New blow for FQR creditors

18 February, 2011

First Quench administrator KPMG has revised downwards the estimated dividend that will be go to unpaid creditors.?The accountancy firm – which has extended the period of administration until the end of April 2012 – said in its latest report to creditors that the estimated dividend was now 0.94p in the pound, down from the 1.45p in the pound it had originally

estimated in late 2009.?The revision would amount to a variation of £5,000 in the amount to be received by?a creditor owed £1 million. The revised?figure is based on an increase in estimated unsecured liabilities identified by KPMG, from £34.6 million to £64 million.?But the final administration pot could be boosted if KPMG manages to secure a satisfactory outcome to outstanding claims around the First Quench pension fund.?The fund is claiming £40 million as a creditor of the collapsed company and there is a further £37 million held in an escrow account for a scheme rescue which had not been completed at the time the business failed.?KPMG believes it has a claim to all or part of these sums, which would increase the amount available to pay off unsecured creditors.?Joint administrator Ian Corfield said: “It’s a highly technical matter that’s being dealt with by specialist advisers and lawyers.”?Corfield added that KPMG was still

pursuing remaining book debts owed to First Quench at the time of its collapse.?“We’re talking hundreds of thousands rather than millions,” he said, adding that the process was expected to still take “months rather than weeks”. Recovered book debts to date top £3.5 million.?The report to creditors also reveals that KPMG has reached a full and final settlement with First Quench’s distribution supplier NDL.?NDL realised £6 million from the disposal of First Quench stock held under lien in its warehouses and has paid £1.5 million into the administration estate.?The report – covering the period to the end of October, 2010 – shows KPMG had received £11.3 million in fees.?Law firm Lovells received fees just short of £2.5 million and Christie & Co, the property agent charged with selling off individual surplus stores, £364,000.?Corfield said “two or three” former First Quench staff were still employed in helping the administrator with property and accounting matters.




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