On Saturday, the Leicester Mercury ran a front page story on the £4.8m owed to more than 30o firms by Donington Ventures Leisure (DVL), the company which tried but failed to bring the Formula One British Grand Prix to Donington Park. See link below;
http://www.thisisleicestershire.co.uk/news/Firms-fight-survival-collapse-Donington-Park-bid-F1/article-1717856-detail/article.html
Why, two months since the company went into administration, have these figures only just become known? Well, it seems it has taken that long for administrators Begbies Traynor to get to grips with how much exactly DVL owed and to who.
But these debts were very much known about by the scores of small Leicestershire firms which have been owed hundreds of thousands of pounds by DVL for months. And many of them have struggled to survive as a result.
The administrators' report, which became available to the public on the Companies' House website for the first time last Friday, says that creditors had been chasing DVL for some time, some taking legal action.
Meanwhile, DVL chased the £100m-or-so it needed to upgrade the circuit to Formula One standard. Begbies pointed out that DVL's initial plan to raise the money - through a scheme based on future income from corporate suites - collapsed as a result of the "credit crunch" (sic) - putting the phrase in quote marks as if it was a new concept. Some people would say the existence of a credit crunch seemed to be something new to Simon Gillett and DVL's three other directors when they began their grand adventure in early 2008.
The global credit crunch led to the collapse of two other fund-raising ideas - potential investment from a Dubai property magnate and a bond issue. The report says that the company filed its intention to appoint administrators a month before actually going into administration to protect itself from creditors taking legal action as it gave its fund-raising bid one last push.
The report also reveals DVL forfeited its lease for the circuit in April last year because of non-payment of rent. However, the company managed to gain breathing space while it tried to secure the funding. The track was finally put back into the hands of Wheatcroft & Sons on December 23.
So what now? Well, it is unlikely most of the creditors will see any of the money they are owed. The Wheatcrofts are currently looking to hand the lease to another company so that Donington Park can rebuild both physically and in terms of reputation. How quickly that happens remains to be seen.
Subscribe to:
Post Comments (Atom)
Sadly, too many people seem to feel able to allow their businesses to run in ways some of us may find immoral - effectively gambling with other people's money. The Directors of DVL seem to have had grand and visionary plans, something we need in our economy. But I cannot condone leaving small businesses out of pocket. It just doesn't fit comfortably with me.
ReplyDelete