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PPE Medpro, a company associated with the Baroness Michelle MoneA specialist company has been locked up in court.
The ruling by a judge at a hearing on Thursday could mean the government is unlikely to get most of the £148m owed by the company after it was found to have breached a contract to supply 25 million surgical gowns during the coronavirus pandemic.
PPE Medpro, a consortium led by Lady Mone’s husband, businessman Doug Barrowman, was ordered to pay the sum after it lost a High Court battle against the Department of Health and Social Care (DHSC) in October.
but applied for Administration On 30 September, a day before the verdict, the money was still not paid.
At a hearing in the Insolvency and Companies Court on Thursday, barristers for the three joint administrators asked for PPE Medpro to be placed into administration to pay off some creditors.
Barristers for DHSC, an unsecured creditor, asked a judge to wind up the company, which he said was “hopelessly insolvent”.
In a ruling, Insolvency and Companies Court Judge Sebastian Prentice put the company into liquidation.
He said, “I am of the firm view that the right course now is to dismiss the administrators and essentially wind down the company.”
Records filed by PPE Medpro’s administrators last month revealed that, as well as the money owed to the DHSC, HMRC was also claiming £39 million in tax from the company.
But filings revealed he only had £600,000 available to pay unsecured creditors.
Simon Passfield Casey, for joint administrators of PPE Medpro, said in written submissions that the company has a secured creditor, Angelo (PTC) Ltd, which is registered in the Isle of Man, according to Companies House.
He further said that DHSC was the company’s largest unsecured creditor and had “expressed a clear preference to immediately move the company into compulsory liquidation”.
In court, the barrister said PPE Medpro had “sufficient assets” to repay debts of around £1m to Angelo, and the administrators believed “unsecured creditors would also receive returns”, including DHSC.
Mr Passfield continued that there were “potential” legal claims by the company against “third parties” which, if successful, “could lead to a substantial recovery” of the money, but gave no further details in court.
He said: “The administrators are in the best position of any liquidator to achieve the best outcome for creditors overall.”
David Mohiuddin Casey, for the DHSC, said in written submissions that there was no “realistic alternative” to closing the company.
He said: “The only order the court should make is that MedPro be closed down.”
He added: “The court’s discretionary power to make a winding up order against MedPro is clearly encumbered: it is clearly and very significantly insolvent.”