by OUR BUSINESS STAFF
The liquidators of the insolvent Avocet 'revolutionary fuel additive' business are pursuing legal action in a bid to seize two Scarborough apartments which the firm's former chairman Martin Frost allegedly bought for £434,000 by using shareholders' money.
An application has been lodged in the Business and Property Courts in Leeds on behalf of Omega Infinite PLC's joint liquidators Joanne Hammond and Ashleigh Fletcher, of the insolvency practitioners Begbies Traynor. They seek possession of the properties which, they maintain, legally belong to Omega.
They have been investigating the affairs of Omega [formerly called Avocet Infinite] since their appointment by the Secretary of State for Business Energy and Industrial Strategy in April 2020. A full hearing of the application against Mr Frost and his wife Janet Orr Frost - they reside in one of the flats - is scheduled for next month.
Mr Frost was declared bankrupt by a Leeds-based judge in October 2021 after a hearing rejected his claim that millions of pounds would be available to pay creditors from a deal involving Avocet's 'valuable' patents. A number of businesses formerly under the directorship by Mr Frost are either in liquidation or administration.
It is understood the joint liquidators take the view that Omega Infinite, which attracted hundreds of investors by promoting a 'green' vehicle fuel additive was insolvent and unable to pay its debts as long ago as 2017. The Avocet fuel was never marketed, and many shareholders believe they have lost everything. Mr Frost has strongly denied allegations that he and his fellow directors were in charge of a Ponzi scheme.
Following an application to the court in Leeds last week for an order to preserve property pending the full hearing, Mr Frost gave a detailed account of the proceedings in a 'newsletter' to shareholders in Genfro Ltd, another company of which he is joint life president. The communication was headed: TRIUMPH.
He wrote: "Tuesday was a good and happy day for us all. We won and Leeds High Court awarded our costs personally against Omega's liquidators...."
Mr Frost also circulated a copy of a witness statement he lodged with the court in which he described evidence submitted on behalf of the liquidators as 'an unlawful fabrication'.
He went on to claim: "There has not been a formal adjudication of my account with Omega, an account which I believe is millions in my credit. Nor do the liquidators note another £4.8 million I am due from Omega in respect of items sold to Omega during 2018 and 2019.
"The liquidators chose not to have Omega's intellectual property professionally valued but instead abandoned this Omega asset which in 2018/19 had been professionally valued at some £200 million".
But in a report provided to Companies House in June 2022, it was stated: "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 and is securely stored. However, it is estimated that it is of negligible value".
In his statement to the court last week, Mr Frost refuted that he had attempted to sell 'Flat 2', one of the properties said to have been acquired using company cash, and that the document exhibited by the applicants was 'deliberately misleading and wrong'.
His statement added: "The liquidators have failed to realise Omega's assets and have chosen not to value them. Simply put, the liquidators have failed the company and its creditors".
According to Mr Frost, the application for the preservation order had been withdrawn.
In the last published progress report on the Omega liquidation, Ms Hammond and Mr Fletcher warned that creditors of the insolvent business had lodged claims totalling in excess of £20 million but they were not in a position to pay a dividend to any class of creditor.
The report also revealed that the joint liquidators had submitted claims in the respective bankruptcies of Mr and Mrs Frost in the sum of £2,0ll,825 excluding interest and costs.
The former Avocet boss has repeatedly warned that litigation in the US state of Delaware was imminent so that the losses suffered by Avocet at the hands of "Bad Buggers" could be recouped.
In his lengthy newsletter, Mr Frost declares: "As President Biden's retired legal team are Omega shareholders, a class action is commencing in Delaware state seeking some £500 million from the liquidators (and other named parties)".
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