The Pell & Bales investor who said the now defunct telephone fundraising agency was "forced by creditors" into liquidation has admitted that a firm he runs was one of the creditors of the company.
Gerry Hoare confirmed to Third Sector that DealBureau, a firm of which he is director, is a creditor of Pell & Bales, which ceased trading last week just two months after Hoare led a team of investors in buying the company from the outsourcing firm Parseq.
It is understood that he says the company’s other creditors are forcing the company into liquidation. Staff sources, however, say they were told by the insolvency firm Moorfields Corporate Recovery last week that Hoare had been in touch himself to highlight that Pell & Bales owed his company money.
Following Hoare’s contact, Moorfields sent letters last week to the company’s creditors saying they wished to move to a creditors voluntary liquidation.
The company has ceased trading and a meeting will be held on 7 September at which the creditors are expected to vote for liquidation and appoint a liquidator because the company can no longer meet its financial commitments.
According to two sources close to the situation, Robert McIlroy, an insolvency practitioner, and Damian Joseph, a senior manager at Moorfields, told a group of at least 15 employees last week that DealBureau, which specialises in assisting companies in raising debt, was a "secured creditor" of Pell & Bales.
DealBureau’s loan is understood to have been used to pay staff salaries amounting to about £300,000 for the past two months. "He is basically going to use the status of secured creditor to get this money back", a source told Third Sector.
Companies House records show that Hoare placed a debenture over Pell & Bales on 16 June, placing a "fixed and floating charge" over the company.
When a company goes into liquidation, the insolvency practitioners and secured creditors get paid first. After that, "preferential creditors", who are typically employees, get their share, and if there is any money left after this, unsecured creditors such as HMRC and any customers will get paid.
Hoare said after the company ceased trading that there would be no point in buying a company simply to put it into liquidation soon after.
Hoare, who refused to name the company’s other creditors or say how much debt it had, told Third Sector that when he invested in Pell & Bales he had been assured by Parseq that the business was strong enough to survive.
He said the company’s revenues turned out to be considerably lower than expected.
Insiders point out that Hoare was until recently a partner at Parabellum, the investment firm that created Parseq in 2010. But a spokeswoman for Hoare said he was only a consultant and did little work for the firm over the past six years.
A staff source, who asked not to be named, said Pell & Bales was put on the market at the start of 2015 but Parseq struggled to find a buyer due to the company’s liabilities.
Another former employee told Third Sector: "Pell & Bales has been going bust for months. Before Christmas the company downsized by two-thirds in staff and office space. The work dried up in June."
Hoare has also come under criticism from former employees for appointing Scott Priestnall, who has no prior experience of the charity sector, as the sole director of Pell & Bales and its sister brand Pure in June.
But Hoare told Third Sector he did not view this as an issue because Priestnall has worked in agencies in other sectors, such as the advertising agency Create Advertising.