REG - ReNeuron Group plc - Publication of Joint Administrators' Proposals
17/05/2024 13:00
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RNS Number : 9519O ReNeuron Group plc 17 May 2024
17 May 2024
ReNeuron Group plc
("ReNeuron" or the "Company")
Publication of Joint Administrators' Proposals
ReNeuron Group plc (in administration) (AIM: RENE), a UK based leader in stem
cell derived exosome technologies, announces that Mark Smith and Stephen Cork
of Cork Gully LLP, joint administrators of the Company and of its
subsidiaries, ReNeuron Limited, ReNeuron (UK) Limited ReNeuron Holdings
Limited (together the "Group") (all in administration) have issued their
statement of proposals to the members and creditors of the Group in accordance
with the Insolvency Act 1986 and the Insolvency Rules (the "Proposals").
The contents of the main body of the Proposals (without appendices) are set
out below without material amendment. A hard copy of the Proposals, including
appendices, can be obtained upon request by contacting the joint
administrators using the details noted below.
Enquiries:
Cork Gully LLP +44 (0)20 7268 2150 or
Stephen Cork, Joint Administrator reneuron@corkgully.com
Mark Smith, Joint Administrator
ReNeuron www.reneuron.com/investors (http://www.reneuron.com/investors)
Iain Ross, Executive Chairman Via Walbrook PR
Allenby Capital Limited (Nominated Adviser and Broker) +44 (0)20 3328 5656
James Reeve/George Payne/Dan Dearden-Williams (Corporate Finance)
Stefano Aquilino/Kelly Gardiner (Sales & Corporate Broking)
Walbrook PR (Media & Investor Relations) +44 (0)20 7933 8780 or reneuron@walbrookpr.com
(mailto:reneuron@walbrookpr.com)
Paul McManus / Alice Woodings +44 (0)7980 541 893 / +44 (0)7407 804 654
ReNeuron Group plc
ReNeuron Limited
ReNeuron (UK) Limited
ReNeuron Holdings Limited
(all in Administration)
(together "the Group")
Joint Administrators' Proposals
Glossary
Abbreviation Definition
AIM Alternative Investment Market, a sub-market of the London Stock Exchange
Air Products Air Products Plc
Allenby Allenby Capital Limited
Amicus Amicus Clinical Development Limited
Axis Axis Bioservices Limited
CBO Chief Business Officer
CFO Chief Financial Officer
COO Chief Operations Officer
Cork Gully Cork Gully LLP
Courts Trustees Courts Trustees Limited
Covington Covington & Burling LLP
CPA CPA Global Limited
CSO Chief Scientific Officer
De Pinna De Pinna LLP
Elkington Elkington and Fife LLP
Evolve Evolve IS Limited
FW Fox Williams LLP
Gallagher Arthur J Gallagher Insurance Brokers Limited
Gordon Brothers Gordon Brothers International, LLC
HMRC H M Revenue and Customs
Hosts Hosts-Un Limited
IG Isadore Goldman Limited
IP Intellectual property
Joint Administrators Stephen Cork and Mark Smith of Cork Gully LLP
Matrix Matrix Workplace Services Limited
Prescribed part Prescribed part of the net property
RGP ReNeuron Group Plc - In Administration
RHL ReNeuron Holdings Limited - In Administration
RL ReNeuron Limited - In Administration
RNS Regulatory News Services
RUKL ReNeuron (UK) Limited - In Administration
SDT SDT Limited
SoA Statement of Affairs
The Board(s) The Board(s) of Directors
The Group The entities in Administration being RGP, RL, RUKL and RHL
Thermo Electron Thermo Electron Limited
Unchained Labs Unchained Labs, LLC
WG WG Partners LLP
Executive Summary
Joint Administrators Mark Smith and Stephen Cork were appointed as Joint Administrators of the
Group by the respective Boards on 20 March 2024
Purpose of the Administrations The purpose of the Administrations is to, in the first instance, rescue the
Group as a going concern.
Should the above not be achievable, the Joint Administrators will seek to
achieve a better result for the Company's creditors as a whole than would be
likely if the Group were wound up (without first being in Administration).
Should both of the above objectives fail, the Joint Administrators will take
steps to realise assets in order to make a distribution to one or more
preferential creditors.
Further information is available in Section 3.
Joint Administrators' strategy RGP is the AIM-listed parent company of RL, RUKL and RHL. The Group is
involved in drug research and development and has historically relied
primarily upon investor funds provided by way of equity investments into RGP.
The non-cash assets are primarily held by RL and comprise tangible and
intangible assets, notably laboratory equipment and intellectual property,
respectively.
The Joint Administrators are progressing negotiations with investor(s) to
allow for continuity of the Group's operations. Alternatively, an acquisition
of all or part of the Group, or its business and/or assets, is also being
explored. The Joint Administrators have sought to preserve value for a
prospective investor or purchaser by retaining key employees and ensuring the
continuation of critical services.
Approval of the proposals The approval of the proposals will be voted on through a decision by
correspondence procedure.
Please refer to Section 13 for more information.
Estimated timescale At present it is not anticipated that an extension will be required for the
Administration of any of the Companies in the Group, and all Administrations
are expected to be closed within 12 months from the date of appointment. In
the event that this position changes, the Joint Administrators will notify
creditors as soon as reasonably practicable.
Estimated costs Fixed fees of £300,000 for RGP and £300,000 for RL for work undertaken and
expected to be undertaken in the Administrations are proposed in addition to
5% of all gross realisations of intangible assets owned by RL should it not be
viable for the Group to continue on a going-concern basis.
There are currently no fees proposed in relation to the Administrations of
RUKL and RHL.
Estimated outcome for creditors The Group has no known secured creditors.
All agreed creditors will be paid in full by the Group should it continue its
operations on a going concern basis.
In the event that the rescue of the Group on a going concern basis cannot be
achieved, it is currently estimated that the return to both preferential and
secondary preferential creditors of RGP and RL will be 100p in the £.
In such a scenario, it is also currently anticipated that there will be
sufficient asset realisations to pay unsecured creditors out of a liquidation
process. The quantum of such a payment cannot be determined at the moment and
further updates will be provided at a later point.
Proposals The Joint Administrators' Proposals for the Administrations of the Group are
set out in Section 12.
These Proposals are delivered to creditors on 15 May 2024.
Joint Administrators' Proposals
On 20 March 2024, Mark Smith and Stephen Cork were appointed Joint
Administrators of the Group.
This report is addressed to the creditors and members of the Group and
incorporates the Joint Administrators' Proposals. All known creditors have
been informed that future documentation relating to the Administration would
be placed on the Cork Gully website portal without further notice. However,
should you require a hard copy please contact our office and it will be sent
to you.
These Proposals are provided in relation to the Group, which comprises the
following four companies:
― RGP;
― RL;
― RHL; and
― RUKL.
The Group has two other subsidiaries, ReNeuron Ireland and ReNeuron Inc.,
domiciled in Ireland and the US respectively. The Joint Administrators
understand that both of these subsidiaries are dormant and hold no assets with
the exception of a small rental refund due to the US entity. The Joint
Administrators will determine whether these subsidiaries will be closed or
maintained on a going concern basis depending on the outcome of their
discussions with potential investors or other interested parties. A Group
structure chart can be found in Appendix I.
