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Joint Administrators’ proposals for achieving the purpose of administration

TCG Pubs Limited High Court of Justice, Chancery Division, Companies Court Case no. 6430 of 2015

TCG Bars Limited High Court of Justice, Chancery Division, Companies Court Case no. 6431 of 2015

TCG Taverns Limited High Court of Justice, Chancery Division, Companies Court Case no. 6432 of 2015

TCG Inns Limited High Court of Justice, Chancery Division, Companies Court Case no. 6433 of 2015

TCG Management Services Limited High Court of Justice, Chancery Division, Companies Court Case no. 6434 of 2015

(all in administration)

20 November 2015

TCG Bars Limited, TCG Bars Limited, TCG Inns Limited, TCG Taverns Limited, TCG Management Services Limited – all in administration

Page 1

Contents 1. Abbreviations used in this report ................................................................................................................. 2

2. Purpose of this report .................................................................................................................................... 3

3. Summary of the possible outcome for creditors .......................................................................................... 5

4. Background, strategy and progress .............................................................................................................. 6

4.1 Background ............................................................................................................................................... 6

4.2 The circumstances giving rise to our appointments .............................................................................. 6

4.3 Pre-administration costs .......................................................................................................................... 7

4.4 Connected party transactions .................................................................................................................. 8

4.5 Actions taken on our appointment .......................................................................................................... 8

4.6 Strategy, asset realisations and progress to date .................................................................................... 8

Sale of business ................................................................................................................................... 8

Remaining pubs .................................................................................................................................. 9

Cash at bank ...................................................................................................................................... 10

Employees ......................................................................................................................................... 10

4.7 Objective of the administrations ........................................................................................................... 10

4.8 Receipts and payments accounts ............................................................................................................ 11

4.9 Outcome for creditors ............................................................................................................................. 11

Secured creditors ............................................................................................................................... 11

Preferential creditors ......................................................................................................................... 12

Unsecured creditors ........................................................................................................................... 12

4.10 Ending the administration ...................................................................................................................... 13

5. Our proposals for achieving the purpose of administration ...................................................................... 14

6. Statement of affairs ...................................................................................................................................... 16

7. Statutory and other information relating to the administrations .............................................................. 17

8. Pre-administration costs ............................................................................................................................. 18

9. Receipts and payments accounts ................................................................................................................ 20

10. Group structure ........................................................................................................................................... 25

11. Copy of the statements of affairs ................................................................................................................ 26

12. Copy of SIP16 – Pre-packaged sales in Administration ............................................................................ 27

The statements of affairs are contained in separate documents when viewed on our website. The SIP 16 is contained in a separate document when viewed on our website.


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1. Abbreviations used in this report

The following abbreviations may be used from time to time throughout this report:

“the Administrators”, “us” or “we” David Christian Chubb and Michael John Andrew Jervis of PwC

“the Companies” TCG Bars Limited, TCG Pubs Limited, TCG Taverns Limited, TCG

Inns Limited and TCG Management Services Limited

“the Group” Tattershall Castle Group Limited group of companies as shown on

the Group structure at Section 10

“Bars Co” TCG Bars Limited

“Pubs Co” TCG Pubs Limited

“Taverns Co” TCG Taverns Limited

“Inns Co” TCG Inns Limited

“Management Co” TCG Management Services Limited

“Top Co” Tattershall Castle Group Limited

“IBRC” Irish Bank Resolution Corporation Limited

“IA86” The Insolvency Act 1986

“IR86” The Insolvency Rules 1986

“Prescribed Part” Funds ring-fenced for unsecured creditors in accordance with

Section 176A IA86 which would otherwise have been payable to

the holder of a qualifying floating charge

“PwC” PricewaterhouseCoopers LLP

“Sch.B1 IA86” Schedule B1 to the Insolvency Act 1986

“Secured Lender” LSREF III Wight Limited

“SIP” Statement of Insolvency Practice

“Stonegate” or “the Purchaser” Stonegate Pub Group Limited

“the transaction” The sale of the majority of the Companies’ business and assets to

Stonegate on 29 September 2015


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2. Purpose of this report

We previously wrote to all known creditors to give notice that we were appointed joint administrators of the

Companies on 5 October 2015.

In this report we provide a brief history of the Companies, explain why they were put into administration

and set out our proposals for achieving the purpose of the administrations. We also include details of the

Companies’ assets and liabilities, and give an initial indication on the likely outcome for each class of

creditor.

The purpose of an administration is to achieve one of the following objectives:-

(a) Rescuing the company as a going concern, or if that is not possible or if (b) would achieve a better

result for the creditors than (a);

(b) Achieving a better result for the company’s creditors as a whole than would be likely if the company

were wound up (without first being in administration), or finally, if that is not possible;

(c) Realising the company’s assets to pay a dividend to secured or preferential creditors.

In each case, we are pursuing objective (b) as it was not reasonably practical to rescue any of the Companies

as going concerns.

Our role as administrators is to manage the Companies until our proposals for achieving the purpose of the

administrations have been agreed and implemented as far as possible. The administrations will then end in

the manner described later in this report.

