Collapsed wine investment company Vinance plc owed £5m-worth of wine to its 1,300 clients when it went into administration, according to administrators.
Vinance plc was placed in administration last November
However, the business has an estimated deficiency of £2.37m, thanks to a ‘large’ amount of wine owned by Vinance with an estimated value of £3m.
The report from Herron Fisher, the administrators of the company, shows that Vinance’s records were ‘incomplete’ and ‘inadequate’ and that the directors had no idea of the true position.
‘It was apparent that the company’s records were inadequate and that the position of each individual client was not recorded properly,’ the report states.
‘The directors could not easily work out which clients were short of wine they had ordered and paid for, or what the extent of the shortfall was. The clients themselves were unaware that there was any problem.’
The report can only estimate what is owed to investors: ‘We cannot provide a full list of creditors as we do not know, at this stage, which of the 1,300 clients are creditors,’ it says.
Until the true position is known, no indication of the dividend due to creditors can be given.
Vinance used investors’ money to finance the running of the company, the report adds: ‘It transpires that sometimes the company took money from clients but did not buy the wine immediately and the money was used for general overheads.’
Vinance was placed in administration on 16 November, and in late November Albany Vintners Ltd/Arc Reserves Ltd paid £30,000 plus VAT for Vinance’s client database.
At the end of the 12-month administration period Vinance plc will be put into voluntary liquidation.
A creditors’ meeting will be held in London on 7 January.
Written by Jim Budd