Park First Administrator is Guilty of Misinforming Creditors

We believe the Park First Administrator is guilty of misinforming creditors. Since the creditor meeting was adjourned on 1st October 2019 the administrator has issued two updates on future dates and plans to investors, both of which are copied in full below. The first, on 9th October 2019 contained the following two statements:

1. Investors and creditors will recall from the Administrators’ Proposals that one of the major options which the administrators will be considering on behalf of the investors and creditors of the Companies is potential CVAs. With regard to these potential CVAs the Administrators’ Proposals say that “the intention is that there will be a substantial initial cash injection, of c.£33m from companies and individuals associated with the Companies, made into the CVAs in order to settle investors’ and creditors’ claims, whether they be Buy Back/LLS” (“Lifetime Lease Scheme”) “or (to the extent applicable and included in the CVAs) trade creditors, with the objective of ensuring that the Companies can support revised proposed financial returns to the LLS members going forward.”
2. The ‘companies and individuals’, as referred to above, offering to introduce the amount of approximately £33m into the potential CVAs have confirmed that these funds will no longer be made available to the investors and creditors of the Companies should the Companies immediately proceed into Creditors’ Voluntary Liquidation, as is proposed in the Proposed Modifications to the Administrators’ Proposals. (These funds are currently held in bank accounts and can only be released with the joint approval of the FCA and the “companies and individuals” referred to above”. It is expected that these funds will be held by the joint administrators, under the same terms as they are currently held, at the date of the adjourned creditors’ meetings.)  

That is a very serious statement for the administrator to make i.e that £33m will be taken out of the creditor’s pot if creditors do not vote to accept the biased and unacceptable terms proposed by the company directors and the Administrator. This naturally resulted in many creditors becoming very worried and concerned that the already pitiful compensation on offer might be reduced even further if the £33m cash pot is withdrawn. The Administrator made it sound that the £33m was entirely at the discretion of the company directors. Some creditors and creditor representatives immediately made contact with the Financial Conduct Authority to check whether this statement was true. It was not true. It would appear to be either an intentional scare tactic to frighten creditors into accepting the proposals, or it is incompetence showing that the Administrator does not actually understand either the investment or his own proposals !

One of the creditor representatives, Mark Hendrick of Quantuma LLP, spoke directly to the FCA. This is his report of the conversation.

“Following the release of the latest circular by the Administrators in which they make reference to the £33m only being available if a CVA is approved, discussions have been held between myself and the FCA who have indicated that the funds should be available to a Liquidator, subject to the Liquidator obtaining the appropriate consent from court. This is contrary to the statement made by the Administrators and is important information that needs to be communicated to investors.

Furthermore, it should be reiterated that a CVA prevents action against the directors by the office holder (the current Administrators) and is a device to return the companies to the directors upon conclusion. Considering that the company directors are seeking to write off £115m without an investigation this is not an attractive proposal for the majority of investors. Should any creditor wish to discuss their rights and actions they can take to protect those rights they can contact me at Quantuma LLP or Lisa at DWS Recovery. The above link gives the contact details for Mark Hendrick.

Safe Or Scam is working with Quantuma and Dow Schofield Watts and their legal advisors to agree a strategy of how to protect the interests of investors given the latest announcements by the Administrators. Full details of the proposed strategy will be circulated in due course. We are urging creditors to contact Mark or Lisa to register their disapproval of the current proposals and to join the growing group of investors supporting an alternative proposal which will include a thorough investigation into the conduct of the company directors and the whereabouts of the missing £115m.

Following the erroneous statement made by the Administrator we were surprised that the next update issued on 11th October 2019 did not contain an apology and clarification of the statement. In fact, it did not contain any form of acknowledgement that they had issued an entirely false statement to creditors two days earlier. This raises concerns as to whether creditors can trust anything that the Administrator sends out, especially as many investors may not see our article and will not be aware that the 9th October update was untrue. This may influence their decision process in favour of the Administrators’ proposals because they may believe that the £33m is still at risk. Perhaps that might explain why there has been no correction from the Administrator. The two updates are copied in full below beginning with the first letter of 9th October 2019.

