Rocketing costs led to Ratio’s demise

CLAIMS management firm Ratio Money, part-owned by Coronation Street star Michael Le Vell, collapsed after overheads doubled to £1.1m.

Altrincham-based Ratio could not cover these costs, up from £508,000, despite pumping in an extra £250,000. It made a pre-tax loss of £495,000 in the 10 months to December which left it unable to pay its creditors.

The business was set up in 2007 by 41% shareholder Matthew Porteus to win back consumer bank charges and later moved into credit agreements, charging an upfront fee of £295 for taking on cases.

The events that led to its failure are detailed in a creditors’ report filed at Companies House by administrators from the accountancy firm Leonard Curtis.

The report, which does not explain why costs grew so rapidly,  shows debts of £736,000 with £51,000 owed to Mr Le Vell, who plays Kevin Webster in Coronation Street.

Some £200,000 is owed to Christopher Lambourne, the Surrey-based entrepreneur who gave the business his financial backing when it was set up in 2007.

Other creditors include HM Revenue & Customs, owed £212,000, and a Ratio subsidiary, Ratio Search & Selection, owed £168,694. A claim of around £15,000 from staff is anticipated.

Administrators do not expect a payment to unsecured creditors and the only secured creditor was Mr Lambourne who has bought back the goodwill, contracts and book debts for £45,000.

Mr Le Vell, pictured, became a director of the company in September 2008 and holds a 25% stake. He resigned as a director on March 19.

One of Ratio’s competitors, Manchester-based Cartel Client Review, ran into trouble in March after it had its licence suspended by the Claims Management Regulator, part of the Ministry of Justice, preventing from carry out its claims management services.

The suspension followed customer complaints about the £10m turnover firm, which although unable to trade, has not entered administration.