administrators’

responsibilities: The functions to be exercised by the Joint Administrators are all functions which the Joint Administrators will require to exercise in relation to their appointment. Any act required or authorised under any enactment to be done by an administrator may be done by either or both of the Joint Administrators and/or any other persons holding the office of administrator of the Company from time to time, acting jointly or alone.


Appendix E: Notice to

creditors seeking decisions

by correspondence

Our Ref: 20190222/JC/GF/Prestige

Rule 2.28 Insolvency (Scotland) Rules 1986 Notice of conduct of business by correspondence

Name of Company


Company number

SC197811

In the Court case number Court of Session P765 of 2018 (full name of court) (a) names and addresses of the administrator(s)

Notice is hereby given by (a)

(b) company name and registered office (c) number of resolutions proposed

Graham Douglas Frost of Atria One, 144 Morrison Street, Edinburgh, United Kingdom, EH3 8EX and Peter David Dickens of No.1 Spinningfields, Hardman Square, Manchester, M3 3EB give notice to the unsecured creditors of (b) Prestige Hotel Reservations Limited, Atria One, 144 Morrison Street, Edinburgh, United Kingdom, EH3 8EX that, pursuant to Paragraph 58 of Schedule B1 to the Insolvency Act 1986, below are (c) resolutions for your consideration.

Please indicate below whether you are in favour or against each resolution. (d) address for returning forms (e) deadline for returning forms

This form must be received at (d) PwC, Central Square, 29 Wellington Street, Leeds, LS1 4DL by 12.00 hours on (e) 30 March 2020 in order to be counted It must be accompanied by details in writing of your claim (unless you have already submitted a proof of debt).

* delete as appropriate

Resolution 1

The Joint Administrators’ future and final remuneration for the remainder of the case should be fixed at £52,915 in line with the estimated SIP 9 schedule of time. Resolution 2 That a creditors’ committee is not established

For/Against* For / Against*

THIS FORM CONTINUES ON THE NEXT PAGE…

Our Ref: 20190222/JC/GF/Prestige

Rule 2.28 Insolvency (Scotland) Rules 1986 Notice of conduct of business by correspondence

Name of Company


Company number

SC197811

In the Court case number Court of Session P765 of 2018 (full name of court)

TO BE COMPLETED BY CREDITOR WHEN RETURNING FORM:

Signed:

Print name:

Name of creditor:

(If signing on behalf of creditor, state capacity e.g. director/solicitor)

If you require any further details or clarification prior to returning your vote, please contact us at the address above.

Signed:

Graham Douglas Frost Joint Administrator

Dated: 6 March 2020

Please return this form to the Joint Administrators at the address shown in section (d) on the previous page. DO NOT send this form to Companies House.

Documents

Joint administrators’ progress report from 9 August 2019 ... · August 2019 to 8 February 2020 Prestige Hotel Reservations Limited (in administration) ... Notice to creditors seeking