The BeatBullying Group went into voluntary liquidation owing in the region of £1m, according to the initial estimates for a creditors meeting today.
Documents compiled for the meeting show that there are 193 creditors, believed to be owed £989,000 between them. But the final figure could be far higher because the amounts owed are yet to be confirmed.
ITV, which donated just over £850,000 to the charity from its Text Santa appeal in 2013, is listed as a creditor, but without any figure against its name. Representatives of the broadcaster who attended the meeting today said that they were trying to determine whether the donation was spent in accordance with its restrictions and might seek repayment of the money.
The largest creditor listed is HM Revenue & Customs, which is owed more than £303,000. The Paul Hamlyn Foundation is the next largest, listed as owed more than £190,000.
Other creditors include Haymarket Business Media, the owner of Third Sector magazine.
During the meeting today, the trustees revealed the circumstances that led to the charity’s closure. They said in a statement that a lack of funding became acute in 2013, which led it to reduce staffing levels and seek additional funding and loans.
The group went into 2014 with £2.3m already secured and was working on funding applications worth more than £5m. But bids to the Department of Health and the European Commission for major grants both failed.
In a statement, the trustees said: "In June, despite positive expectations, the DoH funds were not awarded – this was worth £1.2m over three years. In July, the second-round bid for European Commission funds was also unsuccessful (despite scoring 85 per cent on the funding application, where 86 per cent won the funding). The European Commission funding was valued at £1.1m over two years."
The failure of these bids led the trustees to agree in July to further redundancies and the merger of the BeatBullying and MindFull services to save £430,000, the trustees said. In August, they said, cash flow became "critical". This led the charity to seek a buyer in October, but those attempts failed and it was placed into voluntary liquidation in November.
A number of creditors who attended the meeting disputed aspects of the statement by the trustees and questioned whether the charity had acted properly towards them. One creditor said it had not been paid in August but was given assurances that it would receive the money owed and therefore continued to provide staff for two more months. They wondered if this was potentially a case of "wrongful trading".
Stephen Evans of Antony Batty & Company, which is carrying out the liquidation, said that as part of the process it would investigate whether any offences had taken place.
It also emerged during the meeting that BeatBullying’s support websites were taken down without any notice at about 11pm on 15 October and that some counsellors were working with young people online at that time.
Karl Wilding, a trustee of the BeatBullying Group, told the meeting: "At the point we knew we had a serious financial problem, we made an immediate decision to take down the service. We took it down as a safeguarding issue."
He said it was considered a safeguarding issue because the charity could no longer guarantee young people a safe level of service. Wilding added: "I don’t want to make excuses. We were trying to make decisions in a short amount of time. As trustees, we have no interest in harming users."