Thousands of victims of the failed overseas cash firm Crown Currency Exchange have still to send vital forms to help reclaim some of their lost money.
Only 8,000 of the 13,000 victims have sent back 'proof of debt' forms, according to the official report to creditors (those owed money) released today by Crown's joint administrators MCR and SPW (see the Crown goes into administration MSE News story).
The leaves 5,000 still to claim cash that has disappeared following the company's collapse last month.
View the report by clicking on the Crown creditors report link, though it's a large file so please be patient while downloading.
The bad news, as suspected from the outset, is victims are unlikely to see much more than 15% of their money when the company's assets are distributed to creditors.
Most handed over sterling hoping to get foreign currency, which has not arrived. The majority of transactions were worth between £100 and £20,000 though a few were worth between £100,000 and £400,000.
The 8,000 forms sent so far relate to £16.4 million in owed currency. The total is £20 million, which means £3.6 million is unaccounted for.
Harold Sorsky, from SPW, says: "This is a very challenging situation that we are having to unravel. We are working hard to resolve the problems faced by customers.
"We are continuing to urge any former customers of CCE who have not already done so, to contact us and ensure they complete a proof of debt form which is available on the joint administrators' websites."
How much will victims get?
The administrators say the percentage of cash people will get back is still unclear.
Yet looking at the figures published in the report, the total is likely to hover around the 15% mark at best.
Crown has assets of £3.6 million in cash and equipment, while it owes £20 million to customers, £154,700 to the taxman and nominal sums to staff and suppliers.
This indicates an 18% payout on first glance, but it's not that simple.
The £3.6 million asset pool will drop once the administrators' fees have been deducted. Already, the administration has cost almost half a million pounds, though the initial set-up costs tend to be far higher at the start of any process.
The administrators may yet add to the pool if they find evidence to successfully take legal action against any liable parties to seize their assets, yet it is too early to know whether that will happen, or whether there are any grounds for a claim.
What else does the report state?
Key points also raised include:
Those who ordered money shortly before the company's demise may be placed higher up the priority list when the company's funds are dished out to creditors. Between 29 September and 4 October (the dates, respectively, when Crown's bank Barclays froze its account and the company went into administration) Crown took around £1.1 million in customer payments (see the Limited hope for some Crown victims MSE News story).
The administrators says no consumer protection is in place (see the Treasury rejects currency regulation reform MSE News story).
- Barclays has been exonerated of any blame after some questioned why it failed to help close Crown earlier. In fact, the administrators say the bank tried to enquire about the firm's business model but "it appears from the administrators' investigations that information provided by the companies [Crown and its holding company, Crown Holdings] in relation to its hedging strategy was inaccurate".
- The administrators say the financial position of the company is uncertain, adding: "No management accounts were ever produced and there is little correlation between accounts filed at the Registrar of Companies [Companies' House] and the internal accounting system. The administrators are continuing investigations into this issue."
Further reading/Key links