This article was
wrtitten by Andrew Field
and appeared on the
Money Telegraph website
A subsidiary of one of London's oldest auction houses,
Coys, which specialises in the sale of classic cars, has
ceased trading with debts of £1.65m.
"We have applied for a CVA [Creditors' Voluntary
Agreement] for one of our companies," said Coys' director
Douglas Jamieson. "We are negotiating with our main
financiers and with creditors, and have appointed a supervisor."
Ashok Bhardwaj of Middlesex, the company's nominee supervisor,
said: "Coys of Kensington (Sales) Limited is insolvent
and has ceased to trade. Our proposal went out last Friday
for a creditors meeting on February 10. There are about
30 unsecured creditors, most of them private individuals
and most of them in the UK."
Coys of Kensington last held an auction of more than 700
lots in the Royal Horticultural Halls on December 4. The
majority of the 33 creditors are sellers whose cars were
successfully sold at that auction but who have yet to receive
a settlement, well past the 35 days stated in Coys' conditions
of business for that auction. These include Peter de Savary
and Lord Langford.
One creditor, who has not received a settlement cheque
for his pre-war classic that sold on Dec 4, said: "I've
lost the car, I've lost the money, everything. That was
my pension. Why in hell's name was buyers' money not kept
in an escrow account?"
Several creditors have questioned the further involvement
of the Coys name in the Autosport auction sale in Solihull
on January 10.
The company that held this sale, however, is Coys Limited,
which was incorporated in January 2003 and is owned by people
who are connected with Coys of Kensington.
Coys Limited recently bought out the tangible assets of
that company for £320,000 and has continued to trade
as an auctioneer of classic cars.
Ashok Bhardwaj confirmed the asset valuation was "more
than a fair amount of their value". In explanation
for the sale, the company's proposal to its creditors sent
out on January 16 states: "The company sustained heavy
losses against budgeted projected incomes.
"In order to ensure continuity of trading in the auction
business, we decided that it was in the best interest of
the creditors for all new business to be continued through
Coys Limited to which would be sold all the assets of the
company including the goodwill and which in future would
continue the business formerly conducted by the company."
The creditors' proposal suggests the setting up of a scheme
funded in part by Coys Limited, which will settle the creditors
over three years with an estimated 23.98 pence in the pound.
If creditors do not accept the proposal, the company will
be forced into liquidation.
The proposal claims the debts have arisen because of a
failed expansion plan in Europe and the US and a resistance
to trade in the UK market.
"This isn't just bad for Coys," said one auctioneer
competitor, "this is bad for all of us."
FOC Footnote
Coys is perhaps best known in the Ferrari world for their
Historic Festival, which took place at Silverstone from
1993 to 2000. In 1997, 750 road and racing Ferraris came
together to celebrate 50 years of our beloved marque. Anyone
who attended the festivals will remember them with affection.
There was a final, less successful event at Rockingham in
2001, but the Goodwood Revival has since taken motor racing
nostalgia to the next level.
