Michelle Mone-linked PPE Medpro wound up after being ordered to repay £148m
PPE Medpro, a company affiliated with Baroness Michelle Mone, was sued in the specialized companies court.
The decision by a judge at a hearing on Thursday could mean the company is unlikely to see much of the £148 million the government owes it after it was found to have breached a contract to supply 25 million surgical gowns during the coronavirus outbreak.
PPE Medpro, a consortium led by Lady Mone’s husband, businessman Doug Barrowman, was ordered to pay the sum after losing a High Court case against the Department of Health and Social Care (DHSC) in October.
However, on September 30, one day before the decision, an application was made to the administration because the money was still not paid.
At a hearing in the Insolvency and Companies Court on Thursday, lawyers for the three joint administrators requested that PPE Medpro be kept in administration to pay some creditors.
Lawyers for DHSC, an unsecured creditor, asked the judge to liquidate the company, which they said was “hopelessly insolvent”.
Bankruptcy and Companies Court Judge Sebastian Prentis decided to liquidate the company in a decision.
He said: “It remains my firm view that the correct course is now to sack the directors and force the company into liquidation.”
Records submitted by PPE Medpro administrators last month showed that as well as money owed to the DHSC, HMRC had also claimed £39 million in tax from the company.
But filings revealed there was only around £600,000 to pay unsecured creditors.
Simon Passfield KC, a joint administrator of PPE Medpro, said in written submissions that the company had a secured creditor called Angelo (PTC) Limited, which is registered in the Isle of Man according to Companies House.
He continued that DHSC was the firm’s largest unsecured creditor and had “expressed a clear preference for the company to proceed immediately into compulsory liquidation”.
In court, the barrister told PPE Medpro had “sufficient property” to repay its debt to Angelo of around £1 million and administrators believed “a return could also be made to unsecured creditors”, including DHSC.
Mr Passfield said the company had “potential” legal claims against “third parties” which, if successful, “could result in a significant recovery” of funds, but no further details were given in court.
He said: “Administrators are as well placed as any liquidator to achieve the best outcome for creditors as a whole.”
In written submissions, DHSC’s David Mohyuddin KC said there was “no realistic alternative” to liquidate the company.
He said: “The only order that the court can and should make is the liquidation of Medpro.”
He continued: “The court’s discretion to order liquidation against Medpro clearly comes into play: it is clearly and very significantly insolvent.”