1. Statutory Information
The statutory information relating to the Group is attached at Appendix I.
2. Circumstances Leading to the Appointment of the Joint Administrators
2.1. Background of the Group
Creditors should note that, unless otherwise stated, this section of the
proposals has been prepared based on information provided by the Directors of
the Group and from the books and records of each company, as opposed to the
personal knowledge of the Joint Administrators.
The Group originally operated from premises in Guildford in England. However,
in 2013, the Company secured equity investment and a grant package from the
Welsh Government. The repayable grant, up to a maximum of £500,000,
stipulated the creation of 43 jobs, which was subsequently revised down to 40
jobs. On this basis RL was to receive a grant amount of £457,423.00, which
was paid on 15 January 2019.
The total headcount reached a peak of 49, subsequently reducing primarily due
to the Covid-19 pandemic. The Group's headcount averaged 37 for the period
April 2016 to January 2024.
As part of this support from the Welsh Government, the Group announced its
intention in 2014 to relocate to a purpose-built premise in Pencoed, Wales
containing its headquarters, laboratories and manufacturing facilities. The
Group eventually completed this move in 2016. The Group's key focus as at the
date of the Administrations is on the CustomEx Exosome Technology Platform,
producing Exosomes with unique tissue targeting tropisms to deliver a payload
of choice to a preferred cell type.
Its strategy is to develop Exosome therapeutics for diseases with significant
unmet needs, such as:
― Disability as a result of stroke; and
― The blindness causing disease, retinitis pigmentosa.
The Group uses unique stem cell technologies to develop cell-based therapies
for disease conditions where cells can be readily administered "off-the-shelf"
to eligible patients without the need for additional immunosuppressive drug
treatments.
Within the Group, each of the companies currently in Administration has the
following functions:
― RGP
Funds were raised by public investment into RGP and, as part as the normal
course of business, monies were transferred in the form of intercompany loans
to RGP's subsidiaries to fund their operations.
― RL
RL is the operating entity of the Group, where a substantial majority of the
assets, other than cash, and employees are held. Its operations were funded by
RGP as described above.
― RUKL and RHL
Both companies are dormant with no significant assets or known liabilities.
RHL had initially been incorporated with the intention of acting as the
holding company of the Group. However, this did not come to fruition.
2.2. Reason for Insolvency
The Group has been loss-making since incorporation, being funded by way of
public investment and a government grant through RGP. The other companies in
the Group were funded by intercompany loans from RGP, which would then be
written off on an annual basis.
In July 2021, Iain Ross was appointed Non-Executive Chairman of the Group and,
following Olav Hellebø's resignation as CEO in February 2022, he became
Interim Executive Chairman until the appointment of Catherine Isted as CEO in
September 2022. Also, in September 2022, there was a number of changes to the
senior management team. John Hawkins assumed the role of CFO and joined the
Group's Boards; Dr Randolph Corteling assumed the role of CSO; Suzanne Hancock
was appointed COO; and Simon Dew joined the Group as CBO. In December 2022,
following Catherine Isted's resignation, Iain Ross was appointed Executive
Chairman and a new lower operating cost model was implemented. More
information on this can be found in Section 4.
In January 2023, the Group undertook a restructuring of the business, reducing
the headcount by approximately 40% and lowering the costs of business, which
it forecast would enable it to continue to operate until mid-2024. At the same
time, there was a strategic shift away from clinical development programmes to
the exosome platform.
During 2023, the Boards regularly reviewed the consolidated financial position
and undertook solvency assessments. Efforts were concurrently focused on
garnering pre-clinical data for the exosome platforms. The intention was to
raise equity funds from interest in positive pre-clinical data. Such data
became available in October 2023 and, in November 2023, the Group entered
discussions with advisers and potential investors to gauge interest. However,
it became clear that the market was not receptive at the time, so it was
agreed by the board and its advisers to postpone raising funds until early
2024.
In March 2024, further funding had yet to be secured and, as a result of the
continued uncertainty over the valuation of certain consolidated accruals for
liabilities, the board took the decision to place the Group into
Administration.
The Joint Administrators understand from the Group's Boards and management
team that the two key factors leading to the Group being placed into
Administration are as follows:
― An inability to secure funding from potential investors; and
― An inability to confirm potential legacy liabilities.
2.3. Summary of the Group's Recent Trading Performance
A summary of the Group's recent trading performance is at Appendix II.
2.4. Pre-appointment considerations
Cork Gully were approached by the Boards on 25 January 2024 to have
preliminary discussions as to the Group's current financial position. The
following work was undertaken prior to the appointment of the Joint
Administrators:
― Advisory Work
Prior to the decision to place the Group into Administration, Cork Gully
provided the following advisory services:
- Advising the board as to the duties and responsibilities of the
Directors, the range of options available to the Group, including
Administration and other alternatives;
- Recommendations as to the appropriate action to be taken should
access to additional funding not be possible;
- General advice on an ad-hoc basis to address concerns regarding
liquidity; and
- Attendance of meetings of the Boards, upon request.
― Pre-appointment work to place the Group into Administration
Following the decision to place the Group into Administration, the Joint
Administrators undertook the following services:
- Advising and assisting the board in relation to the Group's
affairs and business prior to the Joint Administrators' appointment;
- Liaising with relevant professional advisors to advise on matters
relating to how to best further the purpose of Administration;
- Advising and assisting the Group in relation to discussions and
negotiations with potential investors and purchasers of the Group's business
and/or assets; and
- Assisting the Board in dealing with the formalities of compiling
the relevant documentation to place the Company into Administration and
liaising with solicitors instructed to assist in completing such formalities.
Having considered the extent of their prior involvement with the Group in
light of the Insolvency Code of Ethics, the Insolvency Practitioners of Cork
Gully had not, prior to their appointment as Administrators, identified any
threats to their objectivity and were, therefore, able to act objectively as
Joint Administrators.
3. Objectives of the Administration and the Joint Administrators'
Strategy for Achieving them
The Joint Administrators are officers of the Court and must perform their
duties in the interests of the creditors as a whole in order to achieve the
purpose of the Administrations. The purpose of the Administrations is to
achieve one of the three objectives set out in insolvency legislation to:
a) rescue the Group as a going concern; or
b) achieve a better result for the Group's creditors as a whole than
would be likely if the Group were wound up (without first being in
Administration); or
c) realise property in order to make a distribution to one or more
secured or preferential creditors.
The Joint Administrators have a wide range of powers, as set out in insolvency
legislation, and must perform their functions as efficiently as is reasonably
practicable.
The Joint Administrators are required to act in the interests of the creditors
of the Group as a whole, unless the third objective is being pursued. In that
instance, the Joint Administrators must ensure they do not unnecessarily harm
the interests of the creditors of the Group as a whole.
The primary purpose of the Administrations is objective a) above, i.e. rescue
the Group as a going concern. The Joint Administrators aim to achieve this by
raising sufficient funds to rescue the, or part of the, Group.
