The 100-plus staff formerly employed by the now defunct telephone fundraising agency Pell & Bales will receive a fraction of the more than £400,000 owed to them by the company, according to details obtained by Third Sector.
Simon Thomas, a partner at the insolvency firm Moorfields Corporate Advisory, told Third Sector that £419,000 was owed in total to former employees for redundancy, pay in lieu of notice and wage arrears and that a further £163,000 was owed to the company’s former suppliers.
But he said that less than £25,000 would be paid out to employees after Moorfields’ costs were met because of a deficiency of assets to liabilities. He added that the company’s "dividend prospects look poor".
DealBureau, the company owned by Gerry Hoare, the main investor in the purchase of Pell & Bales in June, two months before it ceased trading, will recover £224,000 from the company – the lion’s share of the estimated £261,000 it is likely to have available to pay its creditors.
This is because DealBureau became a secured creditor of the company on 16 June, when Hoare placed a debenture over the agency. When a company goes into liquidation, the insolvency practitioners and secured creditors get paid first.
He said the agency officially went into liquidation yesterday after the company’s two shareholders, Panther Financial Management and Pure, appointed Moorfields as liquidator. The appointment was later confirmed at a meeting of the company’s creditors, which was attended by about 25 former employees and Scott Priestnall, who was appointed director of Pell & Bales and its sister company Pure in June.
A source who attended the meeting told Third Sector that Priestnall faced questions about why the company had been bought from its previous owner, the outsourcing firm Parseq, for just £3.
The source described the atmosphere at the meeting as angry and emotional and said a group of three former employees had decided to form a creditors committee, which will investigate whether any wrongdoing took place in the manner in which the agency was purchased.
The ex-staff members are concerned about Hoare’s links to Parseq – he previously worked for Parabellum, the investment firm that created Parseq in 2010 – and the speed with which the company went bust after being bought.
Hoare has previously denied buying Pell & Bales purely to put it into liquidation and said the company’s revenues were not as expected.
The agency’s assets consist mainly of "book debts" – money owed to the company for services supplied – worth £336,000, but Thomas said only about £252,000 of this was likely to be recovered. It had less than £2,000 in cash in the bank, as well as furniture and equipment that were expected to fetch about £5,000 once sold, he said.
"The company’s software, which had a book value of £141,000, is believed to be valueless," Thomas added.
A list of creditors obtained by Third Sector shows that Parseq and the Institute of Fundraising were among the organisations owed money.
A spokeswoman for the British Red Cross said the charity had been running one campaign with Pell & Bales when the latter closed. Asked what arrangements it was making to replace the agency, she said the charity was assessing its options.
Kathryn Toner, head of individual giving at CRUK, which also worked with Pell & Bales, said the charity had been looking into how it could minimise the impact of the closure on its fundraising activity and supporters.
She confirmed that CRUK was still a client of Pure, which was also acquired from Parseq by Hoare in June.