Administrators handling the disposal of Tayside Aviation following its closure on 20 April 2023 have revealed that they are investigating financial moves made by the school’s owner in the run-up to the company’s collapse with debts of £2.5m.
As reported previously, the sudden collapse of Tayside Aviation led to the immediate loss of 20 jobs and dozens of students stranded part-way through their training, many of whom have been left thousands of pounds out of pocket.
Now, a report published by administrators has shown the level of debts in the business. It also shows the prospects of creditors being reimbursed.
The report shows that administrators Geoff Jacobs and Blair Nimmo from Interpath Advisory are investigating ‘floating charges’ levied by school owner Tony Banks and a company he owns in the weeks before administration.
Companies House documents show two floating charges were made in favour of Anthony Banks on 23 March and a company he owns, ARB Scotland (Investments) Ltd on 17 April. A floating charge is a security held over assets, normally made to lenders issuing funds to a business, and gives them preferential creditor status in the event of a company failing.
Following concerns raised by other creditors owed sums by the defunct ATO, the administrators have sought legal advice “on the validity of the charges” created to give Tony Banks and ARB Scotland (Investments) Ltd preferential creditor status. They are investigating “due to the close proximity of the registration dates of the charges and the insolvency of the company”, the report said.
It adds: “We have already had various matters brought to our attention by several creditors who have requested that we investigate antecedent transactions and activities.
“We have been collating and considering all of the matters raised and will progress with the necessary actions or further investigation work as appropriate and in accordance with our statutory duties.”
The report adds while there was “significant” interest in the business, there were no offers to buy the whole operation when a closing date of 10 May was set. As a result, administrators are now considering selling the assets.
The report adds: “We received a significant number of enquiries regarding the business and assets. No substantive offer for the business was received albeit offers, ultimately for the assets, have been received. Accordingly, we are currently assessing the position in order to determine the appropriate next steps, which may include offering the assets for sale on a piecemeal basis.”
Meanwhile, dozens of students who were part way through their commercial pilot training programmes have been left thousands of pounds out of pocket.
However, the report suggests there may be a payout for the students, who are ranked as unsecured creditors.
It adds: “Based on the information currently available, we anticipate that RBS, a secured creditor (which is owed £32,329.99), will recover its indebtedness in full.
“Dividend prospects for the other secured creditors will depend upon the level of funds available for distribution and our investigations into the validity of the charges.
“Based on current estimates, we anticipate that ordinary and secondary preferential creditors should receive a dividend.
“Based on current estimates, there may be a dividend to unsecured creditors. We have yet to determine the amount of this, but we will do so when we have completed the realisation of assets and the payment of associated costs.”
Administrators estimate they may be able to raise about £1m from the sale of the company’s assets.
A meeting is being convened for creditors, to be held on 14 June.
The administrator’s report can be viewed here
