'Luxury holidays' paid for by Avocet company bank account

by OUR OWN REPORTER

Luxury holidays featuring business class travel to Venice, Athens and Lisbon coupled with high quality accommodation were enjoyed at the company's expense by Avocet Group chairman Martin Frost and his wife, according to paperwork produced by liquidators of the 'disruptive ' technology outfit.

Insolvency experts challenged payments from Mr Frost's Director's Loan Account [DLA] totalling over £28,000 to Classic Collection Holidays during his tenure at the helm of the troubled parent company Omega Infinite PLC. The tour company specialises in "Personalised Luxury Holidays", says its website.

And the insolvency practitioners also queried other 'travel expenses' met from the DLA which topped £100,000, and for which there were "no receipt or other vouching whatsoever".

The findings from the assessment of Omega's affairs, including disputed DLA payments - the account was overdrawn by more than £850,000 when it was closed in 2019 - formed one strand of evidence in support of a court application aimed at repossessing two upmarket Scarborough flats, bought by Mr Frost using shareholders' money, according to a judge.

Mr Frost, a bankrupt, has claimed the deficit details of the DLA had been "fabricated" and did not reflect his indebtedness to the company.

A document sent to Mr Frost by a law firm representing liquidators Begbies Traynor stated: "Our clients have identified numerous payments made by the Company in respect of foreign travel. Some of these payments are supported by invoices within the Company's books and records but others are not.

"A total of £28,589 was paid to 'Classic Collection Holidays' for seven trips to various European
destinations including Venice, Athens and Lisbon. The invoices for these trips are contained within the Company's books and records. It is not apparent what, if any, business interests the Company had in those locations. 

"Our clients note that each of the invoices records that you and Mrs Orr Frost travelled business class, stayed in a high standard of accommodation and stayed for up to seven nights (well beyond what one would expect to be necessary for a business meeting)."

Mr Frost had been asked to explain and provide evidence that the trips with Classic Collection Holidays were for the benefit of the Company and its business but had not done so. The liquidators considered it reasonable to conclude that the trips were luxury holidays for Mr Frost and Mrs Orr Frost and were not for the benefit of the Company.

The court paper continues: "Our clients have identified from the Company's bank statements and Xero ledger in relation to travel expenses payments totalling £100,636 for which there is no receipt or other vouching whatsoever. The majority of such payments were made to Thomas Cook Travel. 

"Our clients have been unable to identify any evidence that the Company derived any benefit from this expenditure or that it was incurred for that purpose."

By causing or allowing the Company to incur expenditure on travel for the personal benefit of the Frosts, or otherwise than for the benefit of Omega and its business, Mr Frost had breached his duties as a director. 

Another matter covered in the correspondence from the law firm relates to payments made from the DLA to a company called Loch Lomond Heritage, referred to as LLH.

LLH was incorporated in 2012, and Mr Frost had been its sole director from the outset.

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"We wrote to LLH on behalf of our clients concerning payments in the sum of £222,872 made from 28 November 2017 to 9 July 2019 which we and our clients consider were preferences. We have not received a satisfactory response to our letter.

"We and our clients consider that, as well as being preferences, the payments to LLH were made in breach of your duties as a director of the Company".