Cash flow from H20 to Total Asset’s lenders unlikely, says report
THE administrators of collapsed Warrington lender Total Asset Finance have said they have submitted a report to the Insolvency Service last month after making enquiries into the conduct of director Steve Dartnell.
A newly-filed document by joint administrators Dan Butters, Neville Khan and Angus Martin from the Leeds office of Deloitte, states that they have “undertaken detailed forensic investigations into the source and application of funds by TAL in the five years prior to their appointment in January.
“This has highlighted a number of potential righs of action which the Joint Administrators will evaluate and pursue,” the report said. “These may lead to further recoveries for TAL’s creditors.”
It added that it has conducted an investigation into the conduct of the company’s sole director (Mr Dartnell), which was submitted to the Insolvency Service last month.
“The contents of this report are confidential and cannot be disclosed to the creditors of the company,” it said.
Total Asset Ltd (TAL), which traded as Total Asset Finance, was placed into administration in January this year after its former funder, KBC Lease UK, called in the Serious Fraud Office over concerns into contracts between Total Asset and Warrington-based H2O Networks (H2O), which installs broadband cables via the sewer network.
TAL owed more than £133m to KBC – £91m of which had been loaned to H20.
H20 has since been sold by former owner i3 Group and was then forced to undergo a pre-packaged administration deal. The latest report suggests that £64.7m was due from H2O, but only £4.7m is likely to come from its new parent company, Cityfibre Holdings. A 5% equity stake has also been taken in Cityfibre Holdings.
Other realisation set to be achieved include an offer for the company’s former HQ, which is currently on the market for £850,000. A house in Ormskirk has also been placed on the market initially at £210,000, but has since been reduced to £190,000.
Joint administrators are also pursuing an £11m inter-company balance owed by Daresbury Service Group – a parent company to TAL which was set up last year when the business acquired Irish software firm IMS.
Newly-filed accounts for Daresbury Service Group (DSG) state that the money loaned from TAL was due to be paid back out of trading profits via ten annual instalments of £173,300.
Administrators state there is no evidence of an initial instalment being paid and have instigated a winding-up petition against DSG, which is still owned by Dartnell. DSG’s accounts state that the petition “is being disputed and being contested”.
Deloitte’s own fees for the first six months of its appointment from January had reached £1.2m, of which just over £1m has already been drawn down.
More than £408,000 of other fees have been recorded – the bulk of which have gone to “Magic Circle” law firm Linklaters.
The report states that administrators at Deloitte had racked up almost 3,000 hours working on the case at an average charge-out rate of £419.31 per hour. No-one from Deloitte was available for comment.