This document and its appendices form our statement of proposals for achieving the purpose of each

administration.

As detailed in Section 3, we have formed the view that the Companies have insufficient property to enable a

distribution to be made to unsecured creditors other than potentially by virtue of the Prescribed Part as

provided for by Section 176A IA86. Accordingly, by virtue of Paragraph 52(1) Sch.B1 IA86, a meeting of

creditors is not being convened at this time in respect of any of the Companies.

In accordance with Rule 2.33(5) IR86, our proposals will be deemed to have been approved by creditors

unless a meeting of creditors is requisitioned in the prescribed manner by at least 10% in value of creditors

within eight business days of the date on which these proposals are circulated. We will write to creditors

again after the expiry of this period to confirm the deemed approval of the proposals, or alternatively

confirm that a meeting is to be held.

If you have any questions in connection with this report or what is being proposed, please contact my

colleague Katharyn Froggett on 0113 289 4155.


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Yours faithfully

For and on behalf of the Companies

………..…………………………………………

David Chubb

Joint Administrator David Chubb and Michael Jervis have been appointed as joint administrators of TCG Bars Limited, TCG Pubs Limited, TCG Inns Limited, TCG Taverns Limited and TCG Management Services Limited to manage their affairs, business and property as their agents and without personal liability. The joint administrators are licensed in the United Kingdom to act as insolvency practitioners by the Institute of Chartered Accountants in England and Wales. The joint administrators are Data Controllers of personal data as defined by the Data Protection Act 1998. PricewaterhouseCoopers LLP will act as Data Processor on their instructions. Personal data will be kept secure and processed only for matters relating to the administrations. The joint administrators are bound by the Insolvency Code of Ethics which can be found at: https://www.gov.uk/government/publications/insolvency-practitioner-code-of-ethics

https://www.gov.uk/government/publications/insolvency-practitioner-code-of-ethics

TCG Bars Limited, TCG Bars Limited, TCG Inns Limited, TCG Taverns Limited, TCG Management Services Limited – all in administration Page 5

3. Summary of the possible outcome for creditors

The table below provides a summary of the possible outcome for the various classes of creditors, based on current information. More information is provided later

in this report. Please note this guidance on dividends is only an indication and should not be used as the main basis of any bad debt provision.

LSREF III Wight Limited

Estimated total debt (£):

Estimated % recovery:

Forecast timing:

Tattershall Castle Group Limited

Estimated total debt:

Estimated % recovery:

Forecast timing:

Amount owed to preferential creditors (£) 7,000

Estimated % recovery for preferential creditors: Nil

Forecast timing: N/A

Amount owed to unsecured creditors (£) (Note 2): 10,708,966 9,149,214 5,242,738 6,316,924 7,104,026

Estimated % recovery for unsecured creditors: Nil Nil Approx. 1% Approx. 1% Approx. 1%

Forecast timing: N/A N/A 12 months + 12 months + 12 months +

Note 1 Preferential claims are currently expected to arise in TCG Bars Limited only for the reasons outlined in Section 4.6

Note 2 These figures are provided in the directors' statement of affairs but may increase or decrease for the reasons outlined in Section 4.9

(creditors who are neither secured or preferential)

See Note 1

Estimated recovery for secured creditors

(creditors with security in respect of their debt, in accordance with Section 248 IA86)

Estimated recovery for preferential creditors

(former employees for unpaid wages and holiday pay and unpaid pensions contributions in certain circumstances)

Estimated recovery for unsecured creditors

£104.1 million across the wider Group subject to (see Group structure at Section 10)

1%

12 months +

12 months +

100%

£99.9 million across the wider Group (see Group structure at Section 10)

TCG Bars Limited TCG Pubs Limited TCG Inns LimitedTCG Taverns

Limited

TCG Management

Services Limited


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4. Background, strategy and progress

On 5 October 2015, we wrote to creditors to give notice of our appointments and details of an immediate

sale of the majority of the Companies’ business and assets (in accordance with SIP16). This letter is still

available on our website at www.pwc.co.uk/tcg, the content of which has been repeated here where

necessary for the purposes of this report. Also in accordance with SIP 16 – Pre packaged sales in

Administrations, the appendix to our letter of 5 October 2015 is enclosed at Section 12.

4.1 Background

The Companies are trading entities within the Tattershall Castle Group Limited group of companies which

was formed in 2005. The Group comprises 14 statutory entities (7 registered in Guernsey and 7 in the UK)

and 2 Unit Trusts (Guernsey) and operated 63 public houses and bars throughout England, Wales and

Scotland.

The Companies comprised the operating entities within the Group and collectively employed in excess of

1,200 employees.

A summary of the business of each of the Companies is provided below and a group structure is available at

Section 10.

TCG Bars Limited Operator of freehold pubs owned by the Group and holder of 13

leasehold pubs with freeholders external to the Group;

Owns fixtures and fittings within these pubs;

Employed 602 staff at the date of our appointment.

