An employment charity that collapsed last year will now pay creditors less than was initially expected, according to the administrator’s progress report.
Tomorrow’s People entered administration in March last year citing a “tough fundraising landscape”, with most of its 135 staff losing their jobs.
Some 20 retail staff were transferred to the Shaw Trust, which took over the charity’s four shops.
The charity, which said it owed an estimated £1.63m to creditors when it collapsed, appointed Lane Bednash from CMB Partners as the administrator.
Last week, Bednash filed an administrator’s progress report with Companies House, setting out the action taken in the six months since September last year to wind down the charity and future plans.
It said the charity has now paid all arrears to preferential creditors, estimated at £72,000, which mainly comprise of staff that were made redundant.
Bednash had previously estimated the amount the charity owed to unsecured creditors at £1.56m, but in the latest report this has been revised down to £1.04m.
The report says this revaluation is due to reductions in staff redundancy costs, leasehold property costs and other costs such as vehicle and equipment hire.
Unsecured creditors are now expected to receive 61.7p in the pound, slightly lower than the original estimate of 65p.
The report says that the charity, which had an income of £4.8m for the year to March 2017, plans to enter a company voluntary arrangement (CVA) as an exit route rather than going into liquidation.
This means the charity will try to reach a voluntary agreement with its creditors regarding repayment over a period of time.
Bednash has drafted a proposal for a CVA, which she says will seek to offer a better outcome for creditors than if the charity were placed into liquidation.
She called for a “significant number of creditors” who have not yet done so to submit claims so she can prepare an updated estimated outcome statement.
£160,000 returned to donors
At the time of administration the charity held £594,712 in restricted funds, some donors withdrew restrictions and the amount was reduced to £239,530.
So far £160,000 has been returned to donors and the administrator is preparing to return a further £79,530 to donors.