The notice of administrator's proposals for Complete Business Solutions Group Ltd, since renamed to CB Realisations Ltd (CBRL), has been filed at Companies House by administrators from Ernst & Young (EY).

Tim Vance, John Sumpton and Sam Woodward of EY Parthenon’s restructuring team were appointed as joint administrators of Complete Business Solutions Group Ltd and associated companies Bluefish Office Products Ltd, The Irongate Group Ltd, and RAM Print Ltd on 9 January.

Immediately following the appointment of administrators to the workplace supplies and associated services specialist group – which had an in-house reprographics team and litho and digital printing facilities – a sale of CBS’ business and assets was completed by the administrators to Banner, a subsidiary of EVO. The deal also resulted in the immediate transfer of all of its 632 staff.

At the time of writing today (15 February), no statement of affairs has yet been filed for CB Realisations Ltd at Companies House. The notice of administrator's proposals was available on Companies House as of 24 January, while the notice of approval of administrator’s proposals became available on the site on 1 February, after the proposals were deemed to be approved by creditors on 26 January.

The administrators said in the notice of administrator’s proposals that the directors have not yet submitted a statement of affairs for the group’s companies “given the limited time which has passed since the appointment of the joint administrators”.

However, the administrators did share in the document an estimate of the financial position of the group’s companies as at 9 January 2023, together with a list of creditors that includes “to the extent currently known” at the time of the document’s release, information including the amounts they are owed and details of any security held.

The administrators said the figures were compiled by management and have not been subject to independent review or statutory audit.

In terms of secured creditors, at the date of appointment HIF had £12.8m outstanding in respect of an invoice discounting facility provided to the group’s companies. The amount repaid to HIF as part of the sale was £10.3m.

In addition, HSBC had the following amounts outstanding: £8m RLS [Recovery Loan Scheme] term loan, £1.3m overdraft, and other ancillary facilities including credit cards (quantum to be confirmed). The administrators said they did not expect that HSBC would be repaid in full.

As part of the sale to Banner, all employees and their associated liabilities transferred to the purchaser and the administrators added they anticipated preferential creditor claims as follows: “HSBC may have a subrogated wages claim in the administration of CBRL in respect of funding it advanced to meet the December 2023 payroll. This would attract ordinary preferential status. We estimate the total claim will be in the region of £0.5m.

“In addition, HMRC will have a secondary preferential creditor claim in respect of outstanding VAT and PAYE. This is c.£7.5m at October 22 (latest available information).

“It is anticipated that this will relate to CBRL, however HMRC has previously indicated it has outstanding liabilities in BLF, Irongate and RAM. We await receipt of HMRC's claim in the administrations and therefore it is unclear whether there are any preferential creditors in BLF, Irongate and RAM.”

At this stage, there is the potential for a dividend to be available to HSBC in respect of its primary preferential claim, the administrators said.

However, it is unlikely there will be sufficient realisations to enable a distribution to be made to HMRC.

Non-preferential creditor claims were continuing to be submitted as of the compilation of this document last month, and the administrators said they were anticipating all non-preferential creditors would relate to CBRL.

While the statement of affairs was yet to be provided, it was estimated that total non-preferential claims would amount to around £17m for trade creditors, around £3.9m for other creditors and accruals, and circa-£10.6m for shareholder loan notes via unsecured guarantee.

The administrators said they did not envisage there would be a distribution to unsecured creditors in any of the administrations relating to the group’s companies.

The document also revealed that the sale consideration was nearly £11.55m, and that the full consideration was paid upon the completion of the deal. This included trade debtors of just over £10.25m and stock of over £893,000, as well as other tangible assets of nearly £396,000.

The majority of the company’s assets were included in the sale agreement. Excluded assets included stock held in sites that would not continue to be occupied by the purchaser post transaction, and certain other debtor balances (excluding trade debtors).

Separately, accounts filed at Companies House for Banner Business Solutions Ltd, the division of EVO that acquired CBS’ business and assets, showed that Banner made a pre-tax loss of £638,000 for the year ended 31 December 2021 on sales of £5.5m, while a year earlier its pre-tax loss was £716,000 on sales of just under £6.5m.