TCG Pubs Limited Operator of freehold pubs owned by the Group and holder of 8 leasehold

pubs with freeholders external to the Group;

Owns fixtures and fittings within these pubs;


TCG Inns Limited Operator of freehold pubs owned by the Group;

Owns fixtures and fittings for these pubs;


TCG Taverns Limited Operator of freehold pubs owned by the Group;

Owns fixtures and fittings for these pubs;

Employed of 79 staff at the date of our appointment.

TCG Management Services Limited Provided management services for the Group companies;

Owns fixtures and fittings at head office;


4.2 The circumstances giving rise to our appointments

On 16 June 2015, the directors of Top Co received an unsolicited offer from Stonegate for certain assets of

the Group. Stonegate’s offer exceeded the current valuation of the assets obtained by the agents.

The Secured Lender requested the directors give detailed consideration to the offer. The directors of Top Co

and Stonegate entered into a period of negotiation with the intention of concluding a sale. However, the

Group has a complicated structure, such that the Guernsey-based companies own the freehold pubs, while

the Companies (which are UK-registered) own the fixtures and fittings within these freehold pubs and also

own leasehold pubs operated by the Group.

http://www.pwc.co.uk/tcg


Page 7

Following around 3 months of negotiation, a deal had still not been agreed and the Secured Lender believed

that there was a risk that a sale might not be achieved. At this point, PwC was engaged to advise the Secured

Lender whether there was a structure that might enable the sale transaction to take place.

Through PwC’s work, it became clear that:

The level of debt within the Group and the cross guarantees in place with the Companies meant

that the proposed sale would not enable repayment of all the indebtedness of the Companies;

In the event of an insolvency, the only prospect of a distribution to unsecured creditors in any of

the Companies was through the Prescribed Part. This was because the level of secured debt, cross

guaranteed by the Companies, from the primary and second ranking charge holders, was much

higher than the value of the Group’s assets; and

A sale could be achieved in a short time frame using an administration process.

Given that the Secured Lender had terminated a standstill agreement on the secured facility and also the

limited value for unsecured creditors in any insolvency scenario, the focus for the directors was to achieve

the best outcome for the Secured Lender.

The view of the Secured Lender was that its interests were best served through completing the proposed

transaction. No viable alternatives to the transaction were available to the directors within the timeframe of

the notice period provided by the termination of the standstill agreement.

On 28 September 2015, following the termination of the standstill agreement the Secured Lender made

demand. On 29 September 2015, the sums demanded not having been repaid, the Secured Lender

appointed David Chubb and Michael Jervis as joint administrators of the Companies.

4.3 Pre-administration costs

Prior to our appointment, we incurred time costs of £24,465 as part of placing the Companies into

administration. Specifically, we spent time in the following key areas:

Reviewing the offer from Stonegate for certain assets of the Group, and considering the steps and

structure which would be required to implement a sale;

Supporting the implementation of the proposed restructuring, including reviewing the timeline and

estimated outcome for creditors from using an insolvency process for the transaction;

Preparing for a proposed pre-packaged sale of certain assets of the group to Stonegate; and

Statutory and planning work in relation to the appointment including internal compliance and risk

procedures.

We needed to spend time on these matters so that the Companies could be placed into administration in an

orderly manner and to ensure that the value of assets was maximised, for the benefit of creditors. These

costs remain unpaid.

We also incurred legal costs of £5,000 (excluding VAT) and agent costs of £30,000 (excluding VAT) prior

to our appointment as part of placing the Companies into administration. These costs also remain unpaid.

A summary of these costs in provided in Section 8.


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4.4 Connected party transactions

In accordance with SIP13, we are required to disclose any known connected party transactions that

occurred in the period of two years preceding our appointment, in the period following our appointment or

any proposed transactions.

Connected party transactions principally relate to the acquisition of company assets by its directors and we

have a duty to investigate whether any disposal of assets was conducted at less than market value. We

confirm that there have been no connected party transactions in the period of two years preceding our

appointment and the period following our appointment, and no such transactions are envisaged.

4.5 Actions taken on and after our appointment

We notified creditors on 5 October 2015 that immediately following our appointment, the majority of the

business and assets of the Companies were sold to Stonegate, preserving approximately 1,000 jobs. We are

pleased to provide details of the transaction in Section 4.6.

Since the sale, we have completed the closure of two pubs and have overseen the continued trading of six

pubs that did not form a part of the sale to Stonegate. A breakdown of these pubs is provided in Section 4.6.

Funding for this limited trading has been provided through cash held in the Companies at the date of our

appointment.

We have continued to liaise with Stonegate in relation to post-sale matters, as well as complying with our

statutory and regulatory obligations.

4.6 Strategy, asset realisations and progress to date

Following our appointment and with the benefit of knowledge and information gathered prior to our

appointment, our key priorities were to:

Secure the Companies’ assets (principally cash balances, stock and fixtures and fittings);

Liaise with the Purchaser to deal with post-sale matters;

Stabilise the business so that the remaining pubs not party to the sale could continue to trade; and

Engage with parties who might be interested in acquiring the remaining assets of the Companies.

