Shocking details of Douglas & Gordon Administration sale revealed
James Evans, D&G CEO, paid £515K to take the business out of administration, it has emerged, with most creditors set to receive nothing.
Douglas & Gordon CEO James Evans (main picture) bought the company for £515,000 from the administrators, through a new enterprise he had set up before D&G entered administration, it has emerged.
A report by administrators Grant Thornton reveals the details of the deal, including creditors being owed more than £633,000; they are unlikely to be paid anything.
Fifty staff from the sales team, which was the majority, were made redundant, and only 15 other company staff are retained, the report says.
D&G’s sales division split from the more profitable lettings business when new owners Foxtons sold it to Evans in January last year.
The independent D&G company went into administration on 24 February, but was purchased by Evans, through his new enterprise Brewham Holdings Ltd less than a week later on 2 March.
Evans registered Brewham Holdings with Companies House on 14 February, 10 days before D&G entered administration.
Heavy losses
The Grant Thornton report describes how Evans had sought new investment in D&G as it made “heavy losses”. It says D&G had tried to re-establish a new lettings business, but was unable to break even.
Six offers were initially received for D&G, with three being seriously considered, before one withdrew, leaving two.
Evans’ offer of £515,000, which was the highest, was accepted by the administrators.
The Grant Thornton report to creditors, published on the Companies House website, says D&G has £349,394 in cash, and 185,000 shares in OnTheMarket, but owes HMRC, a ‘preferential creditor’, £755,259.
A total of £633,266 is owed to 93 other ‘unsecured creditors’, including Foxtons, the Financial Conduct Authority and Zoopla. Grant Thornton also says it has not yet been paid for its services.
The company had a sales pipeline of £1.3 million at the time of the sale. It is closing all of its 12 London offices, and has opened a new one in Manchester.
Foxtons sold the sales operation of D&G to Evans last year just 11 months after it bought the business for £14.25 million.
D&G’s property sales division was loss-making when the deal went through, and it was clear that Foxtons was largely interested in its profitable lettings capability.
Read the Grant Thornton report here
So, like local seaside businesses, they have a bad year, close the company, start again a day later and the people and companies that trusted them and provided them with services and stock now do not get paid, but they can carry on trading regardless.
Really?
Well done on circumventing the system.
I spent 2.5 years in Afghanistan paying off previous ‘failed’ business estate agency debts, so all got paid.
You just close and re-open.
Yep – I am a mug – but at least I repaid my creditors.