A shopping centre collapsed into liquidation owing more than £5 million.
A new report shines a light on the sudden closure and liquidation and reveals that unsecured creditors face losing £1.7m.
The liquidators’ report shows “there will be insufficient funds to enable a distribution” to a secured creditor, Close Brothers Limited, of St Giles Shopping Centre Holdings Limited.
The sudden closure of the company that operated the St Giles Centre in Elgin, which opened in 1992 with 28 outlets, is outlined by James Dewar and Alistair McAlinden, of Interpath Advisory, who were appointed joint liquidators in April last year.
The liquidators said: “The company operated the centre, letting out units to retailers, and managing the centre’s common operations through a service charge account.
“The director advises that it was originally acquired by the related party in 2008 for approximately £19.9m.”
However, the centre “faced challenges throughout its operation and had always struggled to find and retain retail tenants”.
The liquidators said: “In recent years the level of vacant units increased, due to a combination of out of town retail parks opening in Elgin which reduced tenant interest in the town centre, the growth of internet shopping as a retail channel and the impact of supermarkets extending product ranges from traditional groceries.”
The company covered the costs of paying the service charge, insurance and rates for the empty units, but “this proved to be challenging as the level of rent received for the occupied units had reduced”.
Additional challenges
The liquidators said: “In order to preserve cashflow, in 2019 the company entered into an agreement with its loan creditor to cease repayments on its facility. The balance due at that time was £3.4m.
“During 2020 the Covid-19 pandemic resulted in additional challenges for the company.
“The centre was closed for significant periods of time which adversely impacted the company’s financial results."
They said: "However, the company did not qualify for vacant rates relief for unoccupied units, and it was at this point that the company fell into arrears of non-domestic rates.
“Since then, the company has faced significant cashflow challenges and the director’s statement of affairs shows significant creditor arrears.”
In addition to the loan creditor debt of £3.4m there were sums owed including to Moray Council of around £700,000. Trade creditors were owed £470,800.
Mr Dewar and Mr McAlinden said in the new report: “Based on current estimates, there will be insufficient funds to enable a distribution to Close Brothers Limited.
“Based on current estimates, there will be no distribution to unsecured creditors.”
Creditors included HM Revenue & Customs, Holland House Electrical Supplies, McDonald & Munro Limited, Montagu Evans, Perfect Hygiene Limited, Speyside Whisky Limited, Total Energies Gas & Power Limited, Upland Developments Limited, Vodafone and Waterstones.
Share