We provide an outline below of the actions taken and assets realised to date.

Sale of business

Immediately on our appointment, the majority of the Companies’ business and assets were acquired by

Stonegate.

The sale was an integral part of a wider transaction which involved the solvent purchase of 38 freehold

properties within the Group that were owned by the Guernsey registered property owning companies. The

sale of the freehold properties held the majority of the value of the total transaction.


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The assets sold and consideration received to date are summarised in the following table:

Assets Consideration received to 20 November

2015 across the Companies (£)

Fixtures and fittings 400,000

Stock 638,000

Cash floats 217,150

Total 1,255,150

We consider that the sale of the assets of the Companies was in the best interest of their creditors because:

The sale enabled over 1,000 jobs to be preserved and the outstanding liabilities of various trade

suppliers will be met under the terms of the sales agreement. It was an overriding condition of the

sale that the business acquired by Stonegate would not be disrupted by the transaction.

Accordingly, continuation of supplies to the pubs was essential and therefore it was a condition of

the sale that all key suppler accounts were settled. For logistical reasons, these payments are being

made by the Purchaser and funded through a reduction in the headline sale price.

The sale value would have had to exceed an EBITDA multiplier of 29 (which is not likely to be

possible) to repay all of the secured debt and start to deliver a return for unsecured creditors; and

All options apart from a pre-pack sale were potentially disruptive to the continuity of the business

and could have adversely impacted the underlying value of the Group.

Remaining pubs

Nine pubs were not part of the transaction with Stonegate. We have reviewed the position for all of these

pubs and we continue to trade six pubs whilst we progress the sales process and we have entered into a

management agreement with Stonegate to facilitate this. One pub was closed prior to our appointment, and

we are progressing a sale of this pub.

Unfortunately, we needed to close two pubs immediately on our appointment and 23 employees were made

redundant. The closure of these pubs was unavoidable due to their trading performance and minimal

potential sale value.


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A summary of the pubs not purchased by Stonegate is set out below:

Continuing to trade in

administration

Closed immediately on our

appointment

Closed prior to our

appointment

Corn Exchange, Preston Carpe Diem, Leeds Philharmonic, Cardiff

Henry’s Café, India Quay Via, Canary Wharf

Royal Victoria & Bull Hotel, Dartford

Richmond Arms, Richmond

Sugar Loaf, Dunstable

Three Tuns, Windsor

We will provide creditors with an update of the sales process for these pubs in due course.

Cash at bank

On appointment, we took control of the Companies’ bank accounts and collected a total of £2,301,604.

Employees

The Companies employed a total of 1,278 staff at the date of our appointment. The following summary sets

out the position with employees in each of the companies at the date of our appointment.

4.7 Objective of the administrations

Within these administrations it is not considered possible to rescue any of the Companies as going

concerns. Therefore, for each of the Companies, our strategy aims to ‘achieve a better result for the

company’s creditors as a whole than would be likely if the company were wound up (without first being in

administration)’. This is objective (b) as referred to earlier and we anticipate that this objective will be

achieved in each administration for the following reasons;

A going concern sale has already been achieved for the majority of the pubs.

The majority of the employees have transferred to the Purchaser and various suppliers will be paid

their outstanding liabilities as part of the transaction.

We are continuing to try to sell the remaining seven pubs, with the intention of maximising realisations

for creditors.

We believe that if the Companies had been put into liquidation, this would have resulted in the breakup

of the Group, resulting in an uncoordinated, fragmented and more costly insolvency process and a

worse outcome for creditors.

Company Transferred to

Stonegate on

appointment

Redundancies

(closed pubs)

Retained staff

(trading pubs)

Opening position

TCG Bars Limited 536 23 43 602

TCG Pubs Limited 385 - 48 433

TCG Inns Limited 1 29 - - 1 29

TCG Tav erns Limited 7 9 - - 7 9

TCG Management Serv ices Limited 35 - - 35

1,164 23 91 1,278


Page 11

Therefore, we consider that the sale represents the best outcome for creditors and will achieve the objective

of the administrations.

4.8 Receipts and payments accounts

An account of the receipts and payments in the administrations from the date of our appointment to 28

October 2015 is included in Section 9.

Whilst Bars Co and Pubs Co have continued to trade in administration, we have not provided a trading

statement for these companies in this report for the reasons outlined below.

As explained in Section 4.6, Stonegate is responsible for managing the six trading pubs and are required to

provide us with monthly profit and loss accounts. The first of these monthly accounts is due towards the

end of November 2015.

Whilst we have control and visibility over the performance of the trading pubs it is not yet possible to

provide a meaningful disclosure of trading receipts and payments. We will therefore update creditors on the

trading position in our next report.

In addition, funds (mainly trading receipts) have continued to be received into the Companies’ pre-

appointment bank accounts since the date of our appointment. Some of these funds will relate to

transactions in the pubs that have been sold to Stonegate, and so will be owed to Stonegate.

We are in the process of reviewing each transaction and apportioning the funds appropriately. The volume

of receipts and number of different income streams has meant that this process has been both complex and

time-consuming and is not yet complete.

