Merchant House Group (MHG) is described in one Investor Briefing in January 2012 as being “well advanced in the process of transformation from an unprofitable small corporate finance house specialising in the currently moribund niche of fund-raising on AIM and PLUS markets into a profitable financial services group focussed on investment products for the UK retail market.”
It is stated, “We particularly note new management has made some excellent deals with administrators of insolvent companies.”
The biggest shareholder in MHG is Liberty Capital, holding just over 18% of the shares. One assumes that this is the same Liberty Capital incorporated in the British Virgin Islands and of which Mr Craig Whyte states he is 100% owner.
Two of the directors of MHG are James Holmes and Martin Eberhardt.
Both these gentlemen were directors of Wood Hall Realisations Ltd too. A third director was Mr Aidan Earley; the Earley brothers, Wulstan, Brendan and Aidan all having had business connections with Mr Whyte.
Wood Hall Realisations Ltd is in liquidation. It was a voluntary liquidation. This means that the directors assessed that, when the company was would up, there would be sufficient funds to pay the debtors within 12 months.
However, that did not happen.
There is a case regarding this company which called today in the Companies Court in London.
Wed, 08 Feb 2012
THE DAILY LIST
THE ROLLS BUILDING
MS REGISTRAR DERRETT
Wednesday 8th February 2012
At half past 10
7449/2011 Wood Hall Realisations Limited
The exact nature of that case, which by the case reference would have been initiated last year, is not clear.
However, there seem to be some similarities with the situation of Vital UK, the company in connection with which Mr Whyte was disqualified.
Before I detail them I should say that these similarities are purely superficial and ought not to be taken as implying that, in any way, Messrs Eberherdt, Holmes and Earley have fallen even 1% short in their performance of their Directorial obligations.
If you recall, Vital UK went into voluntary liquidation on the basis that there was sufficient to repay all creditors within 12 months. However, that did not happen and the liquidation process dragged on for some years before being concluded.
One problem was that the director who signed the “Declaration of Solvency” stated that there was over £600,000 of bills receivable, but the liquidator reduced this estimate to only £100,000. As a result a surplus for creditors became a substantial deficit, and the biggest loser was HMRC.
In connection with Wood Hall, we see that the Company went into voluntary liquidation on 26 November 2007.
The liquidation is not yet complete.
The Declaration of Solvency appears to have suggested that there were assets of £1,027,000.
There are declared debts of £836,004.18.
The sums due to HMRC are £821,604.35.
The sums due to trade creditors are £14,399.83.
The winding up cannot be completed yet due to “recovery of debts”.
We therefore have a catering company which, at the time the directors chose to wind it up, had no assets other than over £1 million of book debt owed to it. There was only a liability of £14k to trade creditors, and £821,000 to HMRC.
It went under at the same time as two other companies, at least one of which had Messrs Earley, Holmes and Eberhardt as directors.
As I mentioned, there is no suggestion of wrongdoing here, although one might wonder if Mr Whyte, who owns, through Liberty Capital over 18% of Merchant House Group, has had his confidence shaken by such an outcome for two of the directors of MHG.
The assiduous BillyBhoy68 has proved yet again that his digging skills are even better than mine!