Huge UK car dealership in £2million debt after sudden collapse as administrators swoop in
Administrators for cash-strapped Marsh Holdings Limited, based in Exeter, Devon, said the firm cannot pay back its unsecured creditors.
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The firm held franchises for the likes of Harley Davidson in Plymouth and Southampton, Triumph in Plymouth and Yamaha in Exeter.
The dealership was forced to shut down all five showrooms last December - just months after it sold its Kia franchise to another group.
Administrators at Westcotts Business Recovery are currently selling the Triumph and Harley-Davison showrooms at Plymouth for £1.55million which is less than £1.9million estimated market value.
A huge portion of the firm's debt will be paid off with that money but the sum will not cover compensation to unsecured creditors.
Unpaid debt
The dealership's three subsidiaries have a combined debt of £2.3million which will likely go unpaid, according to Car Dealer Magazine.
The administrators said: "It is not anticipated that a dividend will be paid to unsecured creditors."
The firm owes ££1.161million to NatWest bank which holds security over the Plympton premises.
In addition, the business has preferred claims for unpaid salaries and holiday pay totalling an estimated £69,385.
Lastly, HM Revenue and Customs is expecting payment of £360,000 for VAT, PAYE and workers' National Insurance.
However, an offer of £1.55million has been accepted which will pay in full the outstanding balance at the bank, HMRC and the salaries.
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'Period of uncertainty in the economy'
Just three months prior to the closure, the company reported "strong cash reserves".
However, accounts for the group, which were filed at the end of last September, show it made an operating loss of £852,399.
Taking into account the £1.2m second payment for the sale of Kia Taunton, it clocked up a profit of just £27,526 for the year, according to Car Dealer Magazine
The firm blamed their recent issues on a 'period of uncertainty in the economy' along with continued poor weather, excessive supply and stock from their manufacturer partners, as well as recent budget announcements.
A notice on the company's used car website said at the time: 'Sadly, we are devastated to announce that we have had to cease trading with immediate effect.
We want to assure you that every possible effort was made to try and avoid this decision, but making it now is the only way we can minimise the impact on all those affected.
'We recognise there will be those of you that have concerns and matters outstanding and we want to assure you we are doing everything we possibly can to resolve these.
'We kindly ask that you are patient whilst we work to ensure these are dealt with quickly.'
Company Rescue claims the firm employed 62 people at its showrooms and had a turnover of £30million.
The Sun has reached out to Westcotts Business Recovery for a comment.
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