Event

Directors of CSDM took 200,000 in dividends from 2009 profits

Event by
Business

It has emerged that the directors of failed charity donation management company CSDM took 200,000 in shareholder dividends from its 2009 profits before the company went into administration.

A meeting of creditors took place on Friday (20 August), following the company's administration with Rimes and Co in June.

At the meeting, administrators told creditors that the shareholder dividends were paid out in 2009, with CSDM Chris Stoddard and his wife Vanessa Stoddard the only shareholders. CSDM went down owing nearly £1.4m a year later.

More than half of the creditor value is taken by three interrelated companies, which also have Stoddard as a director: CSDM Response; CSDM QA; CS Incentive.

According to the administrator, Stoddard has agreed to write off the intercompany loans worth almost £700,000, excluding his companies as creditors.

However, an independent insolvency practitioner that attended the meeting told PrintWeek: "The suggestion was made only after one of the creditors suggested that things were so serious the police should possibly be involved.

"It makes no financial sense to write off those loans, especially as it was suggested in the meeting that CSDM Response could go into administration. The only reasons you would write something like that off are to keep the creditors onside or to hide something."

Also revealed in the meeting was the fact that only 20% of the company database, which was sold as part of the intellectual property, has been transferred. The remaining data has been retained by CS Incentive.

Incentive also took control of four of CSDM's contracts in January this year for £100,000, paid for by waiving three months' rent. However, it was revealed at the meeting that the contracts totalled £400,000, per year for three years, so the actual value was £1.2m.

Questions have also been raised about preferential creditors as some of the creditors in attendance reported that they had not been paid since March, aLthough the directors stated that a VAT return had been used to pay companies owed money by CSDM. The administrator plans to investigate the questionable trading position, dating back to January 2009.

A creditors' committee was formed by the creditors in attendance which, according to the insolvency practitioner was "a rare occurrence these days", but he said it was a positive position for the creditors.

Business