by OUR BUSINESS UNIT
All of the directors of debt-ridden Avocet Group subsidiary Orrdone Farms Ltd. could soon be facing court action under the Insolvency Act after failing to co-operate with the company's administrator over a two-year period.
Meanwhile it has been revealed that claims on the Borders-based agricultural business from unsecured creditors has spiralled to £11.35 million following a single submission seeking £10.395 million from liquidators of another insolvent member of the Avocet stable, Omega Infinite PLC.
These latest developments in the saga of the Group once presided over by its bankrupt former chairman Martin Frost are disclosed in a progress report lodged with Companies House by Orrdone administrator Emma Porter. The document covers the period July 2021 to February 2022.
She points out yet again that those in charge of Orrdone - directors Mr Frost, Dr Bob Jennings, Janet Orr Frost and company secretary Eirlys Lloyd - have all failed to fulfil their statutory duties by providing the administration with the information it has requested from them.
"The non-co-operation of all of the directors of the company has continued during the period", states Ms Porter. "The administrator's work has been severely curtailed throughout the administration by the directors' failure to provide any satisfactory explanation as to the state of the company's affairs as at the date of the administration appointment [January 2020]."
She adds that as this is in direct contravention of their statutory duties as directors, the administration is pursuing legal channels available to it under insolvency legislation.
"The last audited accounts were for the period ended 31 December 2017 which means that a full account of both the company's assets and liabilities have not been provided for a period of over two years. Numerous allegations have been made by directors about both assets and liabilities of the company, none of which have been able to be substantiated due to the lack of evidence provided.
"The administrator has taken advice from her solicitor to consider whether individual court actions should be raised against the directors to enforce their co-operation under the Insolvency Act 1986".
But Ms Porter explains her ability to progress these actions had been hampered by Covid-19 restrictions. However it was now possible to raise court actions again and she was taking legal advice to consider the most appropriate action to take against all of the directors.
And she points out: "I continue to be made aware from a number of sources of extensive correspondence issued to a wide variety of parties commenting directly on the administration procedure or the administrator personally. The extensive correspondence continues to be at best often inaccurate and in many instances inappropriate.
"As stated in previous reports our investigations suggest the primary purpose of these communications is to deflect attention away from the matters in hand in order to delay unnecessarily the progress of the administration. Having continued during the period to review and monitor the communications, this remains my view.
"Despite the unfortunate obstruction and deflection tactics employed by the directors, I am pleased to report that some progress has been made in dealing with the sale of the company's assets".
Harcarse Hill farm, the former Orrdone HQ where Mr Frost lived for a time has now been sold with secured creditor UK Agricultural Lending Ltd. (UKALL) receiving all of the proceeds.
Ms Porter confirms the secured lender held a debenture over the whole of the company's property. She says: "The sum due at the outset was £3.25 million. At July 2021 the sum of £4.03 million remained outstanding. Interest will continue to run on the outstanding debt until it has been settled".
So far as the contents of Harcarse Hill farmhouse and cottages are concerned...Mr Frost has repeatedly alleged millions of pounds worth of items have been 'stolen' from the property...the report claims the actual value of contents totalled £33,050.
In addition, items of a clearly personal nature were left within the properties after the directors moved out. Says Ms Porter: "Numerous attempts were made to the directors requesting that they remove their personal items. However, they declined to make arrangements for collection".
Then the report reveals how the liquidator of Omega Infinite PLC, once the flagship parent company of the Avocet group, laid claim to the contents of the houses at Harcarse Hill.
"However, evidence of ownership was not provided, and the liquidator requested time to allow him to investigate further. An approach to dealing with the contents was agreed between liquidator and administrator.
"The administrator was made aware that the assets uplifted by the liquidator had been sold at auction, and therefore contacted the liquidator for comment. The liquidator has confirmed most assets have been sold at auction with unsold items to be placed into another auction.
"The liquidator has not yet provided evidence of ownership or a full accounting of the sale and associated costs. However, he has advised rge anticipated realisations will be used in full to defray storage costs and agents' fees. The administrator is reserving her position on this matter until a full accounting has been provided".
Ms Porter's progress report also records the fact that on October 18th 2021 Mr Frost and Mrs Orr Frost were both made bankrupt, and that Louise Brittain, of the firm Azets, was appointed as Trustee of both parties.
"The bankruptcy petition was raised by UKALL after calling up the personal guarantees Mr & Mrs Frost signed in relation to the loan UKALL provided to the company. The administrator will be submitting a claim in the bankruptcies and is monitoring the progress of the bankruptcies as a dividend payable will have an impact on the company's position".
According to the report, 158 potential creditors of Orrdone have been identified although many of them have not submitted a proof of claim. Unsecured creditor claims totalling £11.350 million have been received by the administration, including the £10.395 million claim from Omega Infinite PLC - In Liquidation.
"Adjudications of the [Omega] claim has not yet taken place as there remains insufficient funds to allow a dividend to be paid", and Ms Porter warns in a separate passage of her report "there are insufficient funds to meet the cost of the administration".
Meanwhile the courts have extended the period of Orrdone Farms' administration until 2024.
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