Administrator Update – 9^th October 2019

Dear Sir / Madam

Re: Park First Freeholds Limited, Park First Glasgow Rentals Limited, Park First Gatwick Rentals Limited, Help Me Park Gatwick Limited (all in administration)
(together the “Companies”)

I am writing further to my email to you of 3 October 2019, copy attached at Appendix 1, with regard to the above named Companies. (Some investors and creditors for whom we do not have email addresses, or who wish to only be communicated with by post, received that communication by post.)
In that email I explained that I was intending to make an application to the English court for directions with regard to various important matters which became evident at the creditors’ meetings of the Companies which took place on 1 October 2019. We intend to make that application tomorrow and I will update you further as soon as I am able to do so with regard to (1) the date to be fixed for the adjourned meetings of the creditors of the Companies and (2) other important matters.
In my communication of 3 October 2019, I explained that the administrators would be making the  application to Court for an extension of the adjournment date to allow the  approximately 4,700 investors and creditors sufficient further time to receive, translate if necessary and consider (including taking legal advice, if they wish to) the further communications from the Administrators and to then, having considered the Administrators’ Proposals and the Proposed Modifications to the Administrators’ Proposals, return, in good time, their votes on both the Administrators’ Proposals and the Proposed Modifications to the Administrators’ Proposals.
Proposed Modifications to the Administrators’ Proposals
A number of creditors have proposed the following Proposed Modifications to the Administrators’ Proposals with regard to all 4 Companies. These Proposed Modifications are identical as regards each of the 4 Companies.

MODIFICATIONS TO THE ADMINISTRATORS’ PROPOSALS DATED 27 AUGUST 2019 

a)  That the Joint Administrators will continue to manage the business, affairs and property of the Company in order to achieve the purpose of the Administration.          
In particular that they:

i.      Deal with any creditor queries, monitor creditor claims received and update their records accordingly;  and

ii.     Perform their statutory duties and do all such things as required by regulation in order to achieve the purpose of the Administration or to protect and preserve the records and assets of the Company

b)  The Joint Administrators shall file at the Registrar of Companies form AM22, Notice to move the Company from Administration to Creditors Voluntary Liquidation by no later than ‘14 days following the creditors’ adjourned meeting of the Company’.(see the Note below)

c)  That Carl S Jackson of Quantuma LLP and Christopher Benjamin Barrett of Dow Schofield & Watts be appointed as Joint Liquidators in the event that the Administration moves to Creditors Voluntary Liquidation or be proposed as Joint Liquidators where a winding up order is made and that during the period of  liquidation, any act required or authorised under any enactment  to  be done  by  the Joint Liquidators may be carried out by both or either of them, or by one or both of the persons for the time being holding that office in succession to them.

(Note. In the Proposed Modifications to the Administrators’ Proposals, ‘15 October 2019’ was mentioned here and this has been amended to ‘14 days following the creditors’ adjourned meeting of the Company’ above. This has been amended in order to keep the timing of this part of the Proposed Modifications workable.)
I circulated copies of these Proposed Modifications to the Administrators’ Proposals as regards each of the 4 Companies at the creditors’ meetings of the Companies which took place on 1 October 2019.
As an administrator of the 4 Companies, and as an officer of the English court who is bound to act in the best interests of the investors and the creditors of the Companies, I am obliged to make the following comments with regard to the Proposed Modifications to the Administrators’ Proposals:

1. The Proposed Modifications to the Administrators’ Proposals call for the administrators, of which I am the lead administrator, to file at the UK Registrar of Companies a notice to move the Companies from administration into Creditors’ Voluntary Liquidation by no later than 14 days following the creditors’ meetings of the Companies and for Carl S Jackson of Quantuma LLP and Christopher Benjamin Barrett of Dow Schofield & Watts to be appointed as joint liquidators of the Companies.

 

1. The above Proposed Modifications to the Administrators’ Proposals will be passed in respect of any of the 4 Companies if a majority of the investors and creditors of any of those 4 Companies, by value of voting, vote in favour of them at the adjourned creditors’ meetings.

 

1. The joint administrators are not in favour of the Proposed Modifications to the Administrators’ Proposals for the reasons explained below:

 

1. The Administrators’ Proposals issued on 27 August 2019 include a number of potential outcomes as regards the 4 administrations, including Company Voluntary Arrangements (“CVAs”), sale of the car parks for the best price attainable and Creditors’ Voluntary Liquidation, to name just three.

 

1. Investors and creditors will recall from the Administrators’ Proposals that one of the major options which the administrators will be considering on behalf of the investors and creditors of the Companies is potential CVAs. With regard to these potential CVAs the Administrators’ Proposals say that “the intention is that there will be a substantial initial cash injection, of c.£33m from companies and individuals associated with the Companies, made into the CVAs in order to settle investors’ and creditors’ claims, whether they be Buy Back/LLS” (“Lifetime Lease Scheme”) “or (to the extent applicable and included in the CVAs) trade creditors, with the objective of ensuring that the Companies can support revised proposed financial returns to the LLS members going forward.”

