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Cash On Go Limited (in

administration)

Joint administrators' Report and Statement of Proposals pursuant

to Paragraph 49 of Schedule B1 Insolvency Act 1986

24 April 2020

Cash On Go Limited (in administration)

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Contents 1. Glossary 3

2. Introduction 4

3. Key points 4

4. Background to the administration 5

5. Purpose of administration and strategy 6

6. Joint administrators’ receipts and payments 7

7. Conduct of the administration 7

8. Financial position at the date of administration 9

9. Estimated outcome for creditors 10

10. Proposals for achieving the purpose of administration 11

11. Exit route from administration 12

12. Other matters relating to the conduct of the administration 13

13. Pre-administration costs and expenses 13

14. Joint administrators’ remuneration 14

15. Administration expenses 16

16. Creditors’ decisions 17

17. Privacy and data protection 17

18. Next report and creditors’ rights 18


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Appendices I Statutory information 20

II Prior professional relationship 21

III Receipts and payments account 22

IV Director’s Statement of Affairs as at 5 March 2020 25

V Time analysis for the pre-appointment period 34

VI Time analysis for the period 35

VII Fees and costs estimate 38

VIII Staffing, charging, subcontractor and adviser policies and charge out rates 41


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1. Glossary Administrators Adam Henry Stephens, Henry Anthony Shinners and Gilbert John Lemon

Avole Avole Holding AS

CVA Company Voluntary Arrangement

CVL Creditors’ Voluntary Liquidation

ETR Estimated to realise

EUIF Estonian Unemployment Insurance Fund is the Estonian equivalent of the RPS

FCA Financial Conduct Authority

FOS Financial Ombudsman Scheme

HMRC HM Revenue & Customs

Hilco Hilco Appraisal Limited t/a Hilco Valuation Services

IA86 Insolvency Act 1986, as amended

If preceded by S this denotes a section number

IR16 Insolvency (England and Wales) Rules 2016, as amended

If preceded by R this denotes a rule number

Mintos Mintos Marketplace

Pinsent Masons Pinsent Masons LLP – legal advisors

QFCH Qualifying Floating Charge Holder – a secured creditor who has the power to appoint an administrator, in this case Avole

RPS Redundancy Payments Service

Sch B1 Schedule B1 to the Insolvency Act 1986

If preceded by P this denotes a paragraph number

SIP Statement of Insolvency Practice (England & Wales)

SOA Statement of Affairs

S&W Smith & Williamson LLP

S&WEBC Smith & Williamson Employee Benefits Consultancy, a division of Smith & Williamson Financial Services Limited

S&WFS Smith & Williamson Financial Services Limited

The Company Cash On Go Limited


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2. Introduction We, Adam Henry Stephens, Henry Anthony Shinners of Smith & Williamson LLP, 25 Moorgate, London, EC2R

6AY and Gilbert John Lemonof Smith & Williamson LLP, Portwall Place, Portwall Lane, Bristol, BS1 6NA and

licensed insolvency practitioners, were appointed administrators of the Company on 5 March 2020

This report sets out our proposals in respect of the administration of the Company.

Appendix I contains information in respect of the Company and the administrators that is required under

the IR16.

We will deliver these proposals to the creditors on 28 April 2020.

3. Key points • We were appointed administrators of the Company on 5 March 2020 by the Company’s director, with

the consent of the QFCH.

• The objective of the administration is as in P3(1)(b) Sch B1, namely achieving a better result for the

Company's creditors as a whole than would be likely if the Company were wound up (without first

being in administration).

• COG traded as a high cost short term lender (also known as a pay day lender), lending cash to UK

customers on a short-term basis. It conducted lending via two websites – peachy.co.uk, and

uploan.co.uk.

• We are working with the Company’s staff to wind down the affairs of the business in an orderly fashion.

Specifically, we are seeking to maximise recoveries from the Company’s loan book.

• The main asset of COG is its outstanding loan book. Since our appointment we have realised c.£1.5m

in loan repayments. We are also working with specialist agents with a view to selling part or whole of

the business or book.

• Given that the Company is winding down, the size of the work force has, regrettably, been reduced

since our appointment by 8 staff, with 41 remaining.

• Avole Holding AS (“Avole”) has a valid floating charge registered against the Company. Avole acts as

a security agent whereby it will distribute any monies it receives in accordance with its security

documentation. The order of priority of parties entitled to receive funds from Avole are: 1) Mintos 2)

Bond holders.

– 1) Mintos is an investment platform which allows its customers to invest in different loans. COG

used the Mintos platform for short-term financing. Mintos investors could choose to invest in

specific loans COG was making. As COG customers repaid their loans, COG would repay the Mintos

investors. At the time of appointment, the outstanding balance due to Mintos is c.£1.2m (an

interim payment has since been made of £200k; this is not covered in the reporting period of this

document but will be covered in our 6 monthly report).

– 2) The Bond holders are longer term investors in the business. They provided up front capital in

exchange for a fixed interest rate (or coupon) from the Company. The bonds are due to be repaid

in 2021. The current amount outstanding to bond holders is €5.8m (c.£5m).

• There are a number of factors which will determine the level of funds available for Avole (and

therefore Mintos and the bond holders), namely:

– the level of outstanding loans collected,

– the costs of realising these loans, and

– whether a sale of all or part of the business can be achieved.

Based on current information, it is expected that Mintos will receive a significant proportion of the

amount it is owed, possibly being repaid in full. It is expected that the bond holders may receive a

distribution too, but its quantum is uncertain at this juncture.

• We are not aware of any preferential creditors of the Company. Preferential creditors are mainly

employee related claims, and it is possible that some will be forthcoming in the fullness of time


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• Based on current information it is expected that there will be a small distribution to the unsecured

creditors (which is anticipated to include the majority of redress claimant creditors) by virtue of the

Prescribed Part. The exact amount and the timing of such a dividend is currently uncertain however

unsecured creditors are likely to receive a lot less than they are owed.

• COVID-19. Readers should be aware that COVID-19 has and is likely to have a future impact on the

conduct and outcome of this administration. This includes the impact on forecasting the timing and

amount of future recoveries from outstanding loan balances. Additionally, the Company’s and the

administrators’ team have had to work remotely (ie broadly from home, and not always at the

Company’s premises).

• Where necessary, the administrators have taken steps to seek to minimise costs. This has included a

number of employee redundancies, moving to cheaper premises and cancelling any contracts which

are longer required.

• At this point, approval of the proposals only is being sought and we will be seeking approval to the

basis of our remuneration and disbursements as set out at section 14 and of the pre-appointment costs

and expenses as set out in section 13 from the secured creditor in due course.

• The administrators have made a statement pursuant to P52(1)(b) Sch B1. As such, a creditors’ decision

to approve the proposals is, therefore, not being sought. If 10% or more by value of the Company’s

creditors so wish, a request may be made that the proposals be approved via a decision instead, details

of the process are covered in section 16 below.

• We will also seek approval of our discharge from liability from the secured creditor and preferential

creditors (where applicable).

• Our proposals will be deemed to have been approved on 9 May 2020 if we do not receive a valid request

for a creditors’ meeting.

• Redress exercise. The administrators are currently undertaking an exercise to develop a redress

methodology to determine the extent and quantification of redress claims. This will be relevant to

current and prior borrowers. We are in liaison with the FCA in this regard.

• Further information

– For borrowers, please refer to the relevant website:

www.peachy.co.uk

www.uploan.co.uk

If a current borrower believes that they are suffering financial hardship, from COVID-19 or

otherwise, then they should contact Peachy or Uploan (as appropriate) to discuss the options

available to them.

– For creditors, please refer to the administrators’ website:

www.smithandwilliamson.com/cog/

This website has available the same electronic version of this document as is scheduled to be

available on the Companies House website.

• Overall, we thank the many stakeholders for their engagement with us and efforts, especially in

light of COVID-19. Thank you.

4. Background to the administration Background

The Company was incorporated on 7 July 2010. COG provided high cost short term loans (pay day lending) to

the UK consumer market. The Company is regulated by the FCA. It traded through two websites:

www.peachy.co.uk and www.uploan.co.uk from premises in London and Tallinn, Estonia. The Company

developed the websites and loan approval technology with in-house specialists. The Company was growing

its business which was financed by short term lending from Mintos.

http://www.peachy.co.uk/

http://www.uploan.co.uk/

http://www.smithandwilliamson.com/cog/




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Change in UK regulation

In 2014, regulation of consumer credit firms transferred from the Office of Fair Trading to the FCA. The FCA

introduced new regulations around lending criteria as well as around the level of fees and charges that could

be levied on consumers. These included placing a total cap on fees, as well as limitations on other charges

that could be levied on high cost short term loans. These rules came into effect in January 2015. COG sought

to implement changes to its affordability criteria and lending practices in order to comply with these news

regulations.

Over time, the Company continued to receive increased levels of redress claims, directly from customers and

through Claims Management Companies (or CMCs), which could be escalated to the FOS.

Events prior to Administration

The FCA raised three matters with the Company in 2019:

- Affordability criteria, and the need to take steps to identify those customers who might be entitled

to compensation by means of redress (due to affordability reasons or otherwise) and quantify the

level of those liability claims.

