No returns from Corporate debts

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UNSECURED creditors of Corporate Communications, the public relations group that collapsed in July, have been told they will not receive a penny as the group's debts exceeded its realisable value by pounds 15.6m.

In a letter to creditors, the group's receivers, Ian Bond, Chris Hughes and R Graham, of Cork Gully, said the group had debts of more than pounds 21m but that the sale of the group's four main operation subsidiaries recouped just pounds 4.16m for creditors.

This means the only creditor to see a return will be Bank of Scotland, which backed the management buyouts of three of Corporate Communications' businesses, Charles Barker and Charles Barker Georgeson in the UK and Georgeson Inc in the US. The bank had a debenture worth pounds 6.64m, and will see a return of around 65p in the pound.

The deals to sell the businesses to their managements were concluded within hours of the group calling in the receivers on 30 July. The appointment of receivers came a week after Bank of Scotland told the group that it could no longer support it.

Cork Gully said in the letter that it could not sell the businesses to parties other than the management because marketing would destroy their goodwill. However, the letter adds that the goodwill of the businesses sold amounted to only pounds 65,002.

Charles Barker, the corporate public relations side, was sold to a team led by Angela Heylin, the group's managing director, for pounds 107,002, of which pounds 60,000 was for goodwill and pounds 2 for the customer lists. The advertising side was sold to Citygate for pounds 3,027, of which just pounds 2 was for goodwill.

Charles Barker Georgeson was sold to a team led by Tony Canning, the founder of Corporate Communications, for pounds 43,866, of which pounds 5,000 was for goodwill. Georgeson Inc was sold to a team led by Mr Canning for pounds 4m plus a possible further pounds 1.8m, none of which was said to be for goodwill.