If discussions with interested parties do not progress sufficiently to achieve
objective a), the Joint Administrators have set a contingency plan to seek to
achieve objective b) by facilitating a sale of the business and/or assets out
of Administration. This is expected to yield a better return for the benefit
of creditors compared to a piecemeal asset sale.
If, however, there is no suitable interest in acquiring the business and/or
assets out of Administration, the Joint Administrators will take steps to
achieve objective c) by realising assets on a piecemeal basis to make a
distribution to one or more preferential creditors.
It should be highlighted that, despite being dormant companies, RHL and RUKL
were placed into Administration alongside RGP and RL, as opposed to separate
liquidation processes, to preserve value for the Group as a whole. It was
unclear whether there was material value in the two companies prior to the
Administration, whilst the Joint Administrators did not wish to render them
inaccessible for any interested parties that would potentially want to invest
in or acquire the entire Group. It was thus deemed that this approach would
increase the probability of achieving objective a) as outlined above.
The insolvency legislation has set a 12-month maximum duration for
Administrations, unless the duration is extended by the Court or creditors. If
the Joint Administrators are unable to complete the Administration of any of
the Companies within the Group within 12 months, then they will either apply
to the Court, or seek a decision from the creditors to extend the duration of
the Administration(s).
4. Implementation of the Joint Administrators' Strategy
4.1. Raising sufficient funds to rescue the, or part of the, Group as a going
concern
Following their appointment, the Joint Administrators took steps to liaise
with the Group's Boards and senior management to determine the viability of
raising investment to facilitate the Group exiting Administration and continue
as a going concern.
The Joint Administrators also took steps to discuss the position with the
Group's corporate broker, Allenby, as well as its corporate advisers, WG.
During the course of these discussions, it was made clear to the Joint
Administrators that there was a consistent view that, in order to achieve this
outcome, the Group would need to:
― Present a clear, new business plan (2.0) outlining the Group's
funding requirement, its key goals, and its data inflection point for
investors;
― Lower its current operating costs which were deemed to be unviable
going forward; and
― Obtain visibility of the actual quantum of legacy debts such that
new investors could obtain comfort to the level of funding required to focus
on the core business development as opposed to new monies being utilised
against historic debt.
New Business Plan
In relation to the above, the Joint Administrators have worked extensively
with the Chairman of the Group, the CSO and other senior management who remain
supportive of the business and continuing to develop the Group's
market-leading technology.
The Joint Administrators have discussed the 2.0 plan extensively and have
reviewed and commented upon financial forecasts which have been prepared.
The Joint Administrators, working alongside the Group and its advisers, have
identified potential cornerstone investors. The Joint Administrators are
currently progressing negotiations with the potential cornerstone investors.
Related discussions with the Group's corporate advisers have been positive in
terms of obtaining the necessary funding to achieve the outcome following
agreement with a cornerstone investor.
An update on the progress of this matter will be provided as soon as
reasonably practicable.
Lower Operating Costs
In recognition of significant cash burn within the Group, the Joint
Administrators have reduced the staff headcount. Further details of this are
provided in Section 5.4.
The Joint Administrators have worked extensively with the Group's finance and
operating teams to review and undertake a supplier rationalisation program.
The Joint Administrators have engaged with critical suppliers only to ensure
continuation of supplies during the Administration period.
The Joint Administrators have taken steps to terminate all non-critical
suppliers and to prepare cash flow forecasts underpinning the Administration
trading period.
Legacy Creditors
As at the date of Administration, there was uncertainty regarding the quantum
of debt owed to key creditors of the Group.
The Joint Administrators have reviewed underlying agreements and financial
records for such creditors and have proactively held discussions with such
creditors.
As such, the Group now has improved visibility on the true quantum of its
legacy debts which is being utilised to facilitate the investor negotiations
as outlined in Section 4.1.
4.2. Facilitating a sale of the business and/or assets of the Group
Notwithstanding the progress as outlined in Section 4.1, the Joint
Administrators recognise that there is no guarantee that this option will be
successful.
As such, the Joint Administrators have been working on marketing the business
and assets of the Group for sale in the post-Administration period should the
prospect of not being able to rescue the Group as a going concern materialise.
The Joint Administrators worked with the Group's CSO to prepare an initial
teaser document and populate a data room for interested parties.
A potential interested party list was populated utilising contacts from the
Joint Administrators' proprietary databases and existing contacts, as well as
potential parties identified by the Group's senior management.
The teaser document has now been sent out to 749 potentially interested
parties.
The Joint Administrators are currently negotiating and having positive
discussions with multiple parties in relation to their interest in the
business and/or assets of the Group.
5. Other Actions of the Joint Administrators following appointment
A summary of the other main tasks performed by the Joint Administrators since
our appointment is as follows.
5.1. Administration and Planning Tasks
This represents the work involved in the routine administrative functions of
the case by the Joint Administrators and their staff, together with the
control and supervision of the work done on the case by the office holders. It
does not necessarily give direct financial benefit to the creditors, but must
be undertaken to comply with Insolvency legislation and the Statements of
Insolvency Practice, which set out required practice that an office holder
must follow.
― Case planning and devising an appropriate strategy for dealing with
the case and giving instructions to staff to undertake the work on the case;
― Setting up electronic case files;
― Setting up the case on the practice's electronic case management
system and entering data;
― Issuing the statutory notifications to creditors and others required
on appointment as office holders, including placing adverts in the Gazette;
― Obtaining a specific penalty bond (this is insurance required by
statute that every insolvency office holder must obtain for each insolvency
appointment);
― Dealing with all routine correspondence and emails relating to the
case;
― Opening, maintaining and managing the estate bank account;
― Creating, maintaining and managing a cashbook;
― Undertaking regular bank reconciliations of the estate bank account;
― Daily calls with the Group's senior management to discuss and
monitor Administration progress and outstanding matters;
― Liaising with finance team to collate relevant information and
assist with preparation of the Group's Statements of Affairs;
― Liaising with finance team and payroll providers in respect of
employee salaries;
― Liaising with payroll providers to produce relevant employee
documents, such as P45s;
― Preparation of relevant employee FAQs and liaising with Evolve to
assist employees with matters relating to termination of employment and
redundancy payments;
― Liaising with employment specialists as regards the extension of
employment for certain critical staff members;
― Liaising with Allenby to produce RNS announcements to advise members
of RGP's Administration, the resignation of one of RGP's directors and company
secretary, and to provide an update on the process of the Administration in
line with AIM requirements;
― Continuous engagement with Allenby to ensure AIM requirements are
met consistently throughout RGP's Administration;
― Undertaking periodic reviews of the progress of the case; and
― Overseeing and controlling the work done by case administrators.
5.2. Realisation of Assets
This represents the work involved in the protection and realisation of assets,
which is undertaken directly for the benefit of creditors.
