Amount owed to Network Data ARs still unquantified
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Network Data’s administrator Baker Tilly has admitted today that despite spending the bulk of its time assessing the claims of the unsecured creditors of Network Data Limited, the scale of the total amount of claims is still unquantified.
In an update report posted on Companies House today, the administrator reiterated that the payment of a dividend to unsecured creditors, who represent the the defunct network’s appointed representatives, remains critically dependent upon the secured creditor and preferential creditors getting paid in full.
The itemised breakdown of the administrator’s bill at the end of the report, shows that the bulk of its time has been spent on the unsecured creditors of NDL. Its bill for the time spent working on the unsecured creditors alone is £30,695, at an hourly rate of £200. By comparison the administrator’s bill for the unsecured and preferred creditors alone was £1,600.
But the report shows that the secured creditor, Bank of Scotland who owned the mortgage on the network’s lavish HQ in Surrey, Botleys Mansion, received £3.25m from the sale of the property on September 21.
The property was sold to a wedding events firms for £3.8m, of which £3.55m was received for the property and £250,000 for the fixtures and furniture.
Baker Tilly estimates that preferential creditors, who are the former network’s staff who have outstanding unpaid wages and holiday time, are owed £105,000 and £1,600 respectively.
Although it could not confirm over what time period the sums would be paid as a result of tax issues, the administrator says it expects this debt to paid in full.
For the unsecured creditor of Network Data Holdings, which was the firm’s trading name on the London Stock Exchange, the administrators do not expect any distribution being made to them.
In the update, the administrator also justifies the deal it struck with Phoenix Financial Advisers, under which Pheonix bought the rights to collect the commissions due to ARs of NDL and MBSL and share the revenues with the administrator on a formula basis.
The administrator says: “Without such an agreement the Administrators would be unable to realise any of the benefit in this income owing to the fact that FSA approvals had been withdrawn and therefore product providers would not be able to pay sums due to NDL and MBSL.
“Equally, we obtained legal advice that under the terms of the Companies contracts with the product providers, the product providers were not able to pay the ARs commission directly.”
It adds: “For these reasons, and in order to realise value in the commission income stream in the interests of the Companies’ creditors as a whole, the Administrators entered into the agreement with Phoenix.”
It goes on to say that it is too early to predict the level of revenues to be earned from the income sharing agreement, but initial indications are encouraging.
Readers' comments (5)
Gordon Mitchell | 23 Dec 2009 2:12 pm
I am afraid that I shall not hold my breath waiting for the Administrators to pay what is owed to me. They continue to collect the commissions paid by product providers on renewal business that I introduced to NDL, which as far as I am concerned I am entitled to. The law is an ASS. I am being shafted by the law which only serves to benefit the large companies involved, the FSA, and the Administrators (look at their bill charged at £200 an hour). Unfortunately I can't rebroke the business elsewhere as I have now retired early and am no longer regulated. At least Dick Terpin wore a mask and carried a gun; you knew he was a highway robber!!
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Anonymous | 23 Dec 2009 2:20 pm
Forgive my ignorance, but am I understanding this correctly - my unpaid pipeline commission currently being held by lenders and insurers (with whom I am still working through a new network), has now been given to Phoenix. Why could this not be paid to me through my new network? With the greatest respect to both the FSA and Baker Tilly, it is clear that neither could give a monkey's when it comes to helping the brokers and advisers who have been shafted by Network Data. In fact I would call it legalised mugging. Looking at the bigger picture, The Network Data staff who helped to rob us will be paid in full. Royal Bank of Scotland will be paid in full. The Directors of Network Data have already been paid in full. The FSA continue to be paid in full, and Baker Tilly seem to be doing exceptionally well out of the whole process. Please do pass on my best wishes to all at Baker Tilly and thank them all for their fine work. I look forward to their next very expensive report, which will no doubt confirm that any money which was due to me has actually been used on their Christmas Party. Merry Christmas
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Anonymous | 24 Dec 2009 10:04 am
The reason your commission cannot be paid through your new Network is because they would also have to take on your previous liabilities and there isn't a Network in the land that would be prepared to do this. The only way to obtain commissions from business written under a prior Network is to go DA and take the liabilities on yourself. The problem with doing this now, is there is a 3/6 month wait with the FSA for DA applications and even then the Provider would need permission from your old Network to release the commission to you. I'm not so sure how you would get around that problem.
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Anonymous | 24 Dec 2009 8:16 pm
Why has so much time been dedicated to the unsecured creditors when Baker Tilly admit they cannot pay the AR`s like it has been said the people that earned money for NDL (the AR`s) are the ones that will lose out. Most of the AR`s will no doubt be re-broking insurance and earning again when advisable to clients. A sorry mess that the FSA could have sorted out at one stroke if they had the sense to do so! But hey this is the FSA, hopefully next year they wont be in a position to do anything if David C has his way.
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Anonymous | 29 Dec 2009 12:31 pm
The more expensive baker tilly boys are on £470 an hour I think I may take my time also. After taking many of our companies down with them and the rest having been damaged at a time that they cannot afford to be damaged its a sorry affair all around but we just must move on.
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