THE JOINT administrators of failed firm Pagan Osborne have confirmed that they are pressing ahead with the sell-off of its assets after gaining approval for their plans from the firm’s creditors.

Tom MacLennan and Iain Fraser of FRP Advisory were appointed as Pagan Osborne’s administrators at the start of September after the firm ran into financial difficulty as a result of taking on a number of subprime loans at the same time as its property arm experienced a drop-off in activity.

Fife firm Thorntons bought the business out of pre-packed administration, with Mr MacLennan noting that the deal would result in a better outcome for Pagan Osborne’s creditors than if the firm had simply been wound up.

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Under the terms of the administration, which is expected to generate between £18,000 and £148,000 for preferential creditors and between £2 million and £2.5m for unsecured creditors, Thorntons will gather Pagan Osborne’s debts on behalf of Mr MacLennan and Mr Fraser in return for a five per cent commission.

Thorntons has already paid the administrators £230,000 for Pagan Osborne’s work in progress and a further £15,000 for a range of fixed assets.

Much of this will have been eaten up by the costs associated with the sale, with FRP Advisory charging fees of just under £100,000 for putting the pre-pack deal together and Shepherd & Wedderburn charging £82,000 for the legal work it did in preparing the sale agreements and associated documentation.

With the exception of chief executive Alistair Morris, all Pagan Osborne personnel transferred to Thorntons, although there will be 48 voluntary redundancies and up to ten compulsory redundancies.