 

1. The ‘companies and individuals’, as referred to above, offering to introduce the amount of approximately £33m into the potential CVAs have confirmed that these funds will no longer be made available to the investors and creditors of the Companies should the Companies immediately proceed into Creditors’ Voluntary Liquidation, as is proposed in the Proposed Modifications to the Administrators’ Proposals. (These funds are currently held in bank accounts and can only be released with the joint approval of the FCA and the “companies and individuals” referred to above”. It is expected that these funds will be held by the joint administrators, under the same terms as they are currently held, at the date of the adjourned creditors’ meetings.)

 

1. Accordingly, in the best interests of the investors and the creditors, I believe that the best option for them is that the investors and the creditors be allowed to consider their financial position under the proposed CVA terms and to compare that financial outcome with their other likely financial outcomes under the sale of the car parks for the best price available and all other available options, including the Creditors’ Voluntary Liquidations option.

 

1. It is the duty of the joint administrators to calculate the estimated financial outcome of all of the options referred to above and to work with the investors and creditors to choose that one which is in their best financial interests. The joint administrators indicated at the meetings of creditors held on 1 October 2019 that they would be in a position to complete this financial analysis within 6 to 8 weeks following the resolution of the position with regard to the Administrators’ Proposals and the Proposed Modifications to the Administrators’ Proposals. On that basis, the joint administrators believe that they will be in a position to report on their conclusions with regard to the estimated financial outcome of all of the available options within that 6 to 8 week timeframe.

 

1. On the basis of the above analysis, I have concluded that it is in the best interests of the investors and creditors that the Administrators’ Proposals are approved such that the investors and creditors can consider the estimated financial outcome to them from all of the potential options available under the Administrators’ Proposals, of which a Creditors’ Voluntary Liquidation option is only one. Most importantly, I believe it is imperative that the investors and creditors have an opportunity to hear the CVA option as that option, if acceptable to the investors and the creditors, brings with it an approximately £33m contribution into the proposed CVAs, a contribution which will not be available should the Proposed Modifications to the Administrators’ Proposals be voted in favour of by the majority, in value, of the investors and creditors. Should it later transpire, having considered all of the possible options, that  Creditors’ Voluntary Liquidations are  the appropriate option, this option has already been provided for under section 10(v) of the Administrators’ Proposals.

Conclusion
Once I have made the application to Court, I will write to investors and creditors with further information. Investors and creditors do not need to do anything further with regard to the adjourned meetings of the creditors of the Companies until they receive my further communication.

Yours faithfully
For and on behalf of the Companies

Finbarr O’Connell
Joint Administrator of the Companies

 

Administrator Update – 11^th October 2019

Dear Sir / Madam

Re: Park First Freeholds Limited, Park First Glasgow Rentals Limited, Park First Gatwick Rentals Limited, Help Me Park Gatwick Limited (all in administration)
(together the “Companies”)

In my letters of 3 and 9 October 2019, I explained that the administrators would be applying to Court for (a) an extension of time for the adjourned meetings of investors and creditors and (b) directions in respect of certain matters.

The purpose of this letter is to inform you that the Court has agreed to the administrators’ request for an extension of time for the adjourned meetings of investors and creditors. Accordingly, the meetings of investors and creditors will now take place at 14:00 on Monday 25 November 2019 at City Temple Conference Centre, Holborn Viaduct, London EC1A 2DE, which was the venue for the creditors’ meetings on 1 October 2019.

The further Court hearing with regard to the application for directions will take place on Monday 4 November 2019. At this hearing, the administrators will seek:

a. Directions concerning the admission of investors’ and creditors’ claims for voting purposes in connection with the decisions required as to the approval of the Joint Administrators’ proposals and proposed modifications to those proposals; and

b. Directions in relation to the particulars to be provided to any party with regard to individual investors and creditors of the Companies (including their names and addresses) in connection with the Administrators’ proposals and the proposed modifications to the Administrators’ proposals. (In this regard, please note that there have been requests to the administrators for the release of this information and also requests to the administrators from investors and creditors asking them not to release this information. Accordingly, the administrators are very concerned not to release this information without a Court direction or order.)

Given that we are seeking directions from the Court which will impact on how claims will be admitted for voting purposes, only once the outcome of the Directions hearing is known will the Administrators circulate further information to investors and creditors regarding the submission of claims and how claims will be admitted for voting purposes with regard to the Administrators’ proposals and the proposed modifications to the Administrators’ proposals.

We will update you further following the directions hearing.

Yours faithfully
For and on behalf of the Companies

Finbarr O’Connell
Joint Administrator of the Companies

To view our previous article on Park First click here.