- Mintos platform, and the risk to Mintos-derived consumer lenders if COG was to go insolvent.

- Balance sheet, and the risk of the Company being insolvent on a balance sheet basis without securing

new funding.

The Company engaged Smith & Williamson and Pinsent Masons (legal advisors) to assist with the matters

raised by the FCA. As part of these ongoing discussions, COG entered into an Undertaking with the FCA,

which, amongst other things, limited the level of funds flowing out of the Company in order to protect the

Company’s creditors.

Throughout this time, the Company was in negotiations with new investors in order to shore up COG’s balance

sheet and reduce its reliance on Mintos funding. The Company, with the assistance of its advisors, prepared

a wind-down plan which would be enacted if the Company was not successful in securing new investment.

This wind-down plan set out how COG proposed to wind-down the trade of the business in an orderly manner.

Having undertaken a due diligence exercise, the potential investors decided that they were unable to invest

in COG, in part due to the significant level of possible redress liabilities. Accordingly, COG took steps to place

the Company into administration.

The administrators’ appointment

Adam Henry Stephens, Henry Anthony Shinners and Gilbert John Lemon are all qualified insolvency

practitioners and licensed by the Institute of Chartered Accountants in England & Wales. As proposed

administrators, statements and consents to act were provided by all of us on 4 March 2020.

Notice of intention to appoint administrators was filed in the High Court of Justice Business and Property

Courts of England & Wales Insolvency and Companies List on 28 February 2020 by the director. This was

served on Avole, as QFCH.

Additionally, on 26 February 2020, pursuant to Section 362A of the Financial Services and Markets Act 2000,

consent was also sought from the FCA in relation to COG’s proposed administration.

Upon receipt of consent from Avole and the FCA, on 5 March 2020, the director filed the notice of appointment

of administrators in court.

Following our appointment, we attended the Company’s premises in London and Estonia in order to address

the staff. No immediate redundancies were made on the date of our appointment.

5. Purpose of administration and strategy Administrators must perform their functions with one of the following objectives:

• rescuing the Company as a going concern; or


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• achieving a better result for the company's creditors as a whole than would be likely if the Company were

wound up (without first being in administration); or

• realising property in order to make a distribution to one or more secured or preferential creditors.

In this case, the second objective above is being pursued.

The first objective cannot be achieved in this instance as the Company is in wind-down with no prospect of a

solvent resolution to the administration.

The second objective will be achieved by continuing to trade the Company whilst winding down its affairs in

an orderly manner. If the Company was placed into liquidation, without first being in administration, this

would likely have resulted in a significant and detrimental impact on the Company’s ability to continue to

trade. The knock-on effect would almost certainly result in lower recoveries from the loan book, and

therefore a worse outcome for creditors.

Our role, prior to our appointment as administrators, was to advise the Company, not the directors or any

party considering acquisition of the business whether by means of a pre-pack or other. Once appointed,

administrators are obliged to perform their functions in the interests of the Company’s creditors as a whole.

Where the objective of the administration is to realise property in order to make a distribution to secured or

preferential creditors, we have a duty to avoid harming unnecessarily the interests of the creditors as a

whole.

Section 7 provides details of the actions taken to date in pursuit of our strategy for the administration and

Section 10 details our proposals to achieve the purpose of the administration and to bring it to a conclusion

in due course.

6. Joint administrators’ receipts and payments A summary of our receipts and payments for the administration period from the date of our appointment to

12 April 2020 is attached at Appendix III. This shows funds in hand of c.£1.5m.

7. Conduct of the administration

7.1 Customer borrower information Customers of the Company (including those of Peachy and Uploan) can continue to access the relevant

website. These are

www.peachy.co.uk

www.uploan.co.uk

Further information including frequently asked question sheets relating to the administration can be found

on these websites.

Customers are reminded that whilst the Company has gone into administration, they are still bound by the

terms of their loan agreement. If they are suffering financial hardship, from COVID-19 or otherwise, they

should contact Peachy or Uploan (as appropriate) to discuss the options available to them.

Additionally, the administrators have set up a separate website for creditors. This has information including

an electronic version of this document. This website is:

www.smithandwilliamson.com/cog/



http://www.smithandwilliamson.com/cog/


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7.2 Loan recoveries The most significant asset of the Company is the outstanding loan book. The Company stopped issuing new

customer loans in November 2019.

At the date of our appointment, the value of the loan book in accordance with the Company’s balance sheet

(namely those loans which are less than 361 days overdue), totalled some £11,241,052 due from 29,076

customers. This comprised 12,425 of current loans with an outstanding balance of £3,001,524 and 16,651 non-

performing (or overdue) loans with a value of £8,239,528. Since then, we have realised c.£1.5m of loan

repayments.

Given the ongoing COVID-19 pandemic, it is very hard to forecast the timing and amount of future recoveries

from these outstanding loan balances.

Certain loans have historically been treated as being assigned to investors on the Mintos platform. We are in

dialogue with Mintos on this and the timing and quantum of payments to them. We thank them for their

assistance to date. With the assistance of our legal advisors, Pinsent Masons, we are reviewing the validity

of the Mintos assignment agreements and are considering the implications of these on recoveries and

compensation claims. Mintos maintains a robust position that the Company is collecting and holding on trust

the loan repayments from the Company’s customers for the benefit of the Mintos investors. This is a complex

legal issue that needs to consider legislation applying in England and Latvia.

We are continuing to assess the best way forwards to maximise recoveries for the benefit of creditors. This

includes exploring whether the sale of either the non-performing and / or performing loan book would result

in a better overall recovery for creditors. In this regard, we have instructed specialist agents, Hilco, who

have undertaken a marketing and sales exercise. Expressions of interest should be made (including but not

limited to part or whole of the Company’s business or loan book) via Hilco. Their contact details are:

Thomas Wood Telephone: +44 141 483 9589 Mobile: +44 7548 218240 Email: [email protected]

7.3 Redress claims As required under the Company’s existing regulatory framework, it will be necessary to undertake an exercise

to develop and implement a redress methodology. There is the prospect of a significant amount of work to

be done in calculating such claims.

We anticipate that this will relate to claims deriving from the historic application of affordability criteria.

We are working with the Company’s senior management and compliance officer and our legal advisers to

devise such a redress methodology.

It is currently anticipated that the system adopted will be web-based using the Company’s existing systems

(and the Peachy and Uploan websites) and Company staff have been retained for this purpose.

As noted later in section 8.3, it is anticipated that the funds available to satisfy unsecured creditor claims

(which would include the majority of redress claims) will be no more than £600,000. Therefore, the

administrators will seek to devise a mechanism which seeks to keep costs down to maximise the cash

available. We understand that the total number of borrower customers and associated loans which have been

cumulatively been made exceeds some 200,000, and therefore would present a potential administrative

challenge to deal with in a cost-effective manner.

7.4 Chattel assets The Company owns various chattel assets including IT equipment. Whilst the Company is continuing to wind

down its business these assets will be used. If we are unable to find a buyer for the entire business, we will

look to realise these assets at an appropriate time in the future.

7.5 Leasehold premises COG operates from two leasehold premises (one in London and one in Tallinn). There is no value in these

leases.


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7.6 Intellectual property COG has invested heavily in its software and IT systems (including its websites and back office functions). We

are in discussions with a number of parties regarding a possible sale of these systems and the intellectual

property.

7.7 Other trading matters • We have made 8 redundancies since we were appointed. As the trade of the business is winding down,

we will make further redundancies in order to reduce the operating costs of the business. We plan to

liaise with the EUIF (in Estonia) and RPS (in the UK) to make sure that redundant employees receive the

compensation they are entitled to.

• A core team has been retained to facilitate the ongoing trade of the business. This includes key members

of the customer services team, IT department, compliance roles and the accounting function. We thank

staff for their ongoing help and assistance, especially given the challenges deriving from Covid-19.

• Notice has been served on the landlord in the Tallinn premises in order to relocate the office to smaller

and cheaper premises.

• Other cost saving measures have been implemented.

• We are working with the Company's banks in order to ensure the pre-administration bank accounts

continue to operate as usual to minimise disruption to customers. We have also been in discussions with

the merchant services providers to ensure a continuation of services for processing of card payments.

• Contacted key trade suppliers to ensure continuation of service and issued letters of undertaking as

required.

• Undertaken regular monitoring of the Company’s cashflow, reviewing and approving payments as

required.

7.8 Other steps taken since appointment We summarise below the other key matters that we have dealt with since our appointment:

• Reported to the FCA on a regular basis and taken steps to suspend certain statutory reporting

requirements in order to save costs.

• Liaised with and provided updates to the FOS.

• Investigated the conduct of the Company’s directors, as required by statute.

• Reviewed the Company’s pension arrangements, ensuring that contributions deducted from employees

continue to be paid to the pension providers and seeking advice from S&WFS in relation to the Company’s

pension arrangements.

8. Financial position at the date of administration

8.1 Director’s SOA Attached at Appendix IV is a copy of the director’s SOA as at the date of our appointment as administrators

on 5 March 2020. We received the SOA on 20 March 2020, and it has since been filed with the Registrar of

Companies. The Company’s head of finance also provided a statement of concurrence.

