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Lenders face losses on Equidebt 8 August 2013

Two banks are facing losses of at least £11.6m following the collapse of debt purchaser Equidebt.

Lloyds TSB and the Co-Operative Bank are facing the losses as the main floating charge holders of the business, which went into administration in June.

Equidebt Limited’s floating charge holders have £34.7m worth of debts secured but the estimated assets they will be able to realise stands at £23.1m, leaving an £11.6m deficit, according to a statement of affairs published by the firm’s directors.

Meanwhile the company’s unsecured creditors will contest assets valued at around £600,000, though the directors estimate unsecured non-preferential claims will stand at £1.4m, leaving a deficit of more than £800,000.

Nick Hood, external affairs director at Company Watch, said: “The failure of Equidebt was no great surprise given its fragile financial position.

“But the good news is that just for once the poor unprotected infantry of the commercial world, the unsecured creditors, including the non-preferential debts owed to the employees seem likely to get a reasonable dividend on their claims, while it’s the secured lenders who stand to take the biggest hit.”

Tomislav Lukic and Simon Allport of Ernst & Young were appointed as joint administrators of Equidebt.

A spokesman for Ernst & Young said the administrators would not want to comment on the statement of affairs.

Meanwhile the Co-operative Bank declined to comment on the story, suggesting any comment should come from the administrators.

Credit Today has approached Lloyds for comment, and will update the story should the bank decide to issue a statement.

By Alex Cardno



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