BA Peters: adminstrators admit cash shortfall

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SailorFrank

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Looks like all those that were knocked for being negative or unfair to Mr Peters may have been right. best of Luck to anyone who lost money.

BA Peters: adminstrators admit cash shortfall

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Scores of would-be boatowners who paid a deposit for a secondhand yacht or stage payment for a new build and were left high and dry this summer when BA Peters plc went into administration are being urged to go to court to claim money owing to them.

Peters Opal were UK agents for Island Packet, Bavaria (pictured right) and Legend yachts. KPMG were appointed as administrators and confirmed last week that there had been claims of over £1 million for 'goods and services that have not yet been provided or for brokerage transactions which are not yet complete'. However, according to KPMG, there is only £651,000 in a client account.
 
The thoughts below are just a layman's view from someone who does not understand the complexities of the world of high finance.

But I am thinking that if a trading company (not calling any names!) have had 1 million in claims, and there is only 650k 'in the pot', can the Owners / Principals of the business not be held accountable in any way?
I know that limited liability companies can (I think) be only held liable for what they have as assets (?) - or can the Directors be held responsible, if (say) any financial skullduggery is uncovered?

If say there was a shortfall of 400 or 500k, I would want to ask the head honcho of the company to dip his hand into his pocket and pull out some beer money, but I guess it doesnt quite work like that!
 
Or as stated else were, have funds been paid to manufactures for part payments, etc, or are customers adding a bit onto there claim.
Hard to comment until final balance sheet from KPMG.

Brian
 
Re the value of their investment, would this be the value of their shares held in the company?
And if this is the case, presumably this would be the most recent share value - so if the share price hits rock bottom, then it wouldnt be an awful lot....
I just hope that all the folk who have given money in good faith to the company concerned either get their boats, or get back their money.
If they dont, then how can anybody ever have any faith again in a company selling boats?
(Oh, and the same question was probably asked when Westerlys and various other marine companies went bust.....)
 
I don't normally repeat post across the forums, so forgive me but I think this needs to be said here.

Firstly, there is no evidence that there have been sticky fingers in the client account. Of the £1m claimed for by customers, it is likely that a large proportion will be for deposits on new boats. Where these boats are built to order, then the deposits may have simply been taken from the client account and passed on to the builder - as they should have been. There has been no mention of the position regarding part paid orders with builders such as Bavaria, Sealine and Azimut - the last of which will almost certainly have asked for stage payments during build.

It will take KPMG time to unravel what has been part paid for and therefore exactly how the money in that account has been used.
 
Not an expert, but as I understand it
Directors who allow a company to continue trade wrongfully, that is, when it is insolvent, can be held responsible for company debts. (if debts exceed assets -including borrowing capacity- or a company cannot meet its outgoings)
BUT in practice the problem is that the administrators have to wear too many hats
(a) To get money in for creditors
(b) To act as policeman to report directors for wrongful treading
(c) Trying to get business for themselves, who appoints them? The directors, and who is going to get appointed if they have a reputation for shopping directors?
 
Whether Peters was in trouble or not it is very sad if not tragic that potential buyers have lost money, wherever whatever it's done no one any good.

Facts; the main issue with directors responsibility is trading while knowingly insolvent. That is the key for "investors" to reclaim monies as directors are personally responsible.

Now KPMG make money out of administration as do all insolvency practitioners (hawks) and it's not good practice to let their "clients" down, clients being the directors of the company thats on it's knees. (unless they are brought in by the bank), was it voluntary administration?

It does however happen that any money left in the company does tend to be distributed to HMRC employees banks then the rest after the administrators fees, balance after the fees; well sadly you'll see in a few months.

Administrators ain't a charity, they make a fortune, pm me for a particular story!

Ian
 
I would imagine a significant part of the shortfall is alreaddy due to the administrators fees. I think they always like to get their snouts in the trough first - wouldn't be much incentive to do the work otherwise.