We will provide a full disclosure of the trading position to creditors in our next report. 4.9 Outcome for creditors Secured creditors

Funding to the Group comprised £99.9m of secured lending, guaranteed by each of the Companies, and

£104.1m of subordinated unsecured loan notes, both of which are held by the Secured Lender. The secured

loan and unsecured loan notes were due for repayment on 31 October 2014.

The secured facility was acquired by the Secured Lender from IBRC on 16 May 2014 and lending was

secured by fixed and floating charges from each of the Group entities, excluding Top Co. These included

fixed charges registered on each title (with the exception of three titles which were covered by equitable

fixed charges).

The unsecured loan notes were issued by Top Co and were acquired by the Secured Lender on 3 December

2014 from Alchemy Investment Plan.

Subordinate to the secured debt, Top Co holds a second charge in respect of its lending to various Group

entities and the total balance was cross-guaranteed by all Group entities.

The overall outcome for the Secured Lender in respect of its secured debt will depend on both the

realisations from the administrations and the realisations from freehold property sales taking place outside


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of the administration but which are part of the wider transaction. The Secured Lender will suffer a shortfall

in respect of its unsecured loan notes.

Amounts owed to Top Co under its second ranking charge at the date of our appointment totalled £104.1m.

Top Co will suffer a significant shortfall on its secured lending.

Preferential creditors

Preferential claims principally relate to claims for arrears of wages (subject to statutory limits) and unpaid

holiday pay.

At this stage, we expect that a small number of preferential claims will arise in relation to Bars Co, due to

the employee redundancies at the two closed pubs. We estimate that these claims are likely to be around

£7,000. At this stage, we anticipate that there will be insufficient realisations in Bars Co to pay a

distribution to preferential creditors.

Based on current information, we do not expect any preferential claims to arise in Pubs Co, Taverns Co,

Inns Co or Management Co.

Unsecured creditors

As explained in earlier correspondence, the balance owed to certain trade creditors at the date of our

appointment will be paid by the Purchaser under the normal terms of trade. If you do not ultimately get all

of your outstanding invoices paid then the amount owed will rank as an unsecured claim against the

relevant company.

Amounts become available for unsecured creditors if there are sufficient funds remaining after secured and

preferential creditors have been paid in full and the expenses of the administration have been discharged.

However in certain circumstances, insolvency legislation requires a fund to be set aside for unsecured

creditors that would otherwise be paid to the secured creditor (under its floating charge).

This ring-fenced ‘Prescribed Part’ fund is paid out of the company’s ‘net property’. Net property is floating

charge realisations after costs, and after paying - or setting aside enough to pay - preferential creditors in

full. But it only has to be made available where the floating charge was created on or after 15 September

2003. The amount of the Prescribed Part is:

50% of net property up to £10,000; plus

20% of net property above £10,000; but

Subject to a maximum of £600,000.

The Prescribed Part applies in each of the Companies as there is a floating charge created after

15 September 2003. We outline below what we believe the net property, estimated prescribed part and

level of unsecured claims may be for each of the Companies.

Please note that any dividends will only by virtue of a Prescribed Part fund. This is due to the considerable

amounts owed to the secured creditors of the Companies and the expectation that secured creditors will

suffer a significant shortfall on their lending.

The estimate of unsecured claims are as provided in the directors’ statement of affairs, and do not at this

stage take account of the costs associated with agreeing claims and distributing the Prescribed Part fund. As


Page 13

explained in Section 6, these figures also do not take account of any amounts paid to trade creditors by the

Purchaser. The estimates are therefore subject to change and should be treated with an appropriate degree

of caution.

Company

Net Property Estimated

Prescribed Part

fund *

Estimate of

unsecured

claims **

TCG Bars Limited Nil Nil £10.7m

TCG Pubs Limited Nil Nil £9.1m

TCG Inns Limited £267k £56k £5.2m

TCG Taverns Limited £216k £46k £6.3m

TCG Management Services Limited £1.444m £292k £7.1m

* Based on the Administrators estimated prescribed part and will be ring-fenced by the administrator

**Based on the directors’ statement of affairs

Note: Bars Co and Pubs Co currently have an unquantified but potentially large Capital Gains Tax liability which will fall as a

floating charge expense ranking above the calculation of the net property in accordance with Rule 2.67 IR86.

4.10 Ending the administration

The administrations are separate insolvency processes and therefore may end at different times and in

different ways (depending on the circumstances in each case). Each administration will be brought to an

end once its purpose has been achieved, our work has been completed and statutory obligations fulfilled.

An administration comes to an automatic end after one year unless the Court agrees to extend it for a

specific period. Alternatively, the relevant class of creditors can consent to a twelve month extension to the

Administrators’ term in office. On these cases, we will continue to monitor the progress of our

appointments and will apply for extensions as appropriate.


