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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.

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