creditors owed around #80m.
Craig Murray, a director of the Clydesdale Group and company secretary
of Clydesdale Electrical Stores, confirmed that the 1993 accounts were
But he insisted there was no breach of company law because an
extension to the December 3 deadline for filing the accounts -- which
would have shown mounting losses -- had been granted by Companies House.
Mr Murray said the only reason for not filing the accounts was that
the audit had not been concluded.
Facing questions from the floor at the first meeting of creditors, he
also denied that management had overvalued stock in last year's aborted
bid to raise #40m during an attempted flotation on the Stock Exchange.
But he confirmed there had been an approach by an interested party to
buy the business soon after the aborted flotation. Herald sources say
that offer was not only worth #39m but could well have guaranteed
Clydesdale's future -- and even brought immediate growth.
However, Mr Murray was adamant that shareholders were not informed
about it because nothing had been put in writing and it was revocable.
Clydesdale went into receivership in January after a dramatic
eleventh-hour appeal to its banks and investment institutions for a #4m
lifeline to secure its immediate future was turned down.
That rebuff subsequently led to liquidation. Some 2500 unsecured
creditors can now expect to receive just 20p to 30p in the pound, and
some 17,500 customers may lose out on claims from money-back schemes
operated by Clydesdale.
Major unsecured creditors include suppliers such as Sanyo, Phillips,
Mitsubishi, and Sony, who are owed #30m according to joint liquidators
Roger Powdrill and Ralph Preece, of Touche Ross.
Secured creditors, including the Bank of Scotland, the Royal Bank of
Scotland, Barclays, and NM Rothschild and Sons, will recover the near
The receivership costs alone are estimated at #3.3m. When liquidation
fees are added, the total will be well above that which the Clydesdale
management claimed would have been sufficient to keep the group in
However, the 150-strong audience at the meeting in the Glasgow Royal
Concert Hall appeared little interested in the reasons behind the
Clydesdale Group's liquidation or its effects on many businesses owed
Instead, most questions involved the money-back promotions under which
customers who bought goods were guaranteed to receive their money back
eight years later.
Mr Powdrill confirmed that just one of the three schemes is covered by
an insurance policy.
The 17,500 people in the refund scheme are being treated as contingent
creditors because their claims against Clydesdale do not become
effective until 1998 or 1999.
The liquidators are determined unsecured creditors should not have to
wait that long before receiving any dividends from recent sales of
assets. It is likely they will ask the Court of Session to clarify the
One option being considered is to have some of the creditors' purse
ring-fenced for customers who become genuine creditors in 1998 and 1999.
The pay-out could amount to #6.5m -- but no-one yet knows if the
insolvency means that their claims will automatically fall.
The contingency creditors have been advised to investigate their
rights as a third party and seek legal advice.
Melvin Mannion, one of the creditors at the meeting, said later he was
Mr Mannion, managing director of a company which installed satellite
dishes for Clydesdale customers in Manchester, Stockport, Bolton,
Preston and Stoke, said he has had to lay off four of his eight staff.
Alexander Barr Screenprint, of Finnieston, Glasgow -- owed #58,000 --
said it faces going out of business, with the loss of 10 jobs.
Mr Powdrill said he will be considering the possibility that the
Clydesdale Group could have been saved by a #4m injection by the banks,
but added: ''Even the directors concede that would not have solved
problems in the short-term and would have provided only some relief.''