Merchant Capital, the collapsed structured products arm of Merchant House Group, owes over £1.5m to its creditors including around £325,000 to HM Revenue & Customs.
At a creditors meeting last week, creditors were given a statement of affairs document prepared by Merchant Capital’s liquidator Shipleys. The document, seen by Money Marketing, shows Merchant Capital owes a total of £1,537,923 to 74 creditors.
Shipleys estimates the total assets available for preferential creditors is £492,384, leaving a deficit owed to creditors of £1,045,539.
Shareholders own £641,000 in issued and paid up capital, bringing the total deficit owed by Merchant Capital to £1,686,539.
Claims for employee arrears, holiday pay and redundancy payments totalling £20,512 will be paid first as part of the liquidation process. But claims totalling a further £55,182, also owed to employees, and an additional £48,623 in redundancy payments are being treated as unsecured non-preferential claims, meaning some or all of this money may not be paid.
Money Marketing understands a number of staff may not have been paid since 30 October.
HMRC, also a non-preferential creditor, is owed £324,887, made up of £210,442 for unpaid PAYE and national insurance contributions, £61,265 in unpaid corporation tax and £53,180 in VAT.
Among the creditors is Merchant Capital custodian and administrator Reyker Securities, which is owed £56,232. Director of structured products John Gracey is also listed as a creditor and owed £23,694.
Shipleys and Merchant Capital were unavailable for comment.
Merchant House Group, and its IFA arm Merchant House Financial Services, continue to trade.
Separately, Tenet has taken out a debenture against Merchant House Group’s IFA arm Merchant House Financial Services, which continues to trade. Outgoing Tenet distribution and development director Keith Richards says the charge relates to a historic business development loan, and that given the issues at the parent company it made sense to formalise the loan. Merchant House Group cancelled trading on the Alternative Investment Market in November after the company failed to raise sufficient funding.