NEARLY 200 small investors have been told by administrators any lingering hopes of recovering debts from a Blackburn businessman have disappeared.
Administrators have proposed the formal dissolution of Mederco Ltd, the main arm of ex-Bury FC boss Stewart Day property empire, after nearly three years of wranglings.
Company records show around 195 people worldwide were owed sums ranging from a few hundred pounds to £25,000, after ploughing cash into Day’s operation.
Day’s property empire, based at a small office in Lions Drive, collapsed in April 2019. Initially it was thought £27m was owed but when further related Mederco firms got into trouble these estimates mushroomed to £54m.
Joint administrator Phil Deyes, on behalf of insolvency experts Leonard Curtis, has now issued a final report into Mederco Ltd’s dealings.
Day’s outfit was responsible for student building projects in Bradford and Bolton – related Mederco companies are already the subject of insolvency proceedings and Mederco also held long leases over car park spaces at Bury FC, where he was chairman until December, 2018.
One main line of enquiry by administrators centred on inter-company transactions, totalling £8.12m. But all of these related firms had been dissolved or were in administration.
Mr Deyes said: “The joint administrators have been unable to secure any financial records setting out the nature of the dealings between the parties save for bank statements and electronic Xero records showing the flow of funds between the various entities. The electronic accounting records show that the originating funds into the Mederco account came from money transfers from other Mederco companies.
“In fact it has been established the other Mederco companies are the largest creditors in this administration and also, themselves, subject to insolvency proceedings.”
The taxman was owed £605,000 but the single largest creditor debt was to Staffs-based Quantum Construction, which was contracted by Mederco over a failed student block project in Great Moor Street, Bolton.
Further enquiries disclosed 258 long-lease car parking spaces outside Bury FC’s Gigg Lane ground, not wanted by that club’s administrators, which will now pass to the Treasury Solicitor, as will spaces near student flats in Bradford.
An outstanding debt of £70,000, from Bury FC to the company, was identified, and while £28,333 was paid, £41,666 remained outstanding. Administrators say it is no longer viable to recoup the sum, which has effectively now been written off.
Another sum was identified via Day’s director loan account, totalling £437,061, which he disputed. Administrators found that with undrawn dividends this amount could be reduced to £142,062.
An investigation into Day’s finances found he had £20m of unsecured guarantees of £20m, including personal guarantees to the collapsed financier Lendy.
An out-of-court settlement of £30,000 was proposed but no payments had been made by Day, according to Mr Deyes.
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