Please note that the realisable values do not reflect the costs of realisation nor the professional costs

associated with the administration.


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8.2 Charges and secured creditors Avole holds a debenture containing floating charge over the Company’s assets. At the date of the

administration, the debt was estimated at £6.2m. Interest has been, and continues to be, added until the

liability has been paid in full.

8.3 Prescribed Part Where a company has created a floating charge on or after 15 September 2003, Section 176A of the Insolvency

Act 1986 makes provision for a share of the company’s net property to be set aside for distribution to

unsecured creditors in priority to the floating charge holder. The company’s net property is the balance that

remains after preferential creditors have been paid and which would then otherwise be available for

satisfaction of the claims of any holder of a debenture secured by a floating charge. The funds are referred

to as the Prescribed Part.

The amount of the Prescribed Part is calculated as follows:

• 50% of the net property up £10,000, plus

• 20% of the net property over £10,000

• up to a maximum Prescribed Part of £600,000

The Company granted a floating charge to Avole on 3 December 2018. Accordingly, we are required to set

aside a Prescribed Part fund for unsecured creditors out of the Company’s net floating charge property.

Based on present information, we believe that there will be a Prescribed Part available for unsecured

creditors. However, at this time we are unable to provide as estimate of the amount of the Prescribed Part

of when we will be able to distribute it. Once we are in a position to distribute the Prescribed Part, this will

be distributed by the joint administrators in the administration.

8.4 Preferential creditors We are not aware of any preferential creditors of the Company, however, will monitor this throughout the

administration and provide a further update within the administrators’ initial progress report.

8.5 Unsecured creditors Unsecured creditors are estimated to be £484,528 in the director’s SOA, plus any redress creditors (which are

listed as uncertain on the director’s SOA). We believe that some customers of COG may be entitled to

compensation in the form of a redress claim, the level of which has not been quantified in the SOA. The

number of people impacted by this and the total level of claims is uncertain at this time. Our work is ongoing

in this regard, including directing staff, and liaising with the FCA, to ascertain a methodology and implement

it in a cost-efficient manner.

Please note that the version of director’s SOA sent to creditors includes a details of individual creditors. This

is required by insolvency legislation. However, the version filed at Companies House (which is publicly

accessible) will not show the full identifying details of certain creditors.

9. Estimated outcome for creditors Our current assessment of the likely outcome for creditors is as follows:

• Payments to secured creditor under floating charges (being for the benefit of Mintos and Bond holders)

- We expect that, overall, the floating charge creditors will suffer a shortfall on their lending, but it

remains to be seen what the level of that will be. As noted earlier, Avole Holding AS (“Avole”) has a

valid floating charge registered against the Company. Avole acts as a security agent whereby it will

distribute any monies it receives in accordance with its security documentation. The order of priority of

parties entitled to receive funds from Avole are: 1) Mintos 2) Bond holders.


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– For Mintos, at the time of appointment, the outstanding balance due was c.£1.2m. An interim

payment (on the basis of its primary priority ranking) has since been made of £200k, this is not

covered in the reporting period covered by this document but will be covered in our subsequent 6

monthly progress report.

– For the Bond holders these were due to be repaid in 2021, and the outstanding amount due is

€5.8m (or c.£5m). It is uncertain at this juncture what the quantum of their recovery will be.

– There are a number of factors which will determine the level of funds available for Avole (and

therefore Mintos and the bond holders), namely:

– the level of outstanding loans collected (especially in light of COVID-19),

– the costs of realising these loans, and

– whether a sale of all or part of the business can be achieved.

– Based on current information, it is expected that Mintos will receive a significant proportion of the

amount it is owed, if not all. It is expected that the bond holders may receive a distribution too,

but its quantum is uncertain at this juncture.

• Payments to preferential creditors’ position – We are not currently aware of any preferential creditors.

For your information, preferential creditors mainly comprise certain (not all) employee claims.

• Payments to unsecured creditors’ position – We envisage that there will be a Prescribed Part

distribution only available to unsecured creditors. Unsecured creditors will therefore likely suffer a

significant shortfall on the amounts owed to them.

10. Proposals for achieving the purpose of administration Our proposals for achieving the purpose of administration for the Company are as follows:

i. The administrators will continue to manage the affairs of the Company in order to achieve the

purpose of the administration, namely with the objective of achieving a better result for the

Company's creditors as a whole than would be likely if the Company were wound up (without first

being in administration) pursuant to P3(1)(b) Sch B1

ii. The administrators will continue to trade the Company for such period as they consider necessary to

achieve the intended objective outlined above. The wind down of the business is expected to be

completed within 12 months of the administrators’ appointment.

Practical steps to be taken for this purpose include:

• Continuing the collection of the Company’s outstanding loan book and, at an appropriate

time (if considered that this will achieve the best outcome for creditors) seek a sale of the

Company’s remaining loan book

• Explore whether a sale of part or all the loan book at this time will resolute in a better

result for creditors

• Explore whether a sale of part or all the Company’s business and assets can be completed

in order to achieve a better outcome for creditors

iii. As the administrators do not consider that the survival of the existing Company is achievable, they

will take any action they consider necessary to achieve a sale of the business and / or assets as a

going concern to maximise returns to the administration estate.

iv. If having realised the assets of the Company, the administrators think that a distribution will be

made to unsecured creditors, other than by way of any applicable Prescribed Part distribution, they

propose filing a notice with the Registrar of Companies which will have the effect of bringing the

appointment of the administrators to an end and will move the Company automatically into CVL in

order that the distribution can be made.


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v. If the administrators consider it appropriate and cost effective to do so, they may make an

application to court for permission to make any distribution to the unsecured creditors that is not

from the Prescribed Part in the administration instead of moving the Company to CVL and then

making a distribution. (Note: If permission is granted, subject to the need for further investigations

as detailed in the next section, the Company will exit into dissolution once the distribution has been

made and the administration concluded).

vi. If the administrators think that the Company has no property which might permit a distribution to

its creditors, they will file a notice with the court and the Registrar of Companies for the dissolution

of the Company.

vii. If the administrators consider it appropriate to do so, they will make an application to court for the

compulsory winding up of the company. This will usually be the case where the timeframe of

administration would not be sufficiently long to complete the work they are undertaking in an

administration or if there are actions more appropriately brought by a liquidator.

viii. The administrators shall do all such other things and generally exercise all of their powers as

contained in Schedule 1 IA86, as they consider desirable or expedient to achieve the purpose of the

administration.

ix. If a decision procedure is initiated by creditors, the administrators propose asking creditors to

consider establishing a creditors' committee. If such a committee is formed the creditors who

become members of the committee will be responsible for sanctioning the basis of the joint

administrators’ remuneration and disbursements, any unpaid pre-administration costs and certain

proposed acts on the part of the joint administrators. The committee will be able to make these

decisions without the need to report back to a further meeting of creditors generally.

11. Exit route from administration It is proposed that, at the appropriate time, the administrators will use their discretion to exit the

administration by way of one of the following means:

(i) If having realised the assets of the Company, the administrators think that a distribution will be

made to the unsecured creditors other than by virtue of the Prescribed Part, they may file a notice

with the Registrar of Companies which will have the effect of bringing the appointment of the

administrators to an end and will move the Company automatically into CVL in order that the

distribution can be made, but only if they consider that the associated incremental costs of a CVL

are justified. In these circumstances, it is proposed that the administrators, Adam Henry Stephens,

Henry Anthony Shinners and Gilbert John Lemon will become the joint liquidators of the CVL. The

acts of the joint liquidators may be undertaken by any or all of them.

(ii) Creditors have the right to nominate alternative liquidators of their choice. To do this, creditors

must make their nomination in writing to the administrators prior to these proposals being approved.

Where this occurs, the administrators will advise creditors and provide the opportunity to vote. In

the absence of a nomination, the administrators will automatically become the joint liquidators of

the Company in the subsequent CVL.

(iii) If the administrators have, with the permission of the court, made a distribution to unsecured

creditors in addition to any Prescribed Part distribution, or they think that the Company otherwise

has no property which might permit a distribution to its unsecured creditors, subject to there being

a need for further investigations as described below, they will file a notice, together with their final

progress report, at court and with the Registrar of Companies for the dissolution of the Company.

The administrators will send copies of these documents to the Company and its creditors. The

administrators’ appointment will end following the registration of the notice by the Registrar of

Companies.

(iv) If the administrators consider it appropriate to do so, they will make an application to court for the

compulsory winding up of the company. This will usually be the case where the timeframe of

administration would not be sufficiently long to complete the work they are undertaking in an

administration or if there are actions more appropriately brought by a liquidator.


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Administrators have the power to bring claims against former officers of the company in respect of

transactions that may have caused or exacerbated a company’s insolvency. Claims with a good prospect of

success may indeed be pursued by administrators but there may be cases where it would be more appropriate

if a liquidator brought the claim or where the timeframe would not be long enough, given the maximum

extension period available to administrators. The proposed exit route would, in these cases, be liquidation.

In the event that the requisite level of creditors requests a meeting, a creditors’ committee may be formed.

In this case, if a creditors’ committee is established the administrators will consult with the members and

agree the most appropriate exit route from administration.

