Ray of cautionary hope for some of Beta's creditors

Latest administrator's report indicates that it is 'possible' that the distie's secured and preferential creditors could get some money back

The administrator of Beta Distribution has indicated that some creditors may in fact receive some of their cash back, in the latest report filed on Companies House.

Deloitte, which is handling the administration, said "improved realisations" mean that it may be possible to pay some funds to creditors by way of the Prescribed Part.

The update is an improvement on a bleak outlook earlier in the administration process when it was expected that unsecured creditors, including a number of channel firms, would receive nothing.

The report stated: "Creditors claims have not been adjudicated as there was not expected to be a dividend under the Prescribed Part.

"However, owing to improved realisations we are now considering whether such a distribution may be possible.

"If so, we will commence adjudication of claims."

As unsecured creditors, channel firms and vendors owed money are at the bottom of the waiting list when it comes to repayments, with secured creditors, including Lloyds, first in line to get their cash back.

Deloitte, however, warned that if the Prescribed Part is too small, which is possible, it may prove uneconomical to distribute to creditors. It added that it will review this when all of Beta's assets have been realised.

Under insolvency law, the Prescribed Part is an amount set aside for unsecured creditors from asset realisations that would otherwise be paid to secured creditors under their floating charge.

Secured creditors are also not expected to be repaid in full, with Lloyds alone owed over £28m.

So far, the administrator has recovered £16.4m of Beta's book debt, all of which has been pledged to Lloyds.

The distributor's book debt was valued at £36.4m when Deloitte was appointed, although the firm only expected to recover £25.5m.

Beta distributor went bust in October while its Dutch wing went under two months later as a result of its parent company's woes.

Beta's trade creditors are owed £14m and include the likes of storage vendor Quantum (£2.1m), Brother (£1.2m) and HP (£921,006).

"We anticipate that further recoveries will be made and will provide a further update in our next report," the report stated.

Elsewhere in the report, the administrators said that they have managed to sell £1.1m in Beta's stock that was no longer subject to retention of title claims.