― Liaised with the bank regarding the closure of the bank account and
the transfer of funds held;
― Instructed valuation agents to undertake ex-situ and in-situ
valuation of the Group's tangible assets;
― Maintained employees to ensure the value of tangible assets on site
is preserved;
― Instructed professional advisors to renew patents owned by RL to
ensure protection of asset value;
― Contacted valuation agents and received a quote to undertake a
valuation of intangible assets held by RL. Considerations around merits of
formal valuation based. Instructions will follow should a piecemeal sale
process for IP be pursued;
― Liaised with insurance providers to ensure extension of relevant
insurance policies relating to the Group's assets. Given the type of assets
held by the Group, certain comprehensive insurance policies had to be
considered and extended; and
― Instructed professional advisors to assist with reaching out to
interested parties to explore fundraising opportunities.
5.3. Creditors
The Joint Administrators continue to engage extensively with the known
creditors of the Company to determine and record claims and establish which
suppliers are deemed critical in preserving the value of the Group's business
and assets.
For the avoidance of doubt, no creditors should be continuing to perform work
on behalf of the Group without direct instruction either from or on behalf of
the Joint Administrators.
More information on creditors is presented at Sections 6.3 and 6.5.
5.4. Employees
As at the date of the Administrations, the Group employed 22 full time
employees. Immediately following their appointment, the Joint Administrators
met with employees to explain the background to their appointment and the next
steps in the process. The Joint Administrators have continued to be as
transparent as possible with employees in the Administration process,
including having daily update calls with senior management to address any
operational concerns and employee queries.
The majority of the employees were employed by RL, with the exception of two
senior employees whose employment contracts are with RGP.
All employees had been provided with notice to terminate their employment
prior to the appointment of the Joint Administrators. A total 3 employees were
on six weeks' contractual notice with a termination date of 22 March 2024,
being the date of the Administrations and this was therefore their final date
of employment. A total of 14 were on three months' contractual notice with a
termination date of 7 May 2024, whilst the remaining senior-management
employees were on six months' contractual notice with a termination date of 7
August 2024.
The Joint Administrators originally retained all employees, in line with their
agreed notice periods, at the date of the Administrations and have paid
employees for such work performed. The purpose of this was to ensure
continuity of the Group's operations whilst the Administration strategy was
determined and subsequently progressed.
As detailed above, the options available to the Group both required retention
of a core team of employees:
― In the event that sufficient investment to facilitate continuing as
a going concern is achievable, the Joint Administrators have reduced the
headcount to lower the operational costs to a more attractive level for
potential investors, following consultation with senior management and
professional advisers; or
― In the event that the sale of the business and/or assets is pursued;
key staff will be required to assist with such transfers. This will also be
the case if the Joint Administrators are left with no alternative but to
pursue a sale of assets on a piecemeal basis and closure of the Group's
facility.
Based on the above scenarios, the Joint Administrators worked extensively with
senior management to determine the appropriate employees to be retained post 7
May 2024 to assist with the ongoing Administration processes.
As at the date of this report, the Group currently employs 10 staff members
(reduced from 22 as at the date of the Joint Administrators' appointment),
including Iain Ross (as Chairman) and Randolph Cortelling (as CSO). The
majority of these staff members have been temporarily retained until 31 May
2024 from their original termination date of 7 May 2024.
The Joint Administrators will continue to monitor the appropriateness of
staffing levels in the Administrations, much of which will be determined by
the outcome of investor and/or interested party negotiations.
5.5. Investigations
Insolvency legislation gives the Joint Administrators powers to take recovery
action in respect of what are known as antecedent transactions, where assets
have been disposed of prior to the commencement of the insolvency procedure,
and also in respect of matters such as misfeasance and wrongful trading.
The Joint Administrators are required by the Statement of Insolvency Practice
2 to undertake an initial investigation to determine whether there are
potential recovery actions for the benefit of creditors. The Joint
Administrators are also required to report to the Secretary of State on the
conduct of the Directors.
This work is a statutory obligation, which may result in a direct benefit to
the creditors. The work undertaken initially comprises:
― Recovering and reviewing the Group's books and records to identify
any transactions which could lead to the Joint Administrators taking action
against a third party in order to recover funds for the benefit of creditors;
― Requesting and receiving responses and information from the current
and former directors of the Group as regards the circumstances that led to the
Administrations; and
― Conducting an initial investigation with a view to identifying
potential asset recoveries by seeking and obtaining information from relevant
third parties, such as the banks, accountants, solicitors, etc.
6. Estimated Financial Position of the Group
The Joint Administrators asked the Directors to prepare a summary of the
Group's estimated financial position as at 20 March 2024, which is known as a
Statement of Affairs.
A copy of RGP's SoA as at 20 March 2024 is provided at Appendix VII.
6.1. Fixed and floating charge assets
No security has been granted by any of the Companies in the Group over any of
their assets, so there are no assets subject to a charge within the Group.
6.2. Uncharged Assets
RGP
― The main asset of RGP comprises cash at bank of £2,023,754.
However, this included a Blackrock liquidity fund balance that was paid to RL.
As such, a balance of £1,956,529.70 has been realised in this regard;
― The SoA lists tangible assets with a book value of £190,643 but
with an estimated-to-realise value of £0. The nil value arises as a result of
all realisable tangible assets being held by RL;
― The SoA lists a book value of £68,209 for RGP's investment in group
companies. However, it does not appear that there is any value to be realised
in respect of this. As such, the expected recovery is £0; and
― Amounts owed by the subsidiaries to RGP have a book value of
£4,059,129. This refers to loans that would be issued from RGP to its
subsidiaries to facilitate the Group's operations. These loans would then be
written off on an annual basis. On the basis of the rest of the UK
subsidiaries being in concurrent Administration procedures, expected
realisations are uncertain at this point, as they are dependent on the outcome
of the Administrations.
RL
RL holds the majority of non-cash assets in the Group comprising:
― Intangible assets, predominantly IP with a book value of £186,345.
It is difficult to ascertain the estimated-to-realise value at this stage due
to the nature of the assets held by RL. The Joint Administrators have
contacted three specialist third parties and obtained formal quotes for them
to provide a valuation of the IP. To avoid incurring unnecessary costs at this
stage, the decision on whether to proceed with the valuation is dependent on
the outcome of ongoing discussions and negotiations with interested parties;
― Tangible assets comprising laboratory assets used for stem
cell-derived exosome research, as well as office furniture, fixtures and
fittings and IT equipment have an estimated-to-realise value of £281,600 on
an ex-situ basis. The in-situ valuation obtained produced an
estimated-to-realise value of £533,00. These figures were provided by
third-party specialist valuation agents, Gordon Brothers;
― A licence agreement with a third party has given rise to a claim of
£1,000,000 in relation to a payment for achieving an hRPC milestone. The
estimated-to-realise value is given as £900,000, to account for tax that make
become due upon receipt of payment. The Joint Administrators are currently
assessing this position and intend to shortly commence action to recover any
valid amounts due;
― Pre-Administration VAT receivable of £55,498 is expected to be
recovered in full;
― Cash at bank of £683,213, which has been recovered in full;
― A R&D tax claim with a book value of £353,000, which is
unlikely to be realisable due to the Administration. However, in the event
that objective a) is achieved and RL is rescued as a going concern, the credit
would be claimable; and
― Prepayments of £184,769 which represent amounts paid in advance to
various suppliers. This book value was accrued for accounting purposes, but
has an estimated-to-realise value of nil.
RHL and RUKL
Neither company has any assets to our knowledge.
