Liquidation of the former Western Greyhound business has finally been completed by insolvency practice Portland Business Recovery, six and a half years after the Newquay-based operator entered administration.
The process has seen all secured, preferential and unsecured creditors receive a return in what Portland Director Steve Godwin says represents a positive outcome for those parties.
Western Greyhound ceased trading in March 2015 after it encountered a series of problems, including two depot fires and issues relating to difficulties in obtaining insurance cover. Both fires were suggested to have been arson, with the first – in May 2013 – destroying 35 buses.
Portland was appointed administrator, becoming joint liquidator in February 2016 after the business’s administration was converted to a creditors’ voluntary liquidation to enable returns from the disposal of the Western Greyhound assets to be distributed to creditors.
While the sale of Western Greyhound’s assets was straightforward, “the agreement of the claims proved more problematic,” Portland adds.
The insolvency practice took steps to sell the freehold offices and yard together with the fleet and other assets. Portland also assisted employees that had been made redundant without notice to make claims for arrears of pay, holiday pay, redundancy and pay in lieu of notice. Those claims were met via the National Insurance Fund.
Additionally, the sudden closure also subsequently gave rise to “a significant number of former employees making Employment Tribunal claims as a result of the company not being able to fully consult with the over redundancy,” Portland says.
“That gave rise to protracted legal action to determine the level of claims with the Employment Tribunal, which were eventually agreed at approximately £200,000.” In March 2015, the BBC reported that 158 Western Greyhound staff were affected by the administration.
Lengthy negotiations took place with the secured creditor regarding the settlement to be paid to it from the sale of the freehold. Portland adds that it “successfully agreed a substantially reduced settlement, which enhanced the amount of funds then available for preferential and unsecured creditors in the liquidation.”
Adds Mr Godwin: “Although the case has taken longer to complete than we anticipated at the outset, the outcome is a positive one in that the secured, preferential and unsecured creditors have all received a return in the liquidation.
“In addition, the former employees have been compensated for the sudden and unexpected termination of their employment. This is a case where the company had no realistic opportunity to consult with staff as required by statute, and is a classic example of where insolvency litigation and employment law do not always sit comfortably alongside each other.”