£13 million 'theft' realised just £53,000 at auction

EXCLUSIVE by EWAN LAMB

A raid on a Berwickshire farmhouse by agents working for the liquidators of the insolvent flagship of the Avocet fleet of companies led to accusations of theft by the former occupant of the property, bankrupt businessman Martin Frost.

In a series of emails to shareholders of Omega Infinite PLC (former name Avocet Infinite) Mr Frost claimed the removal of "500 items" of antiques, works of art, fine wines and champagne, and even Titanic memorabilia was tantamount to theft which he valued at £13.3 million worth of Frost family property. Many other articles were either destroyed or dumped, alleged Mr Frost.

But it has been revealed by Omega liquidators Begbies Traynor that the items seized from Harcarse Hill farm, the former headquarters of the Avocet empire, realised just £53,954 at auction, a sum which will be completely swallowed up in storage costs and agent's fees.

A newly published progress report from Omega's joint liquidator Joanne Hammond details the efforts being made to untangle the complicated financial issues which led to the Company's failure. The report also sets out the claims and counter claims by associated companies and the disputed ownership of the Group's intellectual property (IP).

Creditors of Omega Infinite have lodged claims totalling in excess of £20 million. According to the liquidators they are not in a position to pay a dividend to any class of creditor. Meanwhile the costs associated with the liquidation have so far reached £484,000.

The report says: "The joint liquidators are in the process of investigating the Company's financial affairs. Transactions have been identified which required further investigation and correspondence has been entered into with the appropriate parties. It would be prejudicial to the ongoing investigation for the joint liquidators to comment in any further detail at this stage".

As recently as June 21st Mr Frost told 'colleagues' in a written update: "Of special interest: recent stupidity by Begbies Traynor grabbing Avocet Biosolutions PLC Scottish assets shall be litigated against".

However, the liquidators are, in turn, pursuing Mr Frost and his wife for a substantial sum of money.

"During the period of this report the directors of the Company [Omega] Martin Frost and Janet Orr-Frost were both adjudged bankrupt on the petition of United Kingdom Agricultural Lennding Ltd (UKALL). The joint liquidators supported UKALL's petition.

"The joint liquidators have submitted claims in the respective bankruptcies in the sum of £2,0ll,825 excluding interest and costs. It would be prejudicial to investigations for the joint liquidators to comment in any further detail on the claims submitted on the bankruptcy estates at this stage".

It is also disclosed that the joint liquidators of Omega continue to look into any asset movement between associated companies and the inter-company debt position.

In a reference to another insolvent company called AFS Ventures, the report points out: "Investigations are ongoing in relation to the purchase of intellectual property from AFS.

"It is understood from the AFS liquidator's (Eric Walls) report that the consideration to facilitate the transfer of the IP has not been paid in full and the liquidation of AFS has now been converted from a solvent Members Voluntary Liquidation into a Creditors Voluntary Liquidation. Full title to the IP referred to in the sale agreement has not fully passed to the to the prospective purchaser (Omega) therefore there is some uncertainty regarding whether the title to the IP purchased from AFS had passed to (Omega Infinite)".

But the uncertainty surrounding Avocet patents does not end there.

The report explains: "The joint liquidators understand the Company sold its IP to an associated company in December 2018. The joint liquidators are also aware that as part of the agreement the associated company was also to pay Omega £1 million per franchise set-up for each master franchise, and the Company is to receive 30% of the profits generated through seven franchise companies.

"The joint liquidators can confirm that no payments have been received in relation to the franchises since the commencement of the liquidation. The joint liquidators' investigations into the transfer of the IP are still ongoing and it would be prejudicial to the investigations for us to comment in any further detail at this stage".

In a section headed Monies Owed by Former Subsidiary Companies, the report says that according to accounting records Omega was owed £807,563 by Avocet Faculties (in administration with Begbies Traynor as administrators). "The joint liquidators took steps to try and recover the funds from Faculties but payment was not forthcoming".

And in a further twist, Orrdone Farms (in administration) administrator suggests that subsidiary is owed £2.2 million by Omega. However, the report says: "Information provided by the directors suggests that the actual position is that Omega is owed £20.2 million by Orrdone Farms.

"Following a review of the company's accounting records the joint liquidators lodged a claim in the administration of Orrdone Farms in the sum of £10.395 million".

It is also apparent, say the liquidators, that interest payments in the sum of £455,000 have been made from Omega's account against a loan from UKALL to Orrdone Farms. "It does not appear Omega had any liability to UKALL or interest in the assets to which the security related, therefore it is uncertain why the Company would have paid the interest on these loans.

"The joint liquidators have written to UKALL to request repayment of these monies. UKALL's solicitors have disputed this point and the matter is currently under consideration".

Details are then given of the controversial removal of items from Harcarse Hill in the wake of Omega's collapse.

"Eddisons (a firm of valuers - part of Begbies Traynor) attended Harcarse Hill, a farmhouse on the Scottish borders and recovered the contents of the farmhouse which primarily comprised of art and antiques. An auction took place on December 15th 2021. The total hammer price was £53,297.

"Some items could not be sold: samurai sword, sword sticks, taxidermy Hawksbill Turtle etc. and these will be disposed of at no cost. As there is some ambiguity regarding ownership of the items an agreement has been reached with the Orrdone Farms administrator that net proceeds from the sale are held jointly.

"Eddisons have recovered a painting from the company's accountants which was being held as collateral for unpaid fees which was included in the aforementioned auction".

The hundreds of shareholders who invested in Avocet's "revolutionary" fuel additive may be disappointed to read a section of the report dedicated to stock held by Omega.

It says: "The joint liquidators are aware that the Company owns a quantity of cetane additive which the director advised has significant value. A quantity of cetane additive has been recovered by Eddisons and is securely stored. However, it is estimated that it is of negligible value".