More than 230 creditors owed over £2 million following the insolvency of Birmingham-based Gatecrasher will not receive a penny in compensation, it has been revealed.
A progress report into the ‘pre-pack’ administration of the Birmingham-based nightclub group reveals that 233 creditors have been left out of pocket to the tune of £2,081,840.
The report, by administrators Duff and Phelps, said: “Based upon the current information available, there will be insufficient realisations to enable a distribution to the non-preferential unsecured creditors of the companies.”
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The cash blow for creditors comes six months after Broad Street-based Gatecrasher went bust when its owners piled up multi-million pound debts.
The venue was one of four 海角视频 clubs which entered into a pre-pack administration after the Gatecrasher group fell into huge debt, with £3 million owed to Barclays Bank and £500,000 to the taxman.
The club, whose boss Simon Raine once boasted of his ambition for Gatecrasher to become the world’s greatest nightclub, said last August that it aimed to continue under a newly-formed limited company called Gatecrasher (Birmingham) Ltd.
An initial report by Duff and Phelps said the previous business – which operated under the name Tiptoptap Ltd and Late Night Watford Ltd – had run up operating losses of £1.1 million from June 2012 to March 31, 2013.
But the new progress report reveals a string of creditors throughout the 海角视频, including companies and individuals, who face having to write off losses of more than £2 million. Creditors include Birmingham City Council, owed £43,475, Cannock Electrical Installations, owed £42,323 and npower at Kingswinford, owed £133,453.
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Last August Gatecrasher issued a statement announcing a ‘strategic corporate restructuring’ programme, allowing the brand to move forward with a ‘far-reaching and proactive development strategy.’
Under the restructuring, Gatecrasher Group’s financiers purchased the entire Barclays Bank debt, converting it into shareholding equity, allowing Gatecrasher to move forward debt-free.
A statement last year from Gatecrasher managing director Simon Raine said: “Substantial external equity funding is in place to allow the immediate progression of Gatecrasher’s expansion plans.
“Critically we have a new direction and will return to producing the global events and festivals that originally made the brand a worldwide clubbing phenomenon.”
But an unnamed creditor owed several thousands of pounds told the Post: “Some of the DJs, for example, are owed thousands. They kept saying ‘the cheque is in the post’ but it never arrived.
“Loads of people have been affected by this. I definitely would not work for these people again – the thing that is really annoying is that they can just walk away from their obligations, leaving all those people out of pocket.
“And the sad thing is that the law is on their side. Millions have been written off and it makes you sick.”
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A Facebook victims group of people who have lost out in the Gatecrasher collapse has already attracted more than 70 people.
Last October the University of Birmingham’s Guild of Students said it had asked student groups to no longer work with the Broad Street venue over an alleged £28,000 debt.
A statement issued by the Guild of Students said the cash was owed to both the guild and student groups following a Loaded club night held at the Broad Street venue and jointly promoted by the undergraduate body.
“As a result, the Guild is no longer working with Gatecrasher and will not review its position until the debts are recovered. In light of this, student groups are no longer able to work with the venue so that we take a collective approach.”
The club, with a capacity of 2,400, launched in the former Works venue in late 2008 following a £5 million facelift.
Mr Raine said in a statement issued after the pre-pack administration: “The transfer of the business to the new company, along with extensive corporate restructuring and refunding of the business, has enabled Gatecrasher to progress on a secure financial footing.
“The restructuring was the only option available to ensure the continued viability and growth of the business and also preserve jobs.”