TRADERS owed hundreds of thousands of pounds by a north Northumberland trust which went bust in September may not get all their money back, the Gazette can reveal.
A statement of administrator’s proposals, filed with Companies House on October 10, shows the true extent of Alnwick Community Development Trust’s debts, which amount to around £938,000.
Secured creditors – who have a legal claim on property owned by the trust – include Northumberland Estates, which is owed £100,000, Lloyds TSB, which is seeking £115,000, and Dutch bank Triodos, which provided a mortgage of £400,000 and an overdraft totalling just under £100,000, which is now in default.
To fully repay them, the administrators are looking to sell off the trust’s flagship youth hostel at Green Batt, which has an estimated value of £500,000, and three flats at Clive Gardens, with a combined value of £255,000.
But almost a quarter of the total liabilities incurred by the trust – estimated at just over £223,000 – is owed to unsecured creditors, including traders who have done business with the charity.
And what’s left over from the sale of assets, together with money in trust accounts, may not be enough to fully reimburse them.
The papers list the estimated assets available to unsecured creditors at £167,932 – around 70 per cent of what is owed.
But one trader, who asked not to be named, said: “Following on from the creditors’ meeting and having taken financial advice, we understand that due to the high level of debt involved we are unlikely to receive any of the monies owed to us by the trust.
“If this is indeed the case, then the livelihoods of all the creditors and their employees have been put at risk by the actions of the trust’s executive.”
The report, drawn up by administrators Tait Walker, states: “We are hopeful that the residential property disposals will provide payment in full to the secured creditors. Preferential creditors, in respect of the three employees made redundant on September 21, should receive payment in full.”
But the report adds: “On the basis of current information, it is likely that realisations will be sufficient to pay the unsecured creditors a dividend, although we are not yet able to ascertain with any certainty the level of dividend.”
The papers show the trust received a VAT refund of just under £92,500 before the administrators were appointed, while its bank balance at HSBC was listed at £28,134.
That will also be used towards meeting its liabilities.
County councillor for Alnwick, Gordon Castle, who has just resigned as one of the trust’s directors, said the administrators were working to secure as much from its assets as possible.
“We do not know what the outcome will be, as the insolvency practitioners have not yet completed their work,” he said. “There is a risk that the unsecured creditors will not get all the money they are owed.The job of the administrator is to secure as much as they can for all the creditors involved and in my dealings with them, they have been extremely efficient and are doing their very best for all concerned.
“I appreciate, however, that if they can’t meet all the liabilities, some creditors may be affected, which would be very unfortunate.”
No one at Tait Walker was available for comment.
The Gazette has been told that remaining trustees are prevented from commenting for legal reasons.