6.3. Preferential creditors
- Ordinary Preferential Creditors
The ordinary preferential claim consists of employee claims for arrears of
wages and holiday pay, as well as outstanding pension contributions.
The following ordinary preferential claims are estimated for the Companies in
the Group:
― RGP had 2 employees with estimated preferential claims of £2,600;
― RL had 20 employees with estimated preferential claims of £24,403;
and
― RHL and RUKL had no employees and no preferential claims are
anticipated.
Please note that these figures relate to the arrears and holiday pay owed, as
well as outstanding pension contributions, as at the date of the
Administration and do not account for employees being retained and paid in
full after the Joint Administrators' appointment. There are currently no
outstanding preferential claims relating to employees in the Administrations,
as all employees have since been paid in full. The only outstanding claim as
at the date of these proposals is the pension liability. The Joint
Administrators are in correspondence with the Group's pension provider to
ascertain the exact pension liability due. Once this has been determined, the
cost will be paid as an expense of the Administration.
- Secondary Preferential Creditors
HMRC are secondary preferential creditors for certain specified debts, such as
VAT, PAYE, employee National Insurance Contributions, student loan deductions
and Construction Industry Scheme deductions. Secondary preferential debts are
payable after all ordinary preferential debts have been paid in full, and
before non-preferential unsecured debts.
The SoAs include the following secondary preferential claims owed to HMRC:
― of £12,993 against RGP;
― of £45,767 against RL; and
― no claims against RHL and RUKL.
Please note that these figures are taken as at the date of the Administration
and do not account for employees being retained and the requisite PAYE and
National Insurance payments being made in full. There are currently no
outstanding preferential claims in the Administrations, as all requisite PAYE
and National Insurance payments have since been made in full. There are no
outstanding VAT liabilities and any VAT payable will be paid as an expense of
the Administrations/set off against VAT receivable. RGP and RL are registered
as part of a VAT group.
6.4. Prescribed Part
There are provisions of the insolvency legislation that require the Joint
Administrators to set aside a percentage of a Company's assets for the benefit
of the unsecured creditors in cases where a Company gave a "floating charge"
over its assets to a lender on or after 15 September 2003. This is known as
the "prescribed part of the net property" ("prescribed part").
As the Group granted no floating charges, the prescribed part provisions do
not apply for any of the Companies in the Group.
6.5. Unsecured creditors
The directors estimate that the Companies in the Group have the following
unsecured creditor claims:
― RGP has estimated unsecured creditor claims totalling £21,203. The
Joint Administrators are aware of a debt to the Welsh Government in relation
to the grant, rent, and utility arrears. This debt has not been included in
the figure for estimated unsecured creditor claims, as it remains uncertain;
― RL has estimated unsecured creditor claims totalling £613,607; and
― RHL and RUKL are estimated to have no unsecured creditor claims.
The Joint Administrators do not have the power to declare and pay a dividend
to unsecured creditors without obtaining a Court order to do so. As such, the
Joint Administrators do not intend to review or agree unsecured creditor
claims at this time.
Any unsecured claims relating to wage arrears can now be considered to amount
to nil, as all employees have been paid in full as an expense in the
Administration.
7. Joint Administrators' Receipts and Payments Account
Summaries of the Joint Administrators' receipts and payments from 20 March
2024 to 10 May 2024 can be found at Appendix III, which has been reconciled to
the financial records that the Joint Administrators are required to maintain.
All amounts are shown net of VAT. The Joint Administrators' estate bank
accounts are held with Barclays Bank and are interest bearing.
7.1. Receipts (RGP)
- Cash at Bank
RGP held a number of bank accounts and the Joint Administrators have realised
£1,956,529.70 in this regard. This figure includes a balance held in USD,
which has been converted to GBP using Bank of England rates as at the date of
Administration.
7.2. Payments (RGP)
― Notary Fees
Notary fees in the sum of £175.00 were paid to De Pinna LLP in relation to
the swearing of the Administration order.
― Statutory Advertising
The sum of £112.50 was paid to Courts Advertising Limited for advertising the
Joint Administrators appointment in the London Gazette.
― Nomad Fee
Allenby Capital Limited were paid £18,989.07 for services rendered as RGP's
nominated advisor and broker.
― Financial Advisory Services
WG Partners LLP were paid £10,000.00 for financial advisory services provided
to assist the Joint Administrators in the fundraising process.
― Insurance of Assets
Arthur J Gallagher Insurance Brokers Ltd were paid £10,766.33 in relation to
the renewal of insurance policies.
7.3. Receipts (RL)
- Cash at Bank
RL held a number of bank accounts and the Joint Administrators have realised
£628,914.97 in this regard.
7.4. Payments (RL)
― Notary Fees
Notary fees in the sum of £175.00 were paid to De Pinna LLP in relation to
the swearing of the Administration order.
― Statutory Advertising
Statutory advertising in the sum of £112.50 was paid to Courts Advertising
Limited for advertising the Joint Administrators' appointment in the London
Gazette.
― Cleaning Services
£20,955.00 was paid to Matrix Workplace Services Limited in relation to
cleaning and chemical waste disposal services required to maintain operations.
― Internet Costs
£1,260.00 was paid to Virgin Media Business Limited to maintain the provision
of internet and broadband services for the site in Pencoed.
― Administrative Expenses
Croner Group Ltd were paid £298.08 in relation to the maintenance of the
Group's BrightHR employee portal. This portal is used to efficiently
distribute employee documentation and track accrued holiday.
― Employee Benefits
£6,779.95 was paid to Bupa Insurance Services Ltd for employee private
medical cover, in accordance with the employees' existing employment
contracts.
― Patent Attorneys
£12,697.50 was paid to Elkington and Fife LLP in accordance with their fees
for managing patent application matters.
― Cryostorage
£4,769.87 was paid to Thermo Electron Ltd in relation to costs incurred in
maintaining cryopreserved cell bank stocks, including critical cell bank
assets.
― Valuation Agents
£3,750.00 was paid to Gordon Brothers for the valuation of RL's tangible
assets.
― IT Costs
IT costs in the sums of £1,098.00 and £6,314.83 were paid to SDT Limited and
Host-Un Limited, respectively.
― Delivery Costs
FedEx Express UK Limited were paid £100.88 in relation to postage services.
― Gas Supplies
Air Products Plc were paid £3,084.20 for the supply of liquid nitrogen and
carbon dioxide. Please refer to section 9.3 for more information.
― Stationary & Postage
Mailing Answers were paid £452.56 for the printing, packing, fulfilment and
postage of the Joint Administrators' communication to creditors.
― Employee Expenses
£1,790.05 was paid in relation to employee expenses. The Joint Administrators
agreed to cover these costs as they were customarily paid in the normal course
of business. These include certain employee travel costs and petty cash
expenses.
― Storage Costs
£131.65 was paid to Kelly's Storage in relation to off-site archive
documentation storage.
― Patent Renewals
CPA Global Limited were paid £16,712.11 in relation to essential IP renewals.
― Laboratory Consumables
Unchained Labs, LLC were paid £2,221.78 in relation to laboratory consumables
critical to the exosome programme.
