Lighthouse collapsed with debts of £3.9m
A LIVERPOOL drugs and alcohol charity that fell into administration in September collapsed with liabilities of £3.9m.
The figure, revealed in a creditors’ report, is far higher than the £2m originally anticipated.
The Lighthouse Project, founded in 1967, ran 20 projects providing support to drug and substance users for primary care trusts (PCTs) in Liverpool, Knowsley, Sefton and St Helens.
But mounting financial problems, including tax and VAT arrears of £1.85m, led the directors to seek the protection of administration.
Its collapse sparked immediate concerns for the users of its services but the PCTs stepped in and took control of case notes and appointed new service providers under short term agreements.
According to the report the charity began to experience cash flow difficulties in July having racked up debts of £300,000 since April. In the year to March 2009 it recorded a loss of £1.3m. Accounts filed with the Charities Commission for the previous year show it was forced to dip into reserves to cover a deficit of £962,575.
At the time of the collapse there was speculation of financial irregularities – denied by chief executive Diane Bird. The report makes no mention of foul play and there will be no further investigation into the directors’ conduct by the administrators who plan to wind-up the company.
The charity owes unsecured trade creditors £519,000 and £1m in redundancy payments to the 230 staff who lost their jobs.
The administrators expect to realise £595,000 from the charity’s properties and after paying off secured and preferential creditors expect a surplus of £352,316.
However the report, by administrators from the Liverpool office of accountancy firm Grant Thornton, does not guarantee a payment for unsecured creditors.
