Fundraising firm CSDM Incentive asked to stop using its lists of donors

Administrators query whether databases were bought at true value

Chris Stoddard
Chris Stoddard

A firm of insolvency practitioners has asked the head of a fundraising company not to make use of its lists of donors until an investigation into the true value of the lists has been completed.

CSDM Incentive, run by the businessman Chris Stoddard, bought the lists from another of Stoddard's companies, the direct mail specialist CSDM, in January 2009. It paid £100,000 for them, according to documents seen by Third Sector.

In June this year, CSDM was put into voluntary administration by Stoddard and its main assets and contracts with charities bought by CSDM Fundraising Directors and CSDM Strategic Fundraising, two new companies run by him.

He said at the time he expected that money owed to creditors of CSDM, since revealed to be £1.4 m, would be paid in full

Rimes and Co, the insolvency practitioners appointed to administer the affairs of CSDM, has decided on the basis of information provided by creditors that it wants to investigate whether the assets of CSDM were sold at their true value.

It has asked Stoddard to provide documentation on the sale of the donor lists to CSDM Incentive, including details of how the board of CSDM arrived at the valuation of £100,000 and satisfied itself that this was a fair market value.

It has also asked him for an undertaking on behalf of CSDM Incentive that none of the donor lists will be used while the investigation continues, and has told him that it has sought legal advice on obtaining a court injunction if the undertaking is not given.

It has also asked for evidence of the revenue received by CSDM in the three months following the sale of the lists to CSDM Incentive in the early part of 2009.

Representatives of Rimes and Co met Stoddard to discuss their various requests last Friday. They declined today to say what the outcome of the meeting was.

If Stoddard complies with the request not to use the lists, it appears likely that direct mail activities for client charities of his new companies could be curtailed, given that they are likely to be relying on the lists owned by CSDM Incentive.

Stoddard declined to comment when contacted by Third Sector.

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