There will be no money to pay creditors owed almost £500,000 after the collapse of Devon car and bike rental company Co-Cars. The Exeter-based firm, which operated e-bike and car-sharing schemes in Exeter, Plymouth, Falmouth and Truro for 2,500 customers, has ceased operations in July 2023 and entered administration.
New documents filed at Companies House reveal that Co-Cars Ltd is now set for liquidation, leaving behind significant debts. Although the receivers have managed to raise thousands from the sale of cars and bikes, it will not be enough to cover the large sums owed to unsecured creditors.
The administrators’ progress report reveals claims totaling £494,536 from 20 unsecured trade creditors. In addition, they handled correspondence from a “significant number” of car and motorcycle users, resulting in more than 22,000 emails being sent.
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Taunton-based administrators Milsted Langdon LLP said there would be no cash to pay unsecured creditors. Richard Warwick, joint administrator, said in his report: “We have received claims totaling £494,536 from 20 creditors. In addition, we have received and dealt with correspondence from a significant number of creditors who are members of car and bicycle users after the company went into administration, with over 22,000 emails sent in relation to these creditors.”
“The company has not provided any fees and therefore there is no requirement to create a pool of the company’s net assets with a floating charge for unsecured creditors. No distribution will be paid to the company’s non-preferred unsecured creditors.”
Co-Cars Ltd was established as a mutual company and was registered as such by the Financial Conduct Authority. It traded from The Generator Hub, at The Quay in Exeter and from a unit at Marsh Barton Trading Estate, under the names Co-Cars, Co-Bikes and Co-Delivery.
It had 42 cars in its fleet, of which 35 were leased and eight were owned, which were auctioned by trustees to raise £36,333. It also owned a range of IT equipment and around 240 wagon wheels and a range of cargo bikes, along with a large number of tools, bike spares and bike charging station spare parts.
The administrators sold the wheels, associated spare parts and decommissioned charging station parts for £26,784. IT equipment and cargo bikes were sold at auction in December for £6,800. Administrators also dealt with 46 toll bikes and more than 20 third parties regarding agreements and their resolution.
New documents show a further £23,445 was raised over the past six months from the sale of extra bikes and equipment and £6,338 was received from 13 borrowers. The remaining book debts of £20,695 will be recovered, but it is unclear if any further sums will be recovered.
Much of the money raised will go towards payments to trustees and administration costs. But unsecured ordinary senior creditors will be paid a dividend when the company is wound up. A claim of £919 was received from the Department for Business, Energy and Industrial Strategy, the preferred creditor.
Founded in 2005, Co-Cars fell into administration last year, saying rising fuel prices and car vandalism made it “impossible” to continue. Bosses also cited changed travel habits post-Covