Cattles, the doorstep lender that has written no new business since its shares were suspended 18 months ago, was planning to rename itself Money Utopia Bank in an effort to attract retail depositors, it has emerged.
The new name was understood to be the idea of the group's former chief executive David Postings, which a source close to the company at the time described as "ill-judged".
Senior figures at the group thought that the name would attract customers disgruntled by the banking crisis, as the public backlash against the bankers continued to intensify. Management was preparing to adopt the new name in the event that Cattles was awarded a banking licence by the Financial Services Authority (FSA) at the end of 2008.
It was keen to apply for a licence to take retail deposits after a previous source of income, the wholesale debt markets, dried up in the wake of the collapse of US investment bank Lehman Brothers.
The company had previously described a successful application as "crucial". Yet the FSA rejected the application, and Cattles virtually collapsed, with its shares suspended in April last year after it failed to publish its 2008 results.
Mr Postings, along with most of the company's management, left the group in July 2009, when six former directors were sacked. The previous finance director, James Corr, and five others were suspended after the City law firm Freshfields Bruckhaus Deringer was asked to investigate irregularities at its Welcome lending business.
The value of the group's loan book is now practically worthless, with the creditors expecting to wind the business down in the next two or three years when the few performing loans have been repaid.
At the group's AGM earlier this month, discussions were held between creditors and former shareholders about recovering some money for equity holders.
Any settlement that arises is likely to see former shareholders left considerably out of pocket, however. Cattles' main creditor at the time of its demise last year was Royal Bank of Scotland.
Sources close to the company last week said that its main doorstep lending business, Shopacheck, and its Lewis Group debt collection unit were still trading profitably.
No decision has been taken on what will happen to the two businesses, but they are likely to be put up for sale to help raise money for creditors.Reuse content