ICSM Consumer Insolvency News: online car dealer owed £19.73m to unsecured creditors when it went bust in 2022
By Harry Mottram: It was supposed to be how used cars would be traded in the future. You check out a car online, pay up and the car is delivered to your door next day as good as new. Except the firm only lasted two years and ran up debts quickly despite generally healthy sales. The costs of distributing the cars to customers and overall running costs led to an overdraft of more than £2m in 24 months. Some three years later the administrators Adam Stephens and Greg Palfrey of Smith and Williamson (now Evelyn Partners) have found close to £20m was owed to numerous people and parties including the taxman, the founders, lenders and customers.
The most disturbing aspect of the financial disaster was the way a number of the 1,500 cars listed on the firm’s website were transferred to new owners just before the insolvency. Ian Carrotte of ICSM said that didn’t sound right and clearly the administrators needed to get to the bottom of it as they may be able to recover some of the vehicles as assets to be realised.
Peter Waddell founded the firm with a base in Peterborough and distribution hubs in Corby and East London which inevitably meant long distances for deliveries if the next day delivery promise was to be honoured. On June 1st 2022 the company ceased trading and made the staff redundant immediately leaving them unpaid and numerous customers without a car they had paid for. Waddell blamed the firm’s funders for withdrawing borrowing facilities after rivals Cazoo and Cinch saw their share prices fall which prompted lenders to cut off funding.
Ian Carrotte of ICSM said used car traders come and go but this idea of online distributors was fairly new and although there are still companies that operate this way the business has always had a number of failures, and this was a spectacular and very expensive one for unsecured creditors. Now some years later £19.73m is still owed to unsecured creditors with little or no chance of that money being recovered.
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