Administrators' report reveals broker owes millions and has insufficient funds to pay out.
Close Brothers and unsecured creditors of Ignition Select are set to lose money following the collapse of the motor broker.
Ignition Select went into administration in July 2017 when Gary Shankland and Kirstie Provan of Begbies Traynor (London) were appointed as joint administrators.
According to a progress report filed by the joint administrators, which outlines how much money Ignition Select owes its secured and unsecured creditors, Ignition Select’s current balance of £162,682 will not cover the amount owed.
The broker owes its secured creditor Close Brothers £2.2m and the report noted that while Close Brothers will receive some of it, it is “anticipated that there will be a significant shortfall”.
Insufficient funds
For the unsecured creditors total claims of £404,179 have been received.
The administrators detailed that it is unlikely the unsecured creditors will be paid back due to “insufficient funds to enable a dividend to be paid”.
A previous Statement of Affairs document, made up to 18 July 2017, listed Hiscox Underwriting, CII Group, Clements Europe, Open GI, Confused, GoCompare, Comparethemarket, Moneysupermarket and the Financial Conduct Authority and The Automobile Association as among the company creditors.
Ignition Select’s unsecured creditors also includes broker Call Connection, which also went into administration in July 2017.
Ignition Select and Call Connection are legally separate but the two businesses have their registered office in the same building and both are majority owned by entrepreneur Graeme Kalbraier.
In addition, preferential creditors of Ignition Select were asked to submit any claims to the Redundancy Payments Office (RPO), but so far no claims have been reported.
However, insurers Clements, AA and Ignition have been paid £1.2m in total from trust fund accounts.
Investigations
The report also noted that investigations have been made into the company and its directors, with the administrators adding they are “considering our findings and therefore it is not possible to report on this currently”.
Furthermore, investigations into the company’s affairs are still ongoing and the administrators are now considering whether to seek the approval of Close Brothers to extend the period of administration beyond the initial 12 months.
It is expected that the company will dissolve after administration is completed.
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