12. Other matters relating to the conduct of the administration The matters detailed below are not considered to be part of the proposals but are intended to provide

creditors with information concerning the remaining statutory and other matters that must be dealt with in

the administration.

• Submitting confidential information relating to the conduct of the director to the Department for

Business, Energy & Industrial Strategy. This obligation arises under the Company Directors’

Disqualification Act 1986. Creditors should note that the content of any submission is strictly confidential

and under no circumstances will discussions be entered into regarding this.

• Agreeing and making payment of preferential claims, subject to availability of funds and should any

preferential creditors come to light.

• Agreeing the claims of and making payment to secured creditors, including floating charge holders, in

accordance with their respective priorities, subject to availability of funds

• Filing corporation tax returns and obtaining tax clearance in respect of the administration period

• Paying all costs and expenses of the administration once any required approval has been obtained

• Further statutory reporting as required by IA86 and IR16.

13. Pre-administration costs and expenses

13.1 Pre-administration costs S&W entered into an engagement letter with the Company on 25 October 2019. Our costs were to be charged

on a time cost basis. Our engagement was, in summary, to:

- Review the current and forecast financial performance of COG in order to assess the funding

requirement for COG’s ongoing trade and in order to meet compensation claims

- Liaising with the FCA and legal advisors

- Undertaking ad hoc support as required

As at the date of this report, costs totalling £62,500 have been paid by the Company in relation to our

engagement letter.

In addition to this, we have also necessarily incurred costs prior to our appointment in considering alternative

options and also preparing for the administration of the Company. Our pre-administration time costs in

assisting the Company with a view to it going into administration are £60,171, a breakdown of which is given

in Appendix V.


14

Pre-appointment fees charged and expenses incurred by us are detailed below:

Charged by/service(s) provided

Total

amount

charged

£

Amount

paid

£

Who made

payment

Amount

unpaid

£

Smith & Williamson LLP 60,171 Nil N/A 60,171

Pinsent Masons LLP (legal fees and

disbursements)

30,394 Nil N/A 30,394

Total 90,565 Nil 90,565

We are not aware of any fees or expenses incurred by any other person qualified to act as an insolvency

practitioner with a view to the Company entering administration.

The payment of unpaid pre-administration costs set out above as an expense of the administration is subject

to the approval of creditors, separately from the approval of the administrators’ proposals. As we believe

that the Company has insufficient property to enable a distribution to be made to the unsecured creditors,

other than via the Prescribed Part, it is our intention to seek approval from the secured and (if applicable)

the preferential creditors, unless a creditors’ committee has been established, in accordance with R18.18

IR16.

14. Joint administrators’ remuneration Insolvency Practitioners are required to provide stakeholders with details of the work they propose to do and

the expenses that are likely to be incurred. Prior to drawing any fees, these details must be provided to

creditors and approval given. Alternatively, creditors may form a committee and, if so, it is up to the majority

of committee members to give consent.

Where it is proposed that fees are drawn from the insolvent estate on a time costs basis, a fees estimate will

also need to be provided. Where it is unrealistic to estimate the work to be done at the outset, an estimate

may be provided for a designated period or up to a particular milestone.

Creditors should be aware that the fees estimate is based on information available at present and may change

due to unforeseen circumstances arising. If any approved fees estimate is exceeded, a revised estimate will

need to be provided and approval given before any fees may be drawn in excess of the original approved

estimate.

Some of the work required by Insolvency Practitioners is required by law and may not necessarily result in

any financial benefit for creditors (or members). Examples of this work would include investigations required

under the Company Directors’ Disqualification Act 1986 or dealing with former employees’ claims through the

RPS/UIB.

On some occasions, third parties may be instructed to provide expert advice on tax, legal or property matters

to produce a financial benefit to creditors.

Each aspect of the work undertaken will require different levels of expertise and, therefore, cost. To make

it clear, we have given the rates for each grade of staff with estimates of the total hours to be spent on each

aspect in the table provided.


15

The basis of the administrators’ remuneration may be fixed on one or more of the following bases and

different bases may be fixed in respect of different things done by them:

• as a percentage of the value of the assets they have to deal with, or

• by reference to time properly spent by the administrators and their staff in attending to matters arising

in the administration, or

• as a set amount

In this case, the administrators are seeking approval for the basis of their remuneration as follows:

• By reference to the time properly spent by the administrators and their staff in attending to matters

arising in the administration. This is estimated to total £384,682.00 for the first 12 months of the

administration. As we will be seeking approval to draw fees on this basis, a fees and costs estimate is

attached at Appendix VII. This details the estimated fees according to the grade of staff, expected

number of hours to perform specific tasks, some of which are mandatory, irrespective of the company,

and some of which are specific to this case, and the average hourly rate.

Where no creditors' committee is established, approval of the administrators’ remuneration shall be fixed

using the decision-making process either at a virtual creditors’ meeting or by electronic and/or postal voting.

Where the administrators have concluded that the company has insufficient property to enable a distribution

to be made to the unsecured creditors (other than via the Prescribed Part), approval will be sought from the

secured and (if necessary) the preferential creditors, unless a creditors’ committee has been established, in

accordance with R18.18 IR16. In this instance, the administrators intend to seek approval to their

remuneration from the secured creditors.

Included in the total estimate given in Appendix VII are the accrued, administrators’ time costs which cover

the period from the date of the administration to 12 April 2020 and total £100,837.00. A breakdown is given

in Appendix VI which represents 309.65 hours at an average rate of £325.65 per hour.

A copy of “A Creditor’s Guide to Administrator’s Fees”, as produced by the ICAEW, is available free on request

or can be downloaded from their website as follows:

https://www.icaew.com/-/media/corporate/files/technical/insolvency/creditors-

guides/2017/administration-creditor-fee-guide-6-april-2017.ashx?la=en

Details of S&W’s charge out rates and policies in relation to the use of staff are provided at Appendix VII.

Please be aware that the charge out rates are subject to an annual review.

Creditors should also be aware that some of the work is required by statute and may not necessarily provide

any financial benefit to creditors. Examples would include dealing with former employees’ claims through

the Redundancy Payments Service and providing information relating to the company and its former officers

as required by the Company Directors’ Disqualification Act 1986.

14.1 S&WFS S&WFS, a company associated with Smith & Williamson LLP, may be required to deal with the Company’s

pension affairs. Payments to parties in which administrators or their firm have an interest must be disclosed

to, and approved by, creditors in a similar way as approval of the administrators’ remuneration.

In this case, the administrators are seeking approval for the basis of S&WFS as follows:

• By reference to the time properly spent by the S&WFS staff and their staff in attending to matters arising

in the administration. As we will be seeking approval to draw fees on this basis, a fees and costs estimate

is attached at Appendix VI. This details the estimated fees according to the grade of staff, expected

number of hours to perform specific tasks, some of which are mandatory, irrespective of the company,

and some of which are specific to this case, and the average hourly rate.

Details of S&WFS’ charge out rates are included at Appendix VIII.

https://www.icaew.com/-/media/corporate/files/technical/insolvency/creditors-guides/2017/administration-creditor-fee-guide-6-april-2017.ashx?la=en

https://www.icaew.com/-/media/corporate/files/technical/insolvency/creditors-guides/2017/administration-creditor-fee-guide-6-april-2017.ashx?la=en


16

15. Administration expenses

15.1 Subcontractors We have not used any subcontractors.

15.2 Professional advisors We have used the professional advisers listed below. We have also indicated alongside the basis of our fee

arrangement with them, which is subject to review on a regular basis.

Professional

adviser/service

Basis of fee

arrangement

Costs

incurred

£

Costs

paid

£

Costs unpaid

£

Pinsent Masons LLP

(legal fees and

disbursements)

Hourly rate and

disbursements

37,531 13,650 23,881

Hilco Appraisal Limited

(valuation and sales

agents)

Fixed fee plus percentage

of realisations and

disbursements

7,500 0 7,500

Total 45,031 13,650 31,381

Due to the nature of the appointment, the administrators have also used the following professional advisers,

based in Estonia. Details of the fee arrangement, as well costs incurred / paid in € can be found in the table

below:

Professional

adviser/service

Basis of fee

arrangement

Costs

incurred

€

Costs

paid

€

Costs unpaid

€

Fort Legal (Estonian

Legal Advice)

Hourly rate and

disbursements

2,020 0 2,020

Cobalt (Latvian Legal

Advice)

Combination of fixed fees

and hourly rates and

disbursements

4,000 0 4,000

Total 6,020 0 6,020

15.3 Administrators’ disbursements We have paid and/or incurred the following disbursements in the current period:

Description

Incurred in

current period

£

Paid in

current period

£

Total costs

outstanding at

period end

£

Statutory advertising 91 0 91


17

Description

Incurred in

current period

£

Paid in

current period

£

Total costs

outstanding at

period end

£

Joint Administrators’ bonds 140 0 140

Travel & subsistence 1,571 0 1,570

Total 1,801 0 1,801

Note: Total costs outstanding may include costs incurred in prior periods, but not yet paid.

15.4 Category 2 disbursements Since our appointment we have not incurred any Category 2 disbursements.

In accordance with SIP 9, Remuneration of Insolvency Office Holders, the administrators will be seeking

approval to draw Category 2 disbursements as and when they arise and from the funds that are available, in

accordance with S&W’s disbursement recovery policy.

