An embattled business owner has placed his business in liquidation, claiming that receivers from Deloitte charged as much as $200,000 for one week’s work as he fought to save his $68.5 million business.
A week ago, Deloitte was appointed by HSBC bank as receivers to shipping company, Skelton Sherborne, and a team from the accounting firm took control of trading the business and established themselves in the businesses’ offices.
Since then the business has been battling to save his business and has been detailing the process of the receivership in regular blog posts.
The business owner thought he had turned a corner when he was handed back partial control of the business on Friday but as he told SmartCompany at the time it turned out to be a “hospital handpass from hell”.
Although Deloitte left Skelton Sherborne’s offices, the receivers still held control of all the businesses’ finances, making it difficult for Brad Skelton to resolve any of the problems the business faces.
Skelton says he was then hit by another blow after discovering Deloitte’s fees for one week’s work are likely to be $200,000.
“I was shocked at Deloitte’s fees for essentially one week’s work, the estimate so far is $200,000,” Skelton told SmartCompany.
He says during the one week period Deloitte was in full control of trading the company, the number of staff based at Skelton Sherborne varied at up to four or five people but he is still shocked by the extent of the fee estimate.
“That is a staggering fee load for us to cope with at this time as well and obviously they are still working,” Skelton says.
SmartCompany understands that Deloitte disputes that the fees charged for one week will be $200,000.
A spokesperson for Deloitte told SmartCompany the receiver did not discuss its fees.
“[Deloitte’s] first priority was to commence a review of the business’ financial position, and it would have been imprudent to take on the potential liability of new business during this time,” says the spokesperson.
He says Deloitte’s primary responsibility is to creditors – secured and then unsecured.
“The receivers have regularly communicated with customers since appointment,” he says.
The fees became a moot point yesterday as Skelton announced he had placed Skelton Sherborne in liquidation with the appointment of SV Partners as liquidators.
Skelton placed the blame for the liquidation firmly on the receivers’ shoulders in a blog post entitled “We lost our battle”.
“The Deloitte receivership conducted on behalf of HSBC has been catastrophic to the company’s future viability,” Skelton posted on his blog.
He said he could not successfully salvage the business while the bank accounts, debtor book and statutory refunds were kept under the control of Deloitte.
“Effectively Skelton Sherborne’s cash flow was cut off and as a consequence the company became insolvent. As a director I was compelled to appoint a liquidator,” he said.
In his post Skelton apologised to the people Skelton Sherborne owes money to.
“I am in disbelief that such a good and profitable company with a great track record can lose the support of its bankers and end up in this position with so many innocent people hurt along the way,” he said.
SmartCompany contacted HSBC but the bank declined to comment.
This article was updated on March 23, 2017.
Cara Waters is a former SmartCompany editor. Previously, Cara was a senior reporter for the Financial Times’ website and worked for The Sunday Times in London.