Also, and a small mercy, is that I think HMRC no longer rank as the top ranking creditor so have to take a haircut along with anyone - presupposes that a company in this condition actually owed them anything
 
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I would imagine a significant part of the shortfall is alreaddy due to the administrators fees. I think they always like to get their snouts in the trough first - wouldn't be much incentive to do the work otherwise.

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The shortfall they are talking about is in the Clients Account, so it isnt money that the administrators should ever be able to get their hands on.

However, they havent automatically decided that it is truly clients ring fenced money, and have chosen to ask the Court how to spend it. It would be interesting to know the approach the adminstrators take to this:

1) They could ask the court to confirm that it is truly clients money, for distribution wholly to those who have part paid for boats...

or

2) They might suggest to the court that, whilst it looks on the face of it like clients money, there is obviously a legal possibility that it it should form part of the assets of the company as it may not have been a proper clents account. They might go on to present the legal arguments.

I suspect the latter is their underlying motive, however it is couched.

1)
 
They have already stated that they are going to ask the court but, as you say, their can only be only reason for this, and that is to get their hands on money which is in an account clearly marked Clients Account.
 
Well they might ask the court if they can distribute the client account at sat 65p/£ where as the res of the unsecured creditors will probably get nothing or very little. the problem is I bet that there is no clear way of know whoes money is actually in the client account.

My guess is that the court will be minded of the fact that there was a clear intention of the company to keep clients money seperate from the compaines working capital for precisley the possibility that at some point the company failed. In this regard it sems to me that the company has tried to protect the interests of its customers.
 
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Well they might ask the court if they can distribute the client account at sat 65p/£ where as the res of the unsecured creditors will probably get nothing or very little. the problem is I bet that there is no clear way of know whoes money is actually in the client account.

My guess is that the court will be minded of the fact that there was a clear intention of the company to keep clients money seperate from the compaines working capital for precisley the possibility that at some point the company failed. In this regard it sems to me that the company has tried to protect the interests of its customers.

[/ QUOTE ]

If a client account is run properly, it will be extremely clear as to whose money is there, and whose money has been paid out, or never paid in. Solicitors do it without too much difficulty, as do letting agents.

It is to be hoped that the court will view it this way ... in fact, you could go as far as to say that they ought really to direct that monies are distributed in full to those whose money is identified as remaining in the account. They should also order an investigation as to the location of the monies which ought to be in the account, but has been paid out, or was never paid in.

Clearly, some people may have claimed that their money should have been paid into the clients account, when it wasnt, and the fact that it wasnt may be perfectly in order, or it may not.

I still take the cynical view that the administrators will be attempting to get their hands on the money to "distribute" as part of the assets of the company, albeit couched in such a way as to look like they are acting in the interests of the customers.

I have personal experience of a trustes solicitors attempt to con me out of a claim on a bankrupt estate .... told them where to get off.
 
[ QUOTE ]
If a client account is run properly, it will be extremely clear as to whose money is there, and whose money has been paid out, or never paid in. Solicitors do it without too much difficulty, as do letting agents.

[/ QUOTE ]

It's not about "whether a client account is run properly", the question is "who does the money belong to?". That's a matter of fact in the circumstances of the contractual arrangements entered into by the company and nothing to do with where the money is actually deposited. What the client account does (or should do) is separate money that 'belongs' to the business from money that 'belongs' to others (e.g. customers).

It is quite possible that some money that was paid into the client account actually belongs to the business. Equally, money that did not belong to the business may have been mingled with the company's own money. In theory, funds that don't belong to the business can be traced and the person who is holding it forced to give it up. In practice, it becomes rather more complicated.

I imagine the court will be asked to decide what part of the client account money actually belongs to persons other than the company and to whom. However, the fact that there is a substantial balance in the client account suggest that the company was at least to that extent properly separating client funds from its own funds. The unfortunate losers, I think, are likely to be be people who ordered a new build and paid a deposit that wasn't paid on the the manufacturer. Brokerage buyers and sellers, I would think, will not be losers.
 
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