15.5 Policies regarding use of third parties and disbursement recovery Details of S&W’s policies regarding the use of subcontractors and professional advisors and the recovery of

disbursements are set out at Appendix VII.

16. Creditors’ decisions The administrators do not believe that the Company has sufficient property to enable a distribution to be

made to unsecured creditors, expect by virtue of the Prescribed Part. In accordance with P52(1)(b) Sch B1,

the administrators are therefore not required to seek a decision from the Company's creditors as to whether

they approve the administrators’ proposals.

Unless the administrators receive a request that the proposals be approved via a decision instead, the

proposals detailed will be deemed to have been approved. A request can only be made by creditors with

claims totalling at least 10% of the total company’s debts and this request must be received within 8 business

days of these proposals being delivered.

Creditors considering whether to request a decision procedure may wish to note that the purpose of the

decision is purely to approve or modify the proposals. It does not afford creditors the opportunity to question

the directors of the Company.

The administrators will seek approval of their and third party/ies’ pre-appointment remuneration, costs and

disbursements and their discharge from liability from the secured and/or preferential creditors as

appropriate.

17. Privacy and data protection As part of our role as joint administrators, I would advise you that we may need to access and use data relating to individuals. In doing so, we must abide by data protection requirements. Information about the way that we will use and store personal data in relation to insolvency appointments can be found at https://smithandwilliamson.com/rrsgdpr

If you are unable to download this, please contact my office and a hard copy will be provided free of charge.

https://smithandwilliamson.com/rrsgdpr


18

To the extent that you hold any personal data of the Company’s data subjects provided to you by the Company or obtained otherwise, you must process such data in accordance with data protection legislation. Please contact us if you believe this applies.

18. Next report and creditors’ rights The joint administrators are required to provide a progress report within one month of the end of the first

six months of the administration or earlier if the administration has been finalised.

From receipt of the first progress report, creditors have rights under IR16 to request further information and

to challenge the joint administrators’ remuneration and/or expenses incurred. In summary:

• Within 21 days of the receipt of a progress report, a secured creditor, or an unsecured creditor (with the

concurrence of at least 5% in value of the unsecured creditors or otherwise with the court’s permission)

may request in writing that the joint administrators provide further information about their remuneration

or expenses which have been itemised in the report.

• Any secured creditor, or an unsecured creditor (with the concurrence of at least 10% in value of the

unsecured creditors or otherwise with the court’s permission) may within 8 weeks of receipt of a progress

report make an application to court on the grounds that, in all the circumstances, the basis fixed for the

joint administrators’ remuneration is inappropriate and/or the remuneration charged or the expenses

incurred (including any paid) by the joint administrators, as set out in the report, are excessive.

The above rights apply only to matters which have not been disclosed in previous reports.

On a general note, if you have any comments or concerns in connection with our conduct, please contact

Adam Henry Stephens, Henry Anthony Shinners or Gilbert John Lemon in the first instance. If the matter is

not resolved to your satisfaction, you may contact our Head of Legal by writing to 25 Moorgate, London EC2R

6AY or by telephone on 020 7131 4000.

Thereafter, if you wish to take the matter further you may contact the Insolvency Services directly via Insolvency Complaints Gateway. They can be contacted by email, telephone or letter as follows:

i) Email: [email protected]

ii) Telephone number: +44 300 678 0015

iii) Postal address: The Insolvency Service, IP Complaints, 3rd Floor, 1 City Walk, Leeds LS11 9DA.

Thank you Finally, we thank the many stakeholders for their engagement with us and efforts, especially in light of

COVID-19. Thank you.

Adam Henry Stephens, Henry Anthony Shinners and Gilbert John Lemon

Joint Administrators

Date: 24 April 2020

mailto:%[email protected]


19

Appendices


20

I Statutory information

Relevant Court High Court of Justice Business and Property Courts of England & Wales

Insolvency and Companies List

Court Reference 001447 of 2020

Trading Name(s) Cash On Go, Peachy, Uploan

Trading Addresses 199 Bishopsgate, London, EC2M 3TY

Former Name(s) N/A

Registered Office 25 Moorgate, London, EC2R 6AY

Formerly: 199 Bishopsgate, London, EC2M 3TY

Registered Number 07306662

Joint Administrators Adam Henry Stephens, Henry Anthony Shinners both of Smith & Williamson

LLP, 25 Moorgate, London, EC2R 6AY and Gilbert John Lemon of Smith &

Williamson LLP, Portwall Place, Bristol, BS1 6NA

(IP Numbers 9748, 9280 and 9573)

In accordance with P100 (2) Sch B1 1A 86 a statement has been made

authorising the Joint Administrators to act jointly and severally.

Date of Appointment 5 March 2020

Appointor

Director

Shareholder

Secretary

The director of the Company

Kristjan Novitski

Sia Smart Finance Holding

Sia Smart Finance Holding

EU Regulations The EU Regulation on Insolvency Proceedings 2015 applies to the

administration. The proceedings are main proceedings as defined by Article

3 of the Regulation. The Company is based in the United Kingdom.


21

II Prior professional relationship

Statement of prior professional relationship of Adam Henry Stephens, Henry Anthony Shinners and Gilbert John Lemon in respect of the appointment of administrators

We have a prior professional relationship with Company to the extent set out below:

The basis of our pre-administration costs was set out in our engagement letter with the Company dated 25

October 2019. Our costs were charged to the Company on a time cost basis and we have received fees

totalling £62,500 plus VAT and disbursements.

Our engagement was, in summary, to:

- Review the current and forecast financial performance of COG in order to assess the funding

requirement for COG’s ongoing trade and in order to meet compensation claims

- Liaising with the FCA and legal advisors

- Undertaking ad hoc support as required

We confirm that we have fully considered the relevant guide to professional conduct and ethics issued by our

professional body and are satisfied that the existence of this prior relationship does not create any conflict

of interest or threat to independence for us as office holders.

We confirm that we considered whether the interests of creditors would be better served by the appointment

of other insolvency practitioners as the administrators and are satisfied that the interests of creditors will

not be prejudiced by our appointment as the administrators. The QFCH consented to our appointment as

administrators.


22

III Receipts and payments

account

Receipts and payments account to 12 April 2020

Using exchange rates at the date of this report, the cash in hand totals £1,459,186.

RECEIPTS AND PAYMENTS ACCOUNT

£ - GBP € - EUR $ - USD

RECEIPTS

Trading Surplus (carried forward from trading R&P) 1,467,248 9,495 23

TOTAL RECEIPTS 1,467,248 9,495 23

PAYMENTS

Legal Fees (13,639) 0 0

Legal Disbursements (11) 0 0

Irrecoverable VAT (2,730) 0 0

TOTAL PAYMENTS (16,380) 0 0

BALANCE IN HAND 1,450,868 9,495 23

From 05/03/2020 to 12/04/2020


23

TRADING RECEIPTS AND PAYMENTS ACCOUNT

£ - GBP € - EUR $ - USD

TRADING RECEIPTS

Cash at Bank 264,631 82,688 0

Loan Repayments 1,487,999 0 0

Receipts from Marketing Clients 24,076 8 2

Deposit Refunds 2,262 198 0

Intra Company Receipts 204,200 505,128 1,600

1,983,168 588,022 1,602

TOTAL TRADING RECEIPTS

TRADING PAYMENTS

Client Refunds (10,322) 0 0

Rent (1,430) (14,072) 0

Intra Company Bank Payments (432,913) (247,775) 0

Professional Fees (442) (7,641) 0

IT Suppliers (14,310) (27,097) (1,579)

Debt Collection Services (17,856) 0 0

Telephone (2,999) (967) 0

Bank Charges (27,060) (607) 0

PAYE & NI (2,912) (98,049) 0

Postage (2,493) (13) 0

Wages & Salaries (including pension contributions) (3,183) (174,798) 0

Insurance 0 (52) 0

Travel 0 (247) 0

Sundry Expenses 0 (547) 0

Property Costs 0 (3,015) 0

Archiving Costs 0 (122) 0

Irrecoverable VAT 0 (3,525) 0

TOTAL TRADING PAYMENTS (515,920) (578,527) (1,579)

TRADING SURPLUS 1,467,248 9,495 23

From 05/03/2020 to 12/04/2020


24

Notes and further information required by SIP 7

• The administrators’ remuneration has not yet been approved.

• We have not yet sought approval of or drawn any other costs that would require the same approval as

our remuneration. Information concerning the ability to challenge remuneration and expenses of the

administration is provided in our report.

• Details of significant expenses paid and payments made to sub-contractors (if applicable) are provided

in the body of our report.

• Information concerning our disbursements incurred is provided in the body of the report.

• All bank accounts are interest bearing.

• As detailed in the body of the report, the administrators are continuing to trade the business with a view

to maintaining an orderly wind down and collection of the Company’s primary asset, being the debtor

ledger.

• Intracompany receipts and payments corresponds to movements between various accounts operated by

the Company, usually for the payment of expenses in foreign currencies.

The administrators have retained several of the Company’s existing bank accounts, with a view to minimising the disruption to the ongoing collection of book debts.

