Shepherd Cox Director IVAs Withdrawn

Shepherd Cox Director IVAs Withdrawn.

Last week the meeting to seek approval from creditors for the Individual Voluntary Arrangements proposed by Lee Bramzell and Nick Carlile was rescheduled to this week.  This week’s meeting has now been cancelled due to the IVAs being withdrawn.  It was clear that the IVAs, as proposed, had failed to gain the support of creditors so the Trustees were not prepared to present them to the court.  Had the proposals been supported by 75% of creditors the bankruptcy petitions currently filed against both men would have been dismissed.  As it stands, the bankruptcy petitions are still in place and are proceeding through the courts.

We have had communications from creditors who have confirmed that the IVA Proposals were unacceptable to them for the reasons we outlined in this earlier article.  They also did not like the fact that the proposals were notified to them on Christmas Eve just before the long Christmas and New Year break thereby reducing the time they had available to consult with their legal advisers.

Not only were the IVA Proposals inadequate in that both Mr Bramzell and Mr Carlile were proposing to retain the bulk of their assets on questionable grounds, but the background explanations of how they came to be in the position of owing £15m and £19.5m respectively to creditors were deficient.  There were important omissions relating to the sale of hotel rooms and their past performances in the hospitality industry.  These are important because creditors were being asked to believe they had the capability to turn their new “son of Shepherd Cox” hotel brand, Festival Hotels Group Ltd, into a highly profitable venture.  If successful, creditors would be issued with 50% of the shares held by Lee Bramzell and Nick Carlile.  The other 50% would be retained by the debtors.  Not a particularly attractive deal for creditors – they receive 50% of the shares which would leave them nursing losses of more than 70% of their money, whilst the people who caused their losses keep shares which, if handed over to creditors, could have been used to reduce those losses.  That hardly seems fair.

The bottom line is that their past performance in the hospitality industry is particularly shocking.  It’s not one that anyone could be proud of so it is unlikely the shares would be worth anything after five years in any case.  There was no creditor protection against a staged ‘pre-pack’ which would leave them with nothing.

If revised IVA proposals are not submitted then the bankruptcy petitions will proceed.  We expect revised IVA Proposals to be produced in an effort to get creditors onboard and stave off personal bankruptcies.  People who paid £16m for hotel rooms in the Shepherd Cox scam have been ignored in the IVA Proposals.

Shepherd Cox Director IVAs Withdrawn.