Beta administrators downbeat on prospect of creditor returns

One director of failed distie agreed to discharge his debts of over £400,000

Beta's administrators have given an update on their activities 13 months after the distributor went bust, reiterating that it is unlikely unsecured creditors will be paid a penny.

The updated administrators report from Deloitte, also revealed that one of the distributor's directors agreed to discharge his debts for over £400,000 and another has undertaken an Individual Voluntary Arrangement (IVA).

"We have investigated a number of matters and claims against third parties. These investigations have now concluded," reads the report on Companies House.

"Following an assessment of options and the individual's financial position, we have reached a settlement agreement with one of PLC's directors to discharge his debts for approximately £443K.

"A second director has entered into an IVA in which the companies have significant claims and will benefit from any asset realisations in the IVA. At present the outcome of the IVA is uncertain."

Beta Distribution went bust in October 2018 with £36m debt owed to creditors, while its Dutch operation shuttered earlier this year as a direct result of its parent company's woes.

Secured creditor Lloyds has been given the lion's share of all the repaid debt, receiving £24.4m out of the £28m it was owed by the distie.

Deloitte repeated its findings from its previous report that secured creditors might receive some cash back under the Prescribed Part, which is a sum put aside for unsecured creditors from asset realisations that would otherwise be paid to secured creditors under their floating charge.

"Creditor claims have not yet been adjudicated pending clarity being obtained on the level of realisations and the likelihood of dividend under the Prescribed Part being available," Deloitte stated.

"Owing to improved realisations we are now considering whether such a distribution may be possible. If so we will commence adjudication of claims."

However, unsecured trade creditors, who are owed over £14m are unlikely to see any money back.

In September, Deloitte requested an extension to the administration period until 14 October 2020 and anticipated no further extension to be required.

The administrators recommended dissolution as the "most appropriate exit" method from administration "because there will be no funds to distribute to unsecured creditors of either of the companies."