Administration costs for clearing up the aftermath of the Cobbetts collapse in 2013 have topped £1m, new documents have revealed.
A third progress report into the administration shows administrator KPMG incurred £1.084m in costs up to 6 June.
In the six months previous to 6 June, the accountancy firm, appointed in January 2013, also billed a further £300,000 in expenses, including £235,000 in administrators’ fees.
The report also reveals that administrators have secured a clause in the sale and purchase agreement granting them 25% of any money collected from the remains of the Cobbetts business that exceed £9.4m.
By June, realisations were £387,000 over that threshold, entitling administrators to £95,000.
Cobbetts was sold in a pre-pack administration to national firm DWF, owing around £91.6m to unsecured creditors.
To date, £3.9m has been received as part of the sale of the business and certain assets.
It is expected that the fixed and floating secured creditor, Lloyds Bank, will receive payment in full for the secured element of its debt, with any preferential creditor also repaid in full.
At the date of the administrators’ appointment, Cobbetts owed around £7.3m to Lloyds, of which around £2.3m is secured. The bank agreed to release security on 50% of funds owed to avoid ‘disproportionate’ legal costs.
As for the unsecured creditors, the picture remains unclear. A creditors’ committee was formed in April and remains in place.
Creditors approved an extension of the administration period in December, which will automatically terminate on 5 August.
The administrators’ report says they will shortly be in a position to conclude the administration and move the LLP into liquidation.
They wrote to unsecured creditors on 20 June to advise that they are more likely to receive additional realisations if an alternative liquidator is appointed.
Lyn Vardy and Toby Underwood of PricewaterhouseCoopers were recommended, and a vote closed on 8 July to approve their appointment.