Avocet firm with £940,000 debts had £15 in bank!

EXCLUSIVE by OUR BUSINESS STAFF

An investigation into the latest financial disaster involving the Avocet Group of 'disruptive technology' businesses has revealed a deficit of £940,000 with just £15 in cash lying in the company's bank account.

The first report from joint administrators appointed to Avocet Faculties Ltd in September shows hundreds of thousands of pounds are owed to associated insolvent companies Avocet Infinite (now called Omega Infinite) and Avocet Farms (Orrdone Farms) with HMRC also listed as a creditor.

Prior to its collapse into insolvency it was disclosed that Avocet Faculties had paid £200,000 for a dilapidated jetty and a narrow strip of land on the shores of Loch Lomond. The same piece of real estate changed hands for just £1,000 five years earlier.

Now administrators Kris Wigfield and Jason Ainge, from insolvency experts Begbies Traynor have instructed agents to sell the redundant pier at Port A Chaipuill and to market the company's only other asset, a pair of farm cottages in Berwickshire.

The sole director of Avocet Faculties is Dr Bob Jennings who replaced the now bankrupt businessman Martin Frost in September 2020. Company secretary is Eirlys Lloyd who fills that role for a number of Avocet businesses. The solitary £1 share in Avocet Faculties is held by another Avocet outfit, Avocet Bio Solutions Ltd., registered in the Irish Republic.

In his report, Mr Wigfield explains that the administrators had been appointed by Omega Infinite as holder of a qualifying floating charge, acting by its liquidators Ashleigh Fletcher and Joanna Hammond, also from Begbies Traynor.

According to the report: "The director has not yet provided the joint administrators with details of the company's history. The director has not yet prepared a statement of affairs of the company as of September 2021 nor provided sufficient information to prepare an accurate one".

Omega Infinite as principal creditor is associated with Avocet Faculties by common directors and shareholders, the report says. Omega was granted several charges against the company's property and undertaking, including security charges over the property and Loch Lomond jetty.

"Cash in the sum of £15 was identified in the books and records located at the company's registered office. This amount has been paid into the administration bank account".

Mr Wigfield estimates Omega Infinite was owed £807,563 at the time of his appointment. HMRC has a claim for £21,860 relating to outstanding PAYE while Orrdone Farms Ltd is due £88,864 - unsecured creditors have claims totalling £111,745. Among those due money is a former employee owed £11,443.

Both Omega Infinite and Orrdone Farms have lengthy lists of creditors owed between them a sum running into many millions of pounds..

The Avocet Faculties report states: "At this stage, in order that potential realisations are not prejudiced, we do not ascribe a realisable value to the properties, although a shortfall to Omega's indebtedness is anticipated".

However, the administrators add that they have been provided with certain information which requires consideration in relation to the validity of Omega's charges, prior to any distribution being made.

But if the Omega security is valid there will be no dividend for other creditors.

"On present information the joint administrators believe the most appropriate exit route from administration is for the company to move into liquidation. There may be matters for enquiry concerning a company's affairs which are not within the scope of an administrator's powers and which can only be properly dealt with by a liquidator".

Pre-administration costs are shown as £18,862, and these are currently unpaid.