PracticeAccounting FirmsUnsecured creditors lose out in Phones 4U collapse

Unsecured creditors lose out in Phones 4U collapse

Phones 4U administrators set to return 20-24p in the pound to secured creditors, but unsecured creditors - including HMRC - will receive paltry sum

Unsecured creditors lose out in Phones 4U collapse

COLLAPSED mobile phone retailer Phones4U will return up to 20-24p for every pound owed to secured creditors, but the £168m owed to unsecured creditor will be almost entirely wiped out, administrators from PwC have said.

Secured creditors, typically banks and bondholders, are set to receive around a quarter of the debts owed – double the amount originally expected – when the high street retailer collapsed into administration in September last year. But unsecured creditors, which include suppliers and HMRC, will receive just 0.4p in the pound.

The taxman is owed around £75m in VAT and corporation tax of which around £670,000 will be paid.

PwC said it had made “significant progress” in paying off the £3.4m owed in unpaid staff wages with the remainder expected to be paid by the end of 2015.

Administrators from PwC, appointed when the company collapsed after EE and Vodafone severed ties with the business last year, said £27m had been recovered by selling stock, the majority of which has come from the sale of Apple handsets.

Law firm Quinn Emmanuel has completed its initial investigation on conduct of management pre-administration. PwC said it is “considering the findings and potential next steps”.

To date the administrators are yet to draw any fees. “We will continue to focus on maximising the returns for creditors,” PwC said.

Earlier this month, Liquidators from PwC dealing with the collapse of MG Rover said they hope to secure further £56m for creditors, ten years after the car maker was placed into administration.

PwC is pursuing HMRC for overpaid VAT dating back a number of years on vehicles manufactured by MG Rover and supplied to fleet operators. If successful, the claim will add to the £80m returned to creditors to date.

Related Articles

KPMG replaces PwC as Croda auditor

Accounting Firms KPMG replaces PwC as Croda auditor

5d Emma Smith, Managing Editor
FRC closes investigation into PwC over Barclays compliance

Accounting Firms FRC closes investigation into PwC over Barclays compliance

3w Alia Shoaib, Reporter
Top 50+50: Firms fall short on diversity

Accounting Firms Top 50+50: Firms fall short on diversity

3w Alia Shoaib, Reporter
PwC to take over from Deloitte as Diploma auditor

Accounting Firms PwC to take over from Deloitte as Diploma auditor

2m Alia Shoaib, Reporter
Deloitte rises in auditor rankings with most FTSE 250 clients

Accounting Firms Deloitte rises in auditor rankings with most FTSE 250 clients

2m Alia Shoaib, Reporter
PwC’s five strategic priorities for becoming ‘the leading professional services firm’

Accounting Firms PwC’s five strategic priorities for becoming ‘the leading professional services firm’

1m Emma Smith, Managing Editor
PwC publishes 12.8% BAME pay gap

Accounting Firms PwC publishes 12.8% BAME pay gap

1m Emma Smith, Managing Editor
PwC to audit BBC pay policies following gender pay gap outrage

Accounting Firms PwC to audit BBC pay policies following gender pay gap outrage

2m Alia Shoaib, Reporter