― Sample Examination
Axis Bioservices Limited were paid £2,000.00 in relation to the completion of
critical research for the Group's in vivo studies.
― Wages & Salaries
£98,906.62 has been paid in employee wages since the commencement of the
Administration. The Joint Administrators elected to pay employees in line with
the terms of their contracts to preserve the value of the business.
― H M Revenue and Customs
£59,719.75 has been paid to HMRC in relation to PAYE and NIC liabilities
incurred as a result of employee salary payments.
― Bank Charges
£15.00 has been paid in bank charges to Barclays Bank.
― Contractor Fees
£8,737.50 has been paid to Amicus Clinical Development Limited in relation to
fees incurred in the closure of historic studies.
8. Proposed future actions of the Administrators to achieve the
objective of the Administration and anticipated exit
The actions that the Joint Administrators anticipate undertaking are as
follows, and are based on rescuing the Group, or certain companies in the
Group, as a going concern:
― Complying with our statutory duties as Joint Administrators,
including an investigation into the Company's affairs and the conduct of the
Directors prior to the Administrations;
― Reporting to the Committee, in the event that one is formed, and
complying with statutory reporting requirements;
― Resolving any taxation/VAT issues and submitting post-appointment
returns;
― Pursuing the outstanding book debt due to RL;
― Liaising with key stakeholders to support a strategy for the
refinancing or sale of the Group;
― Continuing to reach out to potential interested parties to pursue
the refinancing of the Group, allowing for an exit from Administration as a
going concern, in line with objective a);
― To account for the possibility that this is deemed to not be
feasible, a sale process for all, or part, of the Group is being run
concurrently, as such a sale would allow for the Group's, or part of the
Group's, continuation on a going concern basis, thereby achieving objective
a);
― A sale of the assets and/or business is also being considered should
the above processes fail to materialise, though this would be in relation to
achieving statutory objective b) instead of a); and
― An asset sale on a piecemeal basis is deemed to be a last resort
solution and will only be pursued should it be determined that the only
achievable statutory object is c).
9. Pre-Administration costs
Statute requires the Joint Administrators to seek separate and specific
approval for pre-appointment costs outstanding, in accordance with Rule 3.52
of the Insolvency Rules 2016.
If a Creditors' Committee is appointed, it will be for the Committee to
approve payment of the outstanding pre-Administration costs. If a Committee is
not appointed, the Joint Administrators will seek a decision from the
creditors.
The costs incurred prior to the Administration are as follows:
9.1. Cork Gully LLP's time costs
Cork Gully LLP was initially instructed to provide professional advice to the
Company for which it was paid £10,000.00 plus VAT.
Cork Gully provided advice and assistance to prepare the Group for
Administration. The Board approved remuneration on a time costs basis. Cork
Gully LLP's Fee Practice Recovery Policy, including charge out rates, can be
found at
http://corkgully.com/wp-content/uploads/2023/03/Practice-Fee-Recovery-February-2023.pdf
(http://corkgully.com/wp-content/uploads/2023/03/Practice-Fee-Recovery-February-2023.pdf)
.
An outline of the work undertaken prior to Administration can be found in
Section 2.4.
Attached at Appendix IV is a schedule summarising the time spent by Cork Gully
LLP in the period prior to the Administration. The pre-Administration time
costs incurred (excluding VAT) amount to £55,846.
The Joint Administrators are seeking creditors' approval that the above
amounts be recovered in full.
9.2. Pre-Administration Expenses
Covington provided services to assist the Boards in placing the Group in
Administration. Their total outstanding costs amount to £6,290 (excluding
VAT).
The Joint Administrators are seeking creditors' approval that the above amount
plus VAT be paid from RGP's Administration estate, as RGP was the contracted
party.
10. Joint Administrators' Remuneration and Expenses
10.1 Joint Administrators' Remuneration
Insolvency legislation allows different fee bases to be used for different
tasks within the same appointment. The fee bases, or combination of bases, set
for a particular appointment is/are subject to approval, either by a
committee, if one is appointed, or the creditors or the Court.
The alternate bases by which an office holder may charge their fees are any
of, or a combination of, the following:
― by reference to the time spent on attending to particular matters;
or
― a fixed fee; or
― as a percentage of realisations /distributions.
Those responsible for approving an office holder's remuneration and the
remuneration of their associates must be provided with sufficient information
to make an informed judgement about the reasonableness of the office holder's
requests. This report is therefore written to comply with this requirement.
The Joint Administrators are seeking to be remunerated on a fixed fee basis as
regards the work undertaken and expected to be undertaken in the
Administration in respect of the following categories of work: Administration,
Realisation of Assets, Creditors, Investigations, Trading, and Case Specific
Matters.
The Joint Administrators are seeking a fixed fee of £300,000 plus VAT for the
work undertaken and expected to be undertaken in respect of RGP and £300,00
plus VAT for the work undertaken and expected to be undertaken in respect of
RL.
As highlighted by the information provided above, this is a complex case.
Following consideration of the nature and value of the assets involved, the
Joint Administrators are of the opinion that the fixed fees proposed are
expected to produce a fair and reasonable reflection of the work that they
anticipate will be necessarily and properly undertaken in the Administrations.
At present, the value likely to be achieved through fundraising activities or
the sale of the Group/business and assets is uncertain. However, the Joint
Administrators anticipate that the fixed fees will be drawn in full.
In addition to the fixed fees outlined above, the Joint Administrators are
seeking to be remunerated on a percentage of realisations basis, in respect of
the work undertaken and expected to be undertaken to realise intangible
assets. The Joint Administrators are thus seeking a fee of 5% plus VAT of all
gross intangible asset realisations in RL.
The Joint Administrators believe that this percentage reflects the risk that
is being taken, the nature of the assets involved and the complexity of the
case. As such, they are of the opinion that the percentage proposed is
expected to produce a fair and reasonable reflection of the work that is to be
necessarily and properly undertaken.
Details about how an administrator's fees may be approved is available in a
Guidance Note issued with Statement of Insolvency Practice 9, and they can be
accessed at
https://www.r3.org.uk/technical-library/england-wales/technical-guidance/fees/more/29114/page/1/liquidation-a-guide-for-creditors-on-insolvency-practitioner-fees/
(https://www.r3.org.uk/technical-library/england-wales/technical-guidance/fees/more/29114/page/1/liquidation-a-guide-for-creditors-on-insolvency-practitioner-fees/)
. There are different versions of these Guidance Notes, and in this case
please refer to the most recent version.
Please note that we have also provided further details in our practice fee
recovery sheet which can be found at
http://corkgully.com/wp-content/uploads/2023/03/Practice-Fee-Recovery-February-2023.pdf
(http://corkgully.com/wp-content/uploads/2023/03/Practice-Fee-Recovery-February-2023.pdf)
.
10.2 Joint Administrators' Expenses
When requesting the basis of our fee authority, we are required to estimate
the anticipated expenses likely to be incurred in administering the estate.
Such expenses are categorised as either Category 1 or Category 2 expenses.
