Liquidators of Vertu, the manufacturer of luxury mobiles, have recovered enough funds to pay the majority of employees’ preferential creditor claims – and replenish a large part of a £500,000 hole in their pensions.
Adam Harris and Kevin Goldfarb of the insolvency practice Griffins were last month appointed joint liquidators of Vertu, which sold luxury phones retailing at up to £145,000 each to the super rich.
After a period in which Vertu’s sales plunged and debts spiralled, talks began for a pre-pack administration to save the business. After the negotiations broke down, Harris and Goldfarb were appointed on July 12.
Since their appointment the liquidators have been looking to maximise the value of Vertu’s assets to recover debts for creditors.
Among the creditors owed the biggest amounts were the 178 staff, who were left with £460,000 in unpaid wages at the time Vertu entered liquidation. Vertu also had a £519,000 deficit in its pension fund contributions and the company collapsed with total debts of around £40m.
The liquidators however raised more than £1.5m in cash during August by selling the company’s assets through an auction with Kent-based GJ Wisdom & Co.
Harris, a partner at Griffins, said: “The successful auction of the company’s assets raised in excess of £1.5m which not only ensures that a significant proportion of the former employees’ preferential claims can be satisfied but also reimburses the National Insurance Fund to the extent that it has covered these liabilities.”
The National Insurance Fund pays out to staff who claim for unpaid wages and other related liabilities when their employer enters insolvency and in the case of Vertu, is set to be reimbursed by the liquidators. Now the liquidators will look into the conduct of the former owners and directors.
Harris added: “We shall now continue our investigation into the reasons behind the demise of the company.”
Since taking over the company’s affairs, the liquidators have discovered that staff pension contributions were deducted from salaries but not paid over to the pension providers since March this year.
Before liquidation, the company was under the control of Turkish tycoon Hakan Murat Uzan.
Uzan acquired the company from Hong Kong-based Godin Holdings, which had previously acquired Vertu in 2015, from the private equity group EQT.
Vertu’s range of high-end handsets were made with alligator skin, sapphire crystal screens and ruby touch keys. Prices for the mobiles ranged from £11,000 to its premium model; the Signature Clous de Paris Red Gold, which featured 18 carat red gold along with black sapphire keys, and a £39,100 price tag.
The most expensive Vertu phone was sold for around £300,000 to a Chinese buyer.