REPORT: Coventry City of Culture Trust unlikely to repay debts
Over £4 million is owed to creditors, but some won't see a penny.
Last updated 2nd May 2023
The charity set up to run Coventry’s City of Culture year will only be able to repay debts to former employees and some of what it owes to HMRC, joint administrators estimate.
Groups owed more than £1 million, Coventry City Council and Assembly Festival Group, won’t see a penny – unless the Trust recovers significantly more assets than predicted and no other creditors come forward.
A spokesperson for Coventry City Council said: “Although it is still uncertain how much, if any, money we will receive once the administration process has finished, the council will do all we can to ensure it is as much as possible."
But administrators believe it’s unlikely creditors will receive any money at this stage, according to a ‘notice of proposals’ sent out on 25 April.
Former employees of the Trust must be paid first as preferential creditors and are due around £24,000 and then a debt of over £100,000 to HMRC has to be covered.
HMRC will get only 70p in the pound of this – and the over 35 other creditors who are ‘unsecured’ will get nothing, the report says.
Those left out of pocket include West Midlands Police.
The report shows little over half a million pounds is expected to be realised from the Trust’s assets which are valued at £2.8m, according to reports.
Some of this amount is uncertain as it includes an auction of goods forecast to bring in £170,000 and less than £20,000 in ‘book debts’ still being chased.
But the majority of it will go on the costs of administration, leaving less than £100,000 to be distributed out to creditors.
Other Coventry groups listed as being owed five figure sums including Culture Coventry, The Albany Theatre and Coventry University.
The level of deficit to creditors, including over £30,000 owed to HMRC, will total just under £4.25 million.