Page 14

5. Our proposals for achieving the purpose of administration

Our proposals for achieving the purpose of each administration are as follows:

i) We will continue to manage and finance the company’s business, affairs and property from trading

revenues (where relevant) and asset realisations as we consider expedient with a view to achieving

a better result for the company’s creditors as a whole than would be likely if the company were

wound up (without first being in Administration).

ii) We may investigate and, if appropriate, pursue any claims that the company may have under the

Companies Act 1985 or IA86 or otherwise. In addition, we shall do all such other things and

generally exercise all our powers as Administrators as we in our discretion consider desirable in

order to achieve the purpose of the Administration or to protect and preserve the assets of the

company or to maximise realisations or for any other purpose incidental to these proposals.

iii) If we believe that funds will become available for unsecured creditors over and above the

Prescribed Part, we may at our discretion establish in principle the claims of unsecured creditors

for adjudication by a subsequent liquidator (or ourselves as administrator) and that the costs of so

doing be met as a cost of the Administration as part of the Administrators’ remuneration (where

the Administrators believe there will be sufficient funds for a distribution to unsecured creditors

other than by virtue of the Prescribed Part) or out of the Prescribed Part as costs associated with

the Prescribed Part (where the Administrators believe that funds will become available to the

unsecured creditors by virtue of the Prescribed Part but not otherwise).

iv) If we believe that funds will become available for unsecured creditors, we may make an application

to court for permission to make distributions to unsecured creditors under Paragraph 65(3) Sch.B1

IA86.

v) We may use any or a combination of “exit route” strategies in order to bring the Administration to

an end, but in this particular instance we are likely to wish to pursue the following options as being

the most cost effective and practical in the present circumstances: -

a) If there are sufficient funds to make a distribution to unsecured creditors by virtue of the

Prescribed Part or if it transpires that there are insufficient funds to make a distribution to

unsecured creditors by virtue of the Prescribed Part, once all of the assets have been

realised, the Prescribed Part distribution made (if applicable) and we have concluded all

work within the Administration, we will file a notice under Paragraph 84(1) Sch.B1 IA86

with the Registrar of Companies, following registration of which the company will be

dissolved three months later.

b) Once asset disposals are complete and, if there are sufficient funds to pay a distribution to

unsecured creditors over and above the Prescribed Part, we will place the company into

creditors’ voluntary liquidation. In these circumstances, it is proposed that David Christian

Chubb and Michael John Andrew Jervis be appointed as Joint Liquidators and any act

required or authorised to be done by the Joint Liquidators may be done by either any or

both of them. In accordance with Paragraph 83(7) Sch.B1 IA86 and Rule 2.117A(2)(b)

IR86, creditors may nominate alternative liquidators, provided that the nomination is

made before the proposals are approved.


Page 15

c) Once asset disposals are complete, we will apply to the Court to allow the Administrators to

distribute surplus funds, if any, if there are sufficient funds to pay a distribution to

unsecured creditors over and above the Prescribed Part. If such permission is given, the

Administration will be brought to an end by notice to the Registrar of Companies under

Paragraph 84 Sch.B1 IA86, following registration of which the company will be dissolved

three months later. If permission is not granted the Administrators will place the company

into creditors’ voluntary liquidation in accordance with paragraph (b) above or otherwise

act in accordance with any order of the court.

vi) We will be discharged from liability pursuant to Paragraph 98(1) Sch.B1 IA86 in respect of any

action of ours as Administrators at a time resolved by the secured creditors, or if a distribution has

been or may be made to the preferential creditors, at a time resolved by the secured and

preferential creditors or in any case at a time determined by the court

vii) It is proposed that the unpaid pre-Administration costs detailed at Section 8 are approved for

payment as expenses of the Administration. In the circumstances of this case it will be for the

secured and preferential creditors to approve the payment of the unpaid pre-Administration costs

as expenses of the Administrations.

viii) It will be for the creditors’ committee to fix the basis and level of the Administrators’ fees and

Category 2 disbursements but if no committee is appointed, as the Administrators have stated that

they believe that the company has insufficient property to enable a distribution to be made to non-

preferential unsecured creditors other than by virtue of Section 176A IA86, it will be for the secured

creditor and preferential creditors to determine these instead. In any event, the basis of the

Administrators’ remuneration and Category 2 disbursements are to be fixed no later than 18

months after the date of the Administrators’ appointment.


Page 16

6. Statement of affairs

We were given a statement of affairs of the Companies on 14 October 2015.

Our comments on the statement of affairs are as follows:-

We have not audited the information.

As is normal in a statement of affairs, there is no provision for the costs of realising the Companies’

assets or the costs of the administration.

There is no estimate of the Prescribed Part provided on the statement of affairs. We explain in Section

4.9 whether we believe the Prescribed Part will apply and what this will mean for the outcome for

unsecured creditors.

The figures for unsecured creditors do not take account of any amounts paid to trade creditors by the

Purchaser. Therefore, it is likely that some creditors listed may not remain creditors of the Companies.

The statement of affairs anticipates that there will be a significant shortfall for creditors in each

company.

We attach at Section 11 copies of the statement of affairs and as required by law, it includes details of the

names, addresses and debts of creditors (including details of any security held). The statements of affairs

are contained in separate documents when viewed on our website.