― Category 1 expenses
Category 1 expenses are directly referable to an invoice from a third party
which is either in the name of the estate or Cork Gully LLP. In the case of
the latter, the invoices make reference to, and can therefore be directly
attributed to, the estate. These disbursements are recoverable in full from
the estate without prior approval of creditors either by a direct payment from
the estate or, where the firm has made payment on behalf of the estate, by a
recharge of the amount invoiced by the third party.
Examples of category 1 disbursements are statutory advertising, external
meeting room hire, external storage, specific bond insurance and company
search fees.
― Category 2 Expenses
Category 2 expenses are incurred by the firm and recharged to the estate; they
are not attributed to the estate by a third-party invoice and/or they may
include a profit element. These disbursements are only recoverable from the
estate with the approval of creditors. Examples of category 2 disbursements
are photocopying, internal room hire, internal storage and mileage.
Cork Gully LLP will not seek to charge or recover any category 2 disbursements
incurred in respect of work undertaken on this assignment.
10.3 Agents and Professional Advisors
The following professional advisors have been instructed, or are anticipated
to be instructed, during the course of the Administration:
― Elkington and Fife LLP
The Joint Administrators were advised by senior management of the Group that
much of the value of the Group's business is held in its IP. As such, the
Joint Administrators consider it imperative to maintain the services of
Elkington, the incumbent patent attorneys. During the Administration,
Elkington have assisted in conducting a review of the Group's IP assets and
facilitating further patent applications and renewals.
― Gordon Brothers International, LLC
Gordon Brothers were engaged to provide a desktop valuation of the tangible
assets held by RL, on in-situ and ex-situ bases. The valuation report was
prepared by Josh Chivers MRICS and Simon Bamford MRICS. This valuation was
deemed necessary to allow the Joint Administrators to make an informed
assessment of any offers received in respect of the acquisition of the Group
as a whole or offers to acquire specific tangible assets out of the
Administration. The Joint Administrators will consider utilising Gordon
Brothers to facilitate an auction sale of the tangible assets, should this be
required.
― Allenby Capital Limited
Allenby have been retained by the Joint Administrators to 30 May 2024 as
nominated advisor ("Nomad") and broker in relation to RGP's AIM listing.
Allenby's previous experience in assisting RGP was deemed essential for
progressing the objective of the Administrations.
― WG Partners LLP
WG were retained by the Joint Administrators to assist in the
fundraising/merger and acquisition ("M&A") process. Prior to the
Administrations, WG were engaged as the Group's corporate advisers, supporting
previous fundraising efforts. During the Administrations, WG have assisted in
progressing certain interested party discussions and introducing potential
purchasers.
― Evolve IS Limited
The Joint Administrators have engaged employment specialist, Evolve, as a
sub-contractor to assist with the handling of employee correspondence and
communications with the Redundancy Payments Service. Evolve are on hand to
assist employees directly in making applications for redundancy pay. Evolve
will also assist with any preferential employee claims, should they arise.
― Courts Trustees Limited
The Joint Administrators have engaged pension specialist, Courts Trustees, as
a sub-contractor to assist in communicating with the Group's pension provider
and ensure the Joint Administrators' statutory obligations are met.
― Arthur J Gallagher Insurance Brokers Ltd
The Joint Administrators have engaged insurance brokers, Gallagher, to renew
insurance premia in line with the cover required to preserve the value of
assets. Prior to the Joint Administrators' appointment, insurance brokers were
contracted with RGP. As such, the Joint Administrators have paid, and intend
to pay, post-appointment insurance premia out of the RGP estate.
― De Pinna LLP
The Joint Administrators engaged De Pinna to assist in the notarisation of
statutory appointment documents. De Pinna charge a competitive market rate and
offer a professional service.
― Matrix Workplace Services Limited
Matrix was engaged prior to the Joint Administrators' appointment to provide
essential cleaning and chemical waste disposal services. Due to the
bio-hazardous nature of the Group's business, the Joint Administrators intend
to maintain Matrix's cleaning services on an agreed reduced level of service.
This reduced level of service was negotiated by the Joint Administrators to
reflect the reduced cleaning/disposal requirement arising from the
decommissioning of a number of the Group's laboratories.
― Thermo Electron Ltd
Prior to the appointment of the Joint Administrators, Thermo Electron were
utilised by the Group in relation to the maintenance and storage of
cryopreserved cell bank stocks. The Joint Administrators consider this to be a
critical expense, necessary to preserve the value of the Group's assets.
― SDT Limited and Host-Un Limited
Much of the Group's value is held in data stored and managed by SDT and Hosts.
As such, the Joint Administrators consider it critical that SDT and Hosts are
paid for services rendered. Namely: maintenance of servers, backups, and data
storage.
― Air Products Plc
The continuation of Air Products' services is considered critical, as it
relates to the supply of liquid nitrogen and carbon dioxide necessary to
maintain on-site cryostorage of critical laboratory assets.
― CPA Global Limited
As previously noted, the Group's IP holds significant value. As such, the
Joint Administrators have continued CPA's services to facilitate the renewal
of an essential piece of IP protecting the Group's exosome platform. This is
imperative to ensure no value is lost whilst discussions with interested
parties are ongoing.
― Unchained Labs, LLC
As previously noted, the Joint Administrators have taken steps to preserve the
value of the Group's exosome platform. Unchained Labs provide laboratory
consumables that are instrumental to this platform.
― Axis Bioservices Limited and Amicus Clinical Development Limited
At the date of the Joint Administrators' appointment, there remained certain
outstanding research and studies which were required to be completed to
achieve the maximum value for the Group's historic studies. The Joint
Administrators have maintained the services of Axis and Amicus to complete
these studies, report their findings, and provide valuable data.
― Isadore Goldman Limited
The Joint Administrators engaged IG to assist in the preparation of
appointment documentation. Services may be retained during the
Administrations, should it be deemed necessary and in the interest of
creditors.
― Fox Williams LLP
The Joint Administrators engaged FW to provide advice in relation to ad hoc
employee matters. The Joint Administrators may continue to engage FW, should
it be deemed necessary and in the interest of creditors.
Expenses and professional advisor fees do not have to be approved, but when
reporting to any Committee and the creditors during the course of the
Administration, the actual expenses incurred will be compared with the
original estimate and an explanation of any material differences will be
provided.
The choice of professionals was based on our perception of their experience
and ability to perform this type of work and the complexity and nature of the
assignment. The Joint Administrators also considered that the basis on which
they will charge their fees represented fair value for money.
10.4 Estimated expenses
The following schedule outlines the expenses the Joint Administrators estimate
will be incurred. The total estimated expense is listed uncertain where the
cost is dependent on the duration of occupation of the premises and/or the
outcome of objective a):
RGP
Expense Expenses incurred to date (£) Total estimated expenses (£)
Statutory Advertising 112.50 225.00
Insurance 10,766.33 Uncertain
Statutory Bonding - 1,770.00
Legal advice - Uncertain
Nomad Fees 18,989.07 Uncertain
AIM Fees - Uncertain
Total 29,867.90 Uncertain
RL
Expense Expenses incurred to date (£) Total estimated expenses (£)
Postage 553.44 1,000.00
Statutory Advertising 112.50 225.00
Statutory Bonding - 2,630.00
Legal advice - Uncertain
Valuation Agents 3,750.00 Uncertain
Employment/Pension Specialists - 500.00
Total 4,415.94 Uncertain
11. Joint Administrators' Investigations
Further to Section 4.4, the Joint Administrators have a duty to consider the
conduct of those who have been Directors of the Group at any time in the three
years preceding the Administration. The Joint Administrators are also required
to investigate the affairs of the Group in order to consider whether any civil
proceedings should be taken on its behalf.
