More than 100 jobs have been lost after a County Durham energy consultancy collapsed into administration.
Great Annual Savings, based in Seaham, had spent 10 years helping businesses to reduce their energy costs – but a host of factors, including the impact of Covid-19 on energy consumption, as well as the energy crisis and ongoing war in Ukraine, meant the business was no longer able to continue.
The former Sunderland AFC shirt sponsor, based in Seaham, County Durham, had put together a restructuring plan in a last ditch bid to counter a winding-up order tabled by HM Revenue and Customs, but the court didn’t sanction the plan at a hearing this week and the company was immediately placed into administration.
Read more: Heartless South Shields fraudster used widower's bank card after claiming to be a 'distant relative'
Martyn Pullin and Allan Kelly of FRP Advisory confirmed they were appointed as joint administrators to The Great Annual Savings Company Limited (GAS) on May 16.
Mr Kelly, a partner at FRP, said: “GAS had been a profitable, growing business prior to Covid-19 but has been significantly impacted by the pandemic and the subsequent energy market crisis over the last 18 months. The directors put forward one of the first Restructuring Plans for a SME trading business to reduce its liabilities to sustainable levels.
“However, the court did not sanction the plan and the directors had no alternative but to seek the appointment of administrators. Regrettably, this also meant all 115 staff were made redundant on appointment. We’re now supporting impacted staff and preparing for an asset sale.”
Mr Justice Adam Johnson handed down a judgement which detailed how there were 15 classes of creditors within the restructing plan and that at 12 of the 15 meetings, the plan achieved 100% support. However, HMRC rejected the plan at one meeting, and at another meeting two out of three energy suppliers also voted against the plan.
He said: “Historically, the operations of the company and the parent company have been successful, on paper at any rate. In fact, in August 2019, the parent company returned a dividend to shareholders of roughly £19m.
“Under the plan, the estimated return to HMRC is £600,000 - the equivalent of 9.1p/£, assuming a debt of £6.6m. I consider that HMRC acted rationally in voting against the plan. Given its status as a major in the money creditor, and the strong terms in which it has voiced its objection, not only in light of the facts of this particular case but also given its critical public function as the collector of taxes, I think HMRC’s views deserve considerable weight. The company has not discharged the evidential burden of showing that HMRC would not be any worse off under the plan.”
An HMRC spokesperson said: “We are reviewing the findings of the court. We will continue to support customers with tax debts and do everything we can to help those who engage with us to get their tax affairs in order, including offering payment plans.”
READ NEXT
- The North East's rat hotspots revealed
- Live power cables outside Newcastle primary school cut in 'extremely dangerous' act of vandalism
- County Durham triathlete suffered serious brain injury after being hit by cyclist
- Doorman jailed after planting fake bomb at Seaham pub to 'look like a hero'
- County Durham man fined more than £1,400 after his rubbish was found dumped in country lane