We recognise creditors may want to contact each other to discuss certain aspects of the case. If you need

more information to be able to do this, please get in touch with my colleague Katharyn Froggett on 0113

289 4155. Alternatively, you may email your request to [email protected] with the name of

the company in the title and including your name and your company name (if applicable) in the email.

mailto:[email protected]


7. Statutory and other information relating to the administrations

Full name: TCG Bars Limited TCG Pubs Limited TCG Inns Limited TCG Taverns

Limited

TCG Management

Services Limited

Trading name:

Court details for the Administration: 6431 of 201 5 6430 of 201 5 6433 of 201 5 6432 of 201 5 6434 of 201 5

Registered number: 06663934 0666391 0 06663938 06663925 06663931

Registered address:

Company directors: Mark Fontaine

Nigel Wright

Benjamin Lev ick

Mark Fontaine

Nigel Wright

Mark Fontaine

Nigel Wright

Mark Fontaine

Nigel Wright

Mark Fontaine

Nigel Wright

Nicolas Francis

Dav id Rimmer

Jonathan Walker

Company secretary:

Shareholdings held by the directors and secretary:

Date of the Administration appointment:

Administrators’ names and addresses:

Appointor’s / applicant’s name and address:

Objective being pursued by the Administrators:

Division of the Administrators’ responsibilities:

The European Regulation on Insolvency Proceedings

(Council Regulation(EC) No. 1346/2000 of 29 May

2000):

N/A

Regus House, Windmill Hill Business Park, Swindon, Wiltshire, SN5 6QR

LSREF III Wight Limited, First Floor, 25-28 Adelaide Road, Dublin 2, Ireland

In relation to Paragraph 1 00(2) Sch.B1 IA86, during the period for which the administration order is in force any

act required or authorised under any enactment to be done by either or all of the administrators may be done by

any one or more of the persons for the time being holding that office.

The European Regulation on Insolv ency Proceedings applies to these Administrations and the proceedings are main

proceedings.

N/A

Objectiv e (b) - achiev ing a better result for the company 's creditors as a whole than would be likely if the company

was wound up (without first being in administration).

29 September 201 5

Dav id Christian Chubb and Michael John Andrew Jerv is of PricewaterhouseCoopers LLP, 7 More London, Riv erside,

London, SE1 2RT

Andrew Green


8. Pre-administration costs

The following are costs incurred prior to the appointment of Administrators but with a view to the Companies entering Administration. It is proposed that the

unpaid costs will be paid as an expense of the Administration. Such payment is subject to approval under Rule 2.67 of the Insolvency Rules 1986 and not part of the

proposals subject to approval under paragraph 53 Sch.B1 IA86. A breakdown of such unpaid costs, split between fees incurred by the Administrators and expenses

incurred by the Administrators can be found below:

Breakdown of fees incurred by the Administrators prior to appointment

The work undertaken prior to our appointment included:

Reviewing the offer from Stonegate for certain assets of the Group, and considering the steps and structure which would be required to implement a sale;

Supporting the implementation of the proposed restructuring, including reviewing the timeline and estimated outcome for creditors of using an insolvency

process for the transaction;

Preparing for a proposed pre-packaged sale of certain assets of the group to Stonegate; and

Statutory and planning work in relation to the appointment including internal compliance and risk procedures.

All of the above fees are unpaid. There have been no fees which have already been paid associated with the administration.

Partner Director

Senior

Manager Manager

Senior

Associate Associate Support Total hours Time cost

Average

hourly rate

£ £

Strategy & Planning 13.00 - 14.00 13.00 3.20 4.40 - 47.60 24,465.00 513.97

Ba r s Co 2 .6 0 - 2 .8 0 2 .6 0 0.6 4 0.8 8 - 9 .5 2 4 ,8 9 3 .00 5 1 3 .9 7

Pu b Co 2 .6 0 - 2 .8 0 2 .6 0 0.6 4 0.8 8 - 9 .5 2 4 ,8 9 3 .00 5 1 3 .9 7

Ta v er n s Co 2 .6 0 - 2 .8 0 2 .6 0 0.6 4 0.8 8 - 9 .5 2 4 ,8 9 3 .00 5 1 3 .9 7

In n s Co 2 .6 0 - 2 .8 0 2 .6 0 0.6 4 0.8 8 - 9 .5 2 4 ,8 9 3 .00 5 1 3 .9 7

Ma n a g em en t Co 2 .6 0 - 2 .8 0 2 .6 0 0.6 4 0.8 8 - 9 .5 2 4 ,8 9 3 .00 5 1 3 .9 7

13.00 - 14.00 13.00 3.20 4.40 - 47.60 24,465.00 513.97

Aspect of assignment

Total


Breakdown of expenses incurred by the Administrators prior to appointment

Unpaid amount (£)

Paid amount (£)

Agents’ fees (Edward Symmons) (*):

Bars Co 11,320.75 -

Pubs Co 11,886.80 -

Taverns Co 4,528.30 -

Inns Co 2,264.15 -

Management Co - -

30,000.00 -

Legal fees (BLP) (**):