The Joint Administrators should be pleased to receive any information you may
have that you consider will assist them in this duty. It should be stressed
that this request for information forms part of their normal investigation
procedure.
12. Joint Administrators' Proposals
In order to achieve the objectives set out at Section 3, the Joint
Administrators formally propose to creditors that:
― The Joint Administrators continue to manage the business, affairs
and property of the Group in order to achieve the purpose of the
Administrations. In particular they:
1. Will continue to engage with interested parties with the view to
refinancing the Group or achieving a sale of, or part of, the Group on a going
concern basis to achieve statutory objective a);
2. If the above is not achievable, will continue to explore interest
in the acquisition of the business and/or assets out of Administration with a
view to achieving statutory objective b); and
3. Will consider a sale of assets on a piecemeal basis to pursue
statutory objective c), but only if the above options have been exhausted
first.
― If statutory objective a) is achieved, the Administration(s) will
end by making an application to Court for an order that the Administration(s)
ceases;
― If statutory objective a) is not achievable and the Group does
continue operating on a going concern basis, then the companies where
sufficient assets have been realised to allow for a distribution to be made to
unsecured creditors will be placed into Creditors' Voluntary Liquidation for
this purpose;
― The Group companies that do not have sufficient assets to allow for
such a distribution to be made will be dissolved instead; and
― Generally, exercise all powers as Joint Administrators as we
consider desirable or expedient at our discretion in order to achieve the
purpose of the Administration or protect and preserve the assets of the
Company or maximise the realisations of those assets, or of any purpose
incidental to these proposals.
13. Approval of Proposals
RUKL and RHL
In reference to RUKL and RHL, the Joint Administrators do not intend to seek a
decision from the creditors to approve their proposals as there are no
creditors and no assets from which to issue a distribution. As such, pursuant
to paragraph 52(1) of Schedule B1 of the Insolvency Act 1986, there is no
requirement for the Joint Administrators to seek creditor approval for their
Proposals in respect of the two companies.
However, creditors whose debts amount to at least 10% of the total debts of
RUKL or RHL, respectively, can require the Joint Administrators to seek a
decision from the creditors. Creditors must make such a request to the Joint
Administrators in writing to c/o Cork Gully LLP, 40 Villiers Street, London,
WC2N 6NJ or by email to reneuron@corkgully.com (mailto:reneuron@corkgully.com)
within 8 business days from the delivery of these proposals. Any request must
be accompanied by a statement of decisions creditors may wish to be considered
by the rest of the creditors, together with a statement of their claim. If
necessary to achieve the requisite percentage of creditors to requisition the
decision, a creditor's request should also be accompanied by a list of the
creditors concurring with the request, the amounts of their claims, the
statements of their claims, and a confirmation of their concurrence. If a
decision is not requisitioned within that time period, then the Joint
Administrators' proposals will be deemed to have been approved.
RGP and RL
The Joint Administrators are seeking a decision by correspondence from the
creditors in relation to RGP and RL.
Please note that I must receive at least one vote by the decision date or the
decision will not be made. I would, therefore, urge you to respond promptly.
Should any creditor or group of creditors wish to request a physical meeting
of creditors, they must do so within 5 business days of the delivery of the
notice that accompanies this letter. Such requests must be supported by proof
of their debt, if not already lodged. I will convene a meeting if creditors
requesting a meeting represent a minimum of 10% in value or 10% in number of
creditors or simply 10 creditors, where "creditors" means "all creditors."
The Group
You are also invited to determine whether to form a Committee ("the
Committee") and a notice of invitation to form a Committee and further
instructions are enclosed. Please note that if a Committee is appointed, it
will still fall to the creditors to approve or reject my request for a fee
increase.
To enable you to make an informed decision as to whether you wish to either
seek to form a Committee, or to nominate yourself to serve on a Committee,
further information about of the role of the Committee and what might be
expected from its members has been prepared by R3 and can be found at the link
https://www.r3.org.uk/technical-library/england-wales/technical-guidance/creditor-guides/more/29111/page/1/liquidation-creditors-committees-and-commissioners/
(https://www.r3.org.uk/technical-library/england-wales/technical-guidance/creditor-guides/more/29111/page/1/liquidation-creditors-committees-and-commissioners/)
.
The following documents are also available on the web-site:
― Notice of decisions by correspondence;
― Notice of invitations to form a Committee;
― Voting forms;
― Proposals;
― Proof of Debt Forms; and
― Statements of Affairs.
Further information about creditors' rights can be obtained by visiting the
creditors' information micro-site published by the Association of Business
Recovery Professionals (R3) at
www.r3.org.uk/technical-library/england-wales/technical-guidance/creditor-guides/
(http://www.r3.org.uk/technical-library/england-wales/technical-guidance/creditor-guides/)
. A copy of 'A Creditors Guide to Administrators Fees' published by the R3 is
available at
https://www.r3.org.uk/technical-library/england-wales/technical-guidance/fees/more/29113/page/1/administration-a-guide-for-creditors-on-insolvency-practitioner-fees/
(https://www.r3.org.uk/technical-library/england-wales/technical-guidance/fees/more/29113/page/1/administration-a-guide-for-creditors-on-insolvency-practitioner-fees/)
. An explanatory note which shows Cork Gully's fee policy is available at
http://corkgully.com/wp-content/uploads/2023/03/Practice-Fee-Recovery-February-2023.pdf
(http://corkgully.com/wp-content/uploads/2023/03/Practice-Fee-Recovery-February-2023.pdf)
. Please note that there are different versions of the Guidance Notes and,
in this case, you should refer to the most recent version.
14. Further information
To comply with the Provision of Services Regulations, some general information
about Cork Gully LLP, including about our complaints policy and Professional
Indemnity Insurance, can be found at
http://corkgully.com/wp-content/uploads/2022/12/Provision-of-Services-Regulations-Summary-September-2022-002.pdf
(http://corkgully.com/wp-content/uploads/2022/12/Provision-of-Services-Regulations-Summary-September-2022-002.pdf)
.
If creditors have any queries regarding these proposals or the conduct of the
Administration in general, or if they want hard copies of any of the documents
made available on-line, they should contact the Joint Administrators by email
at reneuron@corkgully.com (mailto:reneuron@corkgully.com) , or by phone on 020
7268 2150.
For and on behalf of the Group
Mark Smith
Joint Administrator
The affairs, business and property of the Group are being managed by the Joint
Administrators, who act as the Group's agents and without personal liability.
Mark Smith and Stephen Cork are authorised to act as Insolvency Practitioners
in the United Kingdom by the Institute of Chartered Accountants in England and
Wales.
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. END MSCFLFSLESIDLISRecent news on ReNeuron
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