Details of accounts held in foreign currencies are outlined clearly. Upon cessation of the trading administration period, the administrators will take steps to collate all monies held into a single account, in preparation for distribution, where permitted.

All amounts in the receipts and payments account are shown exclusive of any attributable VAT. As the activity of the Company is financial services, it is not able to recover VAT on expenditure. VAT is therefore recorded as irrecoverable VAT.


25

IV Director’s Statement of Affairs

as at 5 March 2020


26


27


28


29


30


31


32


33


34

V Time analysis for the pre-

appointment period

From 27 January 2020 to 5 March 2020

Explanation of major work activities undertaken

During the period prior to the Administrators appointment, the following activities were undertaken:

• Undertaking an analysis of the options available and assessing the possible routes which would provide

the best outcome for creditors.

• Working with key personnel to prepare the Company for entering into administration.

• Working with the Company to prepare a wind-down plan to facilitate an orderly wind-down of the

business.

• Assisting the Company with requests from and meetings with the FCA

• Working with the Company and QFCH (including Mintos) to prepare contingency plans to best preserve

value in the Company’s assets for the benefit of creditors.

• Holding various telephone conference calls with the management and other key stakeholders to discuss

and agree strategy.

• Working with the lawyers to understand legal issues affecting the appointment

• Considering and planning for steps immediately on appointment (including reviewing cash flow forecasts,

making contact with key suppliers and considering the level of work force required)

• Dealing with the approval and execution of the administration appointment documents for their filing at

Court.

• Client identification and Anti Money Laundering checks.

Classification of work function

Partner /

Director

Associate

director

Manager/

Assistant

Manager

Other

professional staff

Assistants &

support staff

Total

hours Time cost

Average

hourly

rate

Pre-Appointment

Initial meetings 0.00 0.00 0.00 0.65 0.00 0.65 156.00 240.00

Company searches and background checks 0.00 0.00 0.00 1.15 0.00 1.15 275.50 239.57

General advisory work insolvent 14.95 0.00 67.25 0.60 0.00 82.80 33,772.00 407.87

Appointment formalities 6.00 0.00 0.00 12.80 0.00 18.80 5,973.00 317.71

Preparation of pre-appointment documents 2.25 0.00 0.00 8.25 0.00 10.50 3,435.75 327.21

Job planning 4.90 0.00 0.00 3.20 0.00 8.10 3,318.00 409.63

File and information management 0.00 0.00 0.00 0.15 0.00 0.15 31.50 210.00

Other 0.00 0.00 45.50 10.90 0.00 56.40 13,209.00 234.20

Total 28.10 0.00 112.75 37.70 0.00 178.55 £60,170.75 £337.00

Hours


35

VI Time analysis for the period

From 5 March 2020 to 12 April 2020

Explanation of major work activities undertaken

Administration and Planning

• Preparing the documentation and dealing with the formalities of appointment.

• Statutory notifications and advertising.


Partner /

Director

Associate

director

Manager/

Assistant

Manager

Other

professional

staff

Assistants &

support

staff

Total

hours Time cost

Average

hourly

rate

Administration and planning

Statutory returns, reports & meetings 0.30 0.00 11.00 10.80 0.00 22.10 £6,899.00 £312.17

Initial post-appointment notification letters, including creditors 7.20 1.50 2.10 25.60 0.00 36.40 £11,460.00 £314.84

Cashiering general, including bonding 0.00 0.00 1.00 2.05 0.00 3.05 £1,048.50 £343.77

Job planning, reviews and progression (inc 6 month reviews and planning

meetings, checklist & diary13.70 1.70 20.15 6.45 0.00 42.00 £15,396.00 £366.57

Post-appointment taxation (VAT, PAYE/NIC, Corp Tax that are not trading

related)0.20 0.00 0.55 0.00 0.00 0.75 £317.00 £422.67

Protection of company records (incl electronic) 0.00 0.00 0.00 1.10 0.00 1.10 £264.00 £240.00

Insurance & general asset protection 1.10 0.00 0.75 0.55 0.00 2.40 £906.00 £377.50

Travelling 12.00 0.00 18.50 0.00 0.00 30.50 £10,920.00 £358.03

Agents and advisers, general 0.00 0.00 4.55 0.00 0.00 4.55 £1,715.00 £376.92

Director/manager review, approval and signing 0.00 0.00 0.75 0.00 0.00 0.75 £180.00 £240.00

Other 0.00 1.00 0.50 1.00 0.25 2.75 £775.00 £281.82

Investigations

Directors' correspondence & conduct questionnaires 0.00 0.00 1.25 0.70 0.00 1.95 £468.00 £240.00

Statutory books and accounting records review 0.00 0.00 1.10 0.00 0.00 1.10 £264.00 £240.00

Investigation of legal claims 0.00 0.00 1.75 0.00 0.00 1.75 £420.00 £240.00


Realisation of assets

Debtors subject to invoice discounting/factoring 0.30 0.00 0.00 0.00 0.00 0.30 £162.00 £540.00

Debtors not financed (includes reassigned debtors) 0.00 0.00 1.10 0.00 0.00 1.10 £264.00 £240.00

Other chattel assets 0.00 0.00 0.60 1.75 0.00 2.35 £564.00 £240.00

Sale of business as a whole, including liaison with legal advisers agents etc 3.10 0.00 2.05 0.00 0.00 5.15 £2,285.00 £443.69

Completion of work in progress 1.50 0.00 0.00 0.00 0.00 1.50 £648.00 £432.00

Cash at Bank 0.00 0.00 0.10 0.80 0.00 0.90 £216.00 £240.00


Trading

Trading on decision and day 1-3 operations 13.00 0.00 20.95 0.75 0.00 34.70 £13,108.50 £377.77

Sales and customers 0.00 0.00 0.20 0.00 0.00 0.20 £76.00 £380.00

Purchasing/suppliers (not landlord) 0.60 0.00 7.25 0.00 0.00 7.85 £2,064.00 £262.93

Accounting 0.40 0.00 14.25 6.55 0.00 21.20 £5,837.50 £275.35

Insurances 0.00 0.00 0.85 0.00 0.00 0.85 £218.00 £256.47

Staff and payroll (inc PAYE/NIC for trading period) 2.55 0.00 7.85 2.05 0.00 12.45 £3,964.50 £318.43

Premises issues (inc landlord and site clearance) 0.90 0.00 0.60 0.00 0.00 1.50 £644.00 £429.33

Health & Safety 1.20 0.00 0.00 0.00 0.00 1.20 £648.00 £540.00


Other 0.00 0.00 18.60 2.15 0.00 20.75 £4,915.50 £236.89

Creditors

Fixed charge creditors 1.20 0.00 0.00 0.60 0.00 1.80 £792.00 £440.00

Floating charge creditors 0.50 5.00 0.85 0.00 0.00 6.35 £2,693.00 £424.09

Employees & pension (other) (Incl Jobcentre/CSA etc) 0.00 0.00 0.10 0.80 0.00 0.90 £230.00 £255.56

Unsecured creditors 0.00 0.00 0.85 5.25 0.00 6.10 £1,583.00 £259.51

Client Money (CASS Obligations) & Regulatory Reporting (FCA, HMRC & FSCS) 0.60 0.00 3.75 0.00 0.00 4.35 £1,434.00 £329.66


Other 0.00 0.00 6.15 0.00 0.00 6.15 £1,476.00 £240.00

Corporate Tax

Corporate Tax 1.00 0.00 0.00 0.00 0.00 1.00 £715.00 £715.00

Forensics

Forensics 0.00 0.00 15.50 3.00 0.00 18.50 £4,942.50 £267.16

Total 61.35 9.20 166.90 71.95 0.25 309.65 £100,837.00 £325.65

Hours


36

• Protection of Company’s assets and records (including electronic).

• Dealing with routine correspondence.

• Dealing with agents on general appointment matters, not relating to the sale of assets or correspondence

with advisers on investigation matters.

• Maintaining physical case files and electronics case details on IPS (case management software).

• Undertaking periodic case reviews

• Case bordereau and reviews.

• Case planning, administration and general case progression, including adjustments in appointment

strategy.

• Preparing reports to stakeholders, including but not limited to the administrators’ proposals.

• Travelling mainly derives from a visit by one of the joint administrators and a colleague to the Company’s

premises in Estonia.

• Maintaining and managing the appointment's cash book and bank accounts.

• Ensuring statutory lodgements and tax lodgements obligations are met.

• Providing regular updates to the FCA.

Investigations

• Commencing investigations into the reasons for the failure of the Company (including initiating enquiries

with the Company’s director).

• Review and storage of books and records.

• Preparing a return/report pursuant to the Company Directors’ Disqualification Act.

• Discussions and correspondence with relevant personnel and agents.

• Corresponding with the director informing them of their obligations, including the preparation of an SOA

Realisation of assets / Trading

This section is in relation to the realisation of the Company’s assets.

• Managing book debt collection.

• Meeting employees and explaining the administration process and its impact on them.

• Liaising with instructed agents with a view to agreeing potential sale of business and / or certain assets.

• Insurance of the assets and claims under policies where required.

• Miscellaneous asset realisation (i.e. cash at bank upon appointment).

• Monitoring the Company’s trading performance alongside staff who have been retained.

