Bolton says he is proud of what he and his team have achieved with the firm both before and after last August when funding for all mortgage propositions became strained. He says that there is enough cash in the business to allow redundancy packages for all the remaining 26 staff. He also holds out the possibility that he may buy back the firm as part of a consortium in the next few weeks but that this would not be in lending.
KPMG joint administrator Allan Graham, confirmed that the business will continue to trade while they seek a going concern sale. He said: “Edeus has successfully transformed its business model to focus on credit assessment and collections work and has won contracts with several major companies. However, the conditions in the housing and financial markets have led to the directors appointing administrators.
“Over the next few days we will be evaluating the business as we work towards securing a going concern sale.”
KPMG says all customers who are currently on the Edeus mortgage book will be unaffected by this announcement and their loans will continue to be serviced as normal.
Talking to Money Marketing, Bolton says: “Today is a sad day. But what we have achieved in a short time confirmed the ability of that group of people to deliver what they said they would. We took the whole intermediary proposition on to another plain with the likes of GMAC and HBOS trying to catch up with us.
“We are clearly a victim like many of our peers of this credit crunch. We have survived 14 months and have been doing a good job for a number of our business partners in the interim otherwise we would have not have got funded this far. We have endeavoured to honour the asset that was left over last August. We did manage to get some trades away which carried on paying the bills.”
Bolton admits the writing was on the wall in the last few months. But he believes the firm has handled the last few difficult months well. “Not only did we fund out the entire mortgage pipeline during that time with our two banks Merrills and Deutsche, we kept on the right side of the FSA. Everything we have done has been TCF.
“Last month we managed to finalise the sale of the two special vehicles one with the Merrills warehouse, one with the Deutsche warehouse back to those two banks where each have got circa £300m worth of assets. It is good quality. Those guys are probably going to hold on to it to maturity. That is what I would do.” he says.
Bolton says: “We reached the time where the two banks have said, you have had a good run, if you can’t find an investor to move the business on, we are going to call it a day at the end of September and that is what they have done.”
Bolton says that becoming an asset manager was not sufficient to keep the business going.
He says: “We have had one recent success in terms of doing due diligence work but not enough to keep the business alive.”
“There is clearly enough cash in the business to keep the staff on for the next few weeks. This is an orderly process. As part of the negotiations with our banks, we have agreed money for redundancy terms.” He adds that all those who have left the business previously have also received redundancy terms.
Edeus has had an insolvency practitioner involved with the business since last December to manage this process, with Bolton saying there is a negligible amount owed to creditors.
He adds: “I am not discounting, as part of a consortium buying back the business, and I have told the administrator, I am interested in buying back the business. There is a chance we may be coming back in the next few weeks.”
Bolton emphasises that no money is owed to brokers and that Edeus completed on its last loan six months ago. “I am proud of what we did both pre last August and we did post last August.”
Premier Mortgage Service managing director John Malone says: “As the first mortgage distributor/facilitator to approve Edeus for its panel it is right and fitting that we comment as it moves into this administrative position. In the short period as a lender, it provided our industry with innovative, creative and quality products which intermediaries and clients enjoyed the benefit of. Today is a sad day for our industry. I would thank all Edeus employees past and present for all their support.”