Bars Co 1,000.00 -

Pubs Co 1,000.00 -

Taverns Co 1,000.00 -

Inns Co 1,000.00 -

Management Co 1,000.00 -

5,000.00 -

Fees charged by other persons qualified to act as an insolvency practitioner - -

Expenses charged by other persons qualified to act as an insolvency practitioner - -

Total 35,000.00 -

Note: All of the above figures are exclusive of VAT

(*) Agents’ services consisted in advising on what element of the pub sale consideration should be allocated to moveable fixtures and fittings. It was important to ensure that the apportionment of the sale proceeds between fixed and floating charge realisations was appropriate. The work was undertaken through a review of the fixed asset register of the Companies, visiting a sample of pubs and discussions with management. (**) Legal fees incurred in placing the Companies into administration.


Page 20

9. Receipts and payments accounts

TCG Bars Limited Receipts and payments account for the period 29 September 2015 to 28 October 2015

Directors'

statement of

affairs

29 September

2015 to 28

October 2015

(£) (£)

Fixed charge

Receipts

1 3,600,000 Leasehold property -

13,600,000 Total receipts -

Payments

(1 3 ,600,000) Distribution to the Secured Lender -

- Total payments -

Floating charge

Receipts

682,7 96 Cash at bank 1 64,427 .62

- Cash floats 86,250.00

404,958 Debtors -

240,000 Fixtures and fittings 1 83,333.34

324,000 Stock 336,000.00

682,796 Total receipts 770,010.96

Payments

Statutory adv ertising (26.80)

Sundry appointm ent related costs (35.00)

Total payments (61 .80)

Net floating charge realisations 769,949.16

VAT control account -

Balance held in interest bearing current account 769,949.16

Represented by: (£)

Held in Barclay s 7 69,949.1 6

Total 769,949.16


Page 21

TCG Pubs Limited Receipts and payments account for the period 29 September 2015 to 28 October 2015

Directors'

statement of

affairs

29 September

2015 to 28

October 2015

(£) (£)

Fixed charge

Receipts

5,330,000 Leasehold property -

5,330,000 Total receipts -

Payments

(5,330,000) Distribution to the Secured Lender -

- Total payments -

Floating charge

Receipts

404,1 41 Cash at bank 1 39,959.28


204,935 Debtors -

250,000 Fixtures and fittings 1 56,41 0.30

222,559 Stock 202,000.00

1,081,635 Total receipts 578,819.58

Payments


Sundry appointm ent related costs (35.00)

Total payments (61 .80)


VAT control account (26.80)



Held in Barclay s 57 8,7 30.98

Total 578,730.98


Page 22

TCG Inns Limited Receipts and payments account for the period 29 September 2015 to 28 October 2015

Directors'

statement of

affairs

29 September

2015 to 28

October 2015

(£) (£)

Floating charge

Receipts

80,7 22 Cash at bank 62,635.25


20,000 Fixtures and fittings 1 5,384.60

1 8,7 1 1 Stock 22,000.00

80,722 Total receipts 133,319.85

Payments


Total payments (26.80)





Held in Barclay s 1 33,293.05

Total 133,293.05


Page 23

TCG Taverns Limited Receipts and payments account for the period 29 September 2015 to 28 October 2015

Directors'

statement of

affairs

29 September

2015 to 28

October 2015

(£) (£)

Floating charge

Receipts

329,698 Cash at bank 201 ,291 .47

- Cash floats 1 7 ,1 50.00

7 80 Debtors -

80,000 Fixtures and fittings 44,87 1 .7 6

- Interest receiv ed -

94,339 Stock 7 8,000.00

504,817 Total receipts 341,313.23

Payments


Total payments (26.80)





Held in Barclay s 341 ,286.43

Total 341,286.43


Page 24

TCG Management Services Limited Receipts and payments account for the period 29 September 2015 to 28 October 2015

Directors'

statement of

affairs

29 September 2015

to 28 October 2015

(£) (£)

Floating charge

Receipts

1,734,236 Cash at bank 1,733,589.49

- Fixtures and fittings -

- Interest received 11.23

- Stock -

- Third party funds 3,730.33

1,734,236 Total receipts 1,737,331.05

Payments

Bank charges (30.00)

Funding advanced on behalf of secured creditor (note 1) (1,600,000.00)

Statutory advertising (26.80)

Total payments (1,600,056.80)





Held in Barclays 137,274.25

Total 137,274.25

Note 1

Funding advanced on behalf of secured creditor in respect of

payments to certain trade creditors under the terms of the

transaction and sales agreement.


10. Group structure


Page 26

11. Copy of the statements of affairs

This section contains a copy of the directors’ statement of affairs for each of the Companies. When viewed on our website, the statements are contained in separate documents.


Page 27

12. Copy of SIP16 – Pre-packaged sales in Administration

This section contains a copy of the appendix to our letter of 5 October 2015 which provides details of the immediate sale of the majority of the Companies’ business and assets (in accordance with SIP 16). When viewed on our website, the appendix is contained in a separate document.

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