• Liaising with key stakeholders to ensure continuity of trade and maintaining an undertaking schedule.

• Dealing via telephone, email and face to face with a variety of stakeholders in the early days of the

administration for the purposes of ensuring continuity of including such matters as banking services, IT

services, and personnel engagement.

• Reviewing and approving regular payment runs.

• Regular posting of receipts and payments to accounting system.

• Preparing cash flow forecasts for the period of administration and updating it as matters progress.

• Preparing an estimated outcome statement for the administration.

• Employee matters, including redundancies.

• Working with the various banks and merchant services providers in order to ensure continuity of supply

and facilitate loan recoveries.

Creditors

• Dealing with creditor correspondence via email and telephone.

• Maintaining creditors’ information on our insolvency database.


37

• Working with the compliance team and our legal advisors in order to identify a redress methodology for

customers.

Shareholders

• Notifying shareholders of appointment

Corporate Tax

• Ensuring statutory lodgements and tax lodgements obligations are met.

Forensics

• Working alongside existing IT support infrastructure to ensure electronic systems and documentation is

retained safely for the purpose of meeting the administrators’ statutory requirements, as well as

exploring sale


38

VII Fees and costs estimate

Partner /

Director

Associate

Director

Manager /

Assistant

Manager

Other

professional

staff

Assistants &

support

staff

Total

hours

Time cost Average

hourly

rate

Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate


Administration and planning

Statutory returns, reports & meetings 8.30 0.00 26.00 35.80 3.50 73.60 £23,269.00 £316.15

Initial post-appointment notification letters, including creditors 19.20 3.50 7.10 35.60 0.00 65.40 £23,080.00 £352.91

Cashiering general, including bonding 2.50 0.00 9.00 22.05 5.00 38.55 £10,738.50 £278.56

Job planning, reviews and progression (inc 6 month reviews and planning meetings,

checklist & diary)23.70 4.20 32.65 26.45 0.00 87.00 £31,396.00 £360.87

Post-appointment taxation (VAT, PAYE/NIC, Corp Tax that are not trading related) 2.70 0.00 10.55 5.00 0.00 18.25 £6,667.00 £365.32

Protection of company records (incl electronic) 2.00 0.00 2.50 6.10 0.00 10.60 £3,494.00 £329.62

Insurance & general asset protection 2.60 0.00 3.25 5.55 0.00 11.40 £3,866.00 £339.12

Travelling 18.00 0.00 28.50 6.00 0.00 52.50 £19,400.00 £369.52

Agents and advisers, general 1.00 0.00 14.55 15.00 0.00 30.55 £9,655.00 £316.04

Director/manager review, approval and signing 1.00 0.00 5.75 0.00 0.00 6.75 £2,620.00 £388.15

Other 0.50 1.00 4.50 7.00 2.75 15.75 £4,255.00 £270.16

Investigations

Directors' correspondence & conduct questionnaires 1.00 0.00 5.25 8.70 0.00 14.95 £4,448.00 £297.53

Creditor & shareholder complaints 1.50 0.00 10.00 15.00 0.00 26.50 £8,210.00 £309.81

Statutory books and accounting records review 1.00 0.00 5.10 10.00 0.50 16.60 £4,774.00 £287.59

Investigation of legal claims 1.00 0.00 4.75 5.00 0.00 10.75 £3,300.00 £306.98

SIP2 and SIP4 Obligations (inc CDDA86 Forms) 1.00 0.00 3.00 7.00 0.00 11.00 £3,360.00 £305.45



Fixed charge Property (land and buildings) 10.00 0.00 0.00 5.00 0.00 15.00 £6,600.00 £440.00

Fixed Charge other (e.g. chattel mortgages) 3.50 0.00 2.50 4.00 0.00 10.00 £3,800.00 £380.00

Debtors subject to invoice discounting/factoring 1.30 0.00 0.00 0.00 0.00 1.30 £702.00 £540.00

Debtors not financed (includes reassigned debtors) 1.00 0.00 11.10 25.00 0.00 37.10 £10,604.00 £285.82

Other chattel assets 2.00 0.00 4.60 5.75 0.00 12.35 £4,124.00 £333.93

Sale of business as a whole, including liasison with legal advisers agents etc 9.10 0.00 9.55 10.00 0.00 28.65 £10,775.00 £376.09

Completion of work in progress 3.50 0.00 0.00 0.00 0.00 3.50 £1,728.00 £493.71

Cash at Bank 0.50 0.00 5.10 6.80 0.00 12.40 £3,826.00 £308.55

Liasining with agents (general) 2.00 0.00 5.00 12.00 0.00 19.00 £5,860.00 £308.42

Sale of business - post completion matters 2.00 0.00 8.00 3.50 0.00 13.50 £4,960.00 £367.41

Director/manager review, approval and signing 1.00 0.00 6.30 0.00 0.00 7.30 £2,892.00 £396.16

Trading

Trading on decision and day 1-3 operations 18.00 0.00 40.95 5.75 0.00 64.70 £24,608.50 £380.35

Sales and customers 0.00 0.00 0.20 0.00 0.00 0.20 £76.00 £380.00

Purchasing/suppliers (not landlord) 1.60 0.00 25.25 5.00 0.00 31.85 £10,644.00 £334.19

Accounting 1.40 0.00 32.25 16.55 0.00 50.20 £15,617.50 £311.11

Insurance 1.00 0.00 10.85 3.00 0.00 14.85 £5,278.00 £355.42

Staff and payroll (inc PAYE/NIC for trading period) 3.55 0.00 17.85 7.05 0.00 28.45 £9,504.50 £334.08

Property issues (inc landlord and site clearance) 1.90 0.00 5.60 0.00 0.00 7.50 £3,084.00 £411.20

Health & Safety 2.20 0.00 8.00 4.00 0.00 14.20 £5,188.00 £365.35

Director/manager review 1.00 0.00 0.45 0.00 0.00 1.45 £648.00 £446.90

Other 3.00 0.00 31.10 10.15 0.00 44.25 £13,205.50 £298.43

Creditors

Fixed charge creditors 9.20 0.00 12.00 8.60 0.00 29.80 £11,592.00 388.99

Floating charge creditors 1.00 5.00 0.85 0.00 0.00 6.85 £2,963.00 432.55

Employees & pension (other) (Incl Jobcentre/CSA etc) 1.25 0.00 8.10 6.80 0.00 16.15 £5,385.00 333.44

Crown (not RPO etc) 1.00 0.00 8.00 6.00 0.00 15.00 £5,020.00 334.67

Unsecured creditors 3.00 0.00 10.85 30.25 0.00 44.10 £13,003.00 294.85

Distributions for prefs and unsecured 2.00 0.00 2.50 5.00 0.00 9.50 £3,230.00 340.00

Case Secific - Creditors 1.60 0.00 6.25 5.00 0.00 12.85 £4,124.00 320.93

Director/manager review 0.00 0.00 0.50 0.00 0.00 0.50 £120.00 240.00

Other 0.00 0.00 16.15 10.00 0.00 26.15 £7,676.00 293.54

Shareholders

Shareholder general communications 1.00 0.00 3.00 0.00 0.00 4.00 £1,680.00 420.00

Other 1.00 0.00 2.00 0.00 0.00 3.00 £1,300.00 433.33

Corporate Tax

Corporate Tax 6.00 0.00 6.00 5.00 1.50 18.50 £7,045.00 380.81

Forensics

Forensics 3.00 0.00 30.50 15.50 0.00 49.00 £15,262.50 311.48

Total 186.60 13.70 503.90 425.95 13.25 1,143.40 £384,682.00 £336.44

Hours

Statutory compliance, reporting to stakeholders, accounting, protecting company records, travelling, bonding, case set-up, planning/reviewing and filing

Reviewing books, records and antecedent transactions, accessing directors' conduct and reporting to the Disqualification Unit and liaising with creditors (or the Committee)

Identifying, securing, insuring assets, dealing with assets subject to retention of title and debt collections, Property, business and asset sales

Management of operations, Accounting for trading, On-going employee issues

Communication with creditors, Creditors' claims (including employees and other preferential creditors and the Crown), dealing with the Prescribed part (if applicable), adjudicating and

distributing

Shareholder communications and distributions


39

Explanation of the above categories

Administration and Planning

This section of the analysis encompasses the cost of the office holders and their staff in complying with their statutory obligations, internal compliance requirements, and all tax matters.

This work includes the following:

Preparing the documentation and dealing with the formalities of appointment.

Statutory notifications and advertising.

Protection of company’s assets and records (including electronic).

Dealing with routine correspondence.

Dealing with agents on general appointment matters, not relating to the sale of assets or correspondence with advisers on investigation matters.

Maintaining physical case files and electronics case details on IPS (case management software).

Case reviews (including 6 month reviews).

Case bordereau and reviews.

Case planning; administration; and general case progression, including adjustments in appointment strategy.

Preparing reports to stakeholders.

Maintaining and managing the appointment's cash book and bank accounts.

Ensuring statutory lodgements and tax lodgements obligations are met.

Submitting VAT returns and Corporation Tax returns (when due).

Dealing client identification and internal Smith & Williamson LLP compliance requirements.

Investigations

Investigations include work carried out as a consequence of the obligations placed upon us to investigate the Company’s affairs. The work undertaken is that described in SIP2 and SIP4

which govern both the investigations of the Company’s failure and also examine the conduct of the directors. This work includes the following:

Investigating the reasons for the failure of the Company (including enquiries with the company’s directors and possible interviews of key stakeholders).

Review and investigation of stakeholders’ complaints and responses into the failing of the business and actions of company’s directors.

Review and storage of books and records.

Asset tracing (including land registry and company searches).

Possible actions (including legal recourse) to restore assets of the company, or compensate the company for the financial losses incurred.

Preparing a return/report pursuant to the Company Directors’ Disqualification Act.

Discussions and correspondence with relevant personnel and agents.


This section is in relation to the realisation of the Company’s assets, which is explained in detail through the contents of our report. [A significant amount of time may be spent in relation

to the sale of the assets of the Company, which may also be allocated to trading]. The work generally includes the following:

Liaising with secured chargeholders in respect of the sale of assets subject to their security.

Liaising with the interested parties and prospective purchasers.

Discussions with our sales agents including in respect of the most appropriate sales strategy and tactics to conclude the sale as soon as reasonably practicable.

Sales negotiations, including sales contract negotiations and drafting.

Discussions with our legal advisors in respect of sales documentation and subsequently in relation to tax matters.

Sourcing information necessary for the sale.

Book debt collection, management and assignment if subject to finance.

Insurance of the assets, and claims under policies if required.

Miscellaneous asset realisation (i.e. cash at bank), outlined in the contents of the report.

Dealing with certain VAT and tax matters relating to the sales process. This includes sourcing certain records (which may not be available at the time of any sale).

Trading

In order to achieve a better realisation of the Company’s assets and to maintain the goodwill of the business the office holders may have continued to trade the business.

Detailed below is a breakdown of time spent in relation to trading:

Overseeing the work of managing agents or existing management and staff and reconciling records. This represents a major proportion of the time incurred under the sub-headings

“accounting” and also “other”. On certain occasions financial information provided was not consistent and also required further investigations to resolve particular matters.

Those matters recorded under the sub category “other” are:

– Regular monitoring of trading activities including weekly monitoring meetings

– Preparing, reviewing and presenting trading update reports

– Reviewing the trading information provided by managing agents or existing management and staff.

Particular matters that were recorded under the “accounting” sub category are

– Reconciling case receipts and payments to records provided

– Ensuring that VAT was appropriately accounted for

– Discussing with staff and management on trading

– On-going discussion and meetings regarding the provision of information to the office holders' team.

Some matters were recorded under both categories from time to time; and so both sub-categories (of “accounting” and “other”) should be reflected upon jointly.

Approving payments to suppliers and staff.

Dealing with customers and suppliers including landlords.

Ensuring that business adheres / conforms to legislation (e.g. Health & Safety legislation, and Employment law)

Creditors

Work under this section includes correspondence and other contact with the creditors of the Company. The work includes the following:

Dealing with creditor correspondence via email and telephone.

As the Company’s business was being traded during the period of office it was necessary to maintain a dialogue with certain key stakeholders as a result certain

dialogue may relate to trading activities

Preparing reports to chargeholders.

Maintaining creditors’ information on our insolvency database.

Maintaining employee claims and liaising with Job Centre, Redundancy Payments Services etc.

Adjudicating of creditor claims including matters of ROT (where applicable)

Distributions to various categories of creditors.

Shareholders

Work under this section includes correspondence and other contact with the creditors of the Company. The work includes the following:

Maintaining members’ information on IPS.


40

The amount relating to employee costs, other trading expenses, and legal fees may be significantly less

dependent upon the time and costs:

• taken to wind down the book

• necessary to devise and implement a redress methodology. The administrators are mindful of the cost

benefit of this, and the extent that costs will potentially reduce down the cash available to pay

creditors, and in particular bondholder and unsecured (such as redress) creditors

• to agree the loan assignment position with Mintos

Estimated expenses in accordance with SIP 9 which are payable to third parties.

Please note that these are estimates based on current known information and are likely to change.

Trading expenses £'000

Employee costs (including taxes) 1,088

Rent 79

IT and associated costs 62

Banking costs 79

Other trading expenses 61

Other expenses

Legal fees 200

Agent's fees 8

Statutory costs (bonding / advertising) 1

Irrecoverable VAT 72

Total 1,650


41

VIII Staffing, charging,

subcontractor and adviser policies

and charge out rates

Introduction

Detailed below are:

• S&W’s policies in relation to:

- Staff allocation and the use of subcontractors

- Professional advisers

- Disbursement recovery

• S&W’s and S&WFS’ current charge out rates

Staff allocation and the use of subcontractors

Our general approach to resourcing our assignments is to allocate staff with the skills and experience to meet

the specific requirements of the case.

The constitution of the case team will usually consist of a partner and a partner or director or associate

director as joint office holders, a manager, and an administrator or assistant. The exact constitution of the

case team will depend on the anticipated size and complexity of the assignment and the experience

requirements of the assignment. The charge out rate schedule below provides details of all grades of staff

and their experience level.

We may use subcontractors to perform work which might ordinarily be carried out by us and our staff where

it is cost effective to do so and/or where the specific expertise offered by the subcontractor is required.

Details of any subcontractors’ services utilised in the period covered by this report are set out in the body of

this report.

Use of professional advisers

We select professional advisers such as agents and solicitors on the basis of balancing a number of factors

including:

• The industry and/or practice area expertise required to perform the required work.

• The complexity and nature of the assignment.

• The availability of resources to meet the critical deadlines in the case.

• The charge out rates or fee structures that would be applicable to the assignment.

• The extent to which we believe that the advisers in question can add value to the assignment.

S&WFS

S&WEBC is a pensions consultancy firm which specialises in providing advice to Insolvency Practitioners on

their appointment in relation to all aspects of pensions. It is a division of S&WFS, a company associated with

S&W.

S&WEBC may be engaged to deal with the Company’s pension affairs. Payments to parties in which the joint

administrators or their firm have an interest must be disclosed to, and approved by, creditors. Fees for their

services are accrued on a time costs basis. Consequently, details of the charge out rates for S&WEBC are

provided to creditors.


42

Disbursements

Category 1 disbursements do not require approval by creditors. The type of disbursements that may be

charged as a Category 1 disbursement to a case generally comprise external supplies of incidental services

specifically identifiable to the case, such as postage, case advertising, invoiced travel and external printing,

room hire and document storage. Also chargeable will be any properly reimbursed expenses incurred by

personnel in connection with the case.

Category 2 disbursements do require approval from creditors. These are costs which are directly referable

to the appointment in question but are not payments which are made to an independent third party and may

include shared or allocated costs that can be allocated to the appointment on a proper and reasonable basis

such as internal room hire, document storage or business mileage.

Since 7 July 2012 S&W’s policy is to recover only one type of Category 2 disbursement, namely business

mileage at HMRC’s approved mileage rates at the relevant time. Current mileage rates are 45p per mile plus

5p per passenger per mile. Prior to 7 July 2012 approval may have been obtained to recover other types of

Category 2 disbursements.

Details of any Category 2 disbursements incurred and/or recovered in the period covered by this report are

set out in the body of this report.

Charge out rates

The rates applicable to this appointment are set out below. There have been no changes to the charge out

rates during the period of this report however, rates are subject to an annual review on 1 July.

Smith & Williamson LLP

Restructuring & Recovery Services

Charge out rates as at 1 July 2019

London office

£/hr

Regional

offices

£/hr

Partner / Director 470-540 376-432

Associate Director 440 352

Managers 270-380 216-304

Other professional staff 180-380 144-192

Support & secretarial staff 100 80

Notes

1. Time is recorded in units representing 3 minutes or multiples thereof.

2. It may be necessary to utilise staff from both regional and London offices, subject to the

requirements of individual cases.

3. The firm's cashiering function is centralised and London rates apply. The cashiering function time

is incorporated within “Other professional staff” rates.

S&WFS Employee Benefits Consultancy

Charge out rates from 1 July 2019

Per hour

£

Director 245 - 349

Associate Director 204 – 244


43

S&WFS Employee Benefits Consultancy

Charge out rates from 1 July 2019

Per hour

£

Manager 139 - 195

Administrator 88 - 170


Corporate Tax


London office

£/hr

Partner / Director 575-690

Associate Director 460

Managers 245-400

Other professional staff 115-210

Support & secretarial staff 60


Forensics


London office

£/hr

Partner / Director 470

Managers 320-410

Other professional staff 240


44

www.smithandwilliamson.com

Principal offices: London, Belfast, Birmingham, Bristol, Cheltenham, Dublin, Glasgow, Guildford, Jersey, Salisbury and Southampton.

Smith & Williamson LLP is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business

activities. A member of Nexia International. Registered in England at 25 Moorgate, London EC2R 6AY No OC369871.

Nexia Smith & Williamson Audit Limited is registered to carry on audit work and regulated by the Institute of Chartered Accountants in

England and Wales for a range of Investment business activities. A member of Nexia International.

Smith & Williamson is a member of Nexia International, a worldwide network of independent accounting and consulting firms.

cash on go limited (in administration)€¦ · 5. purpose of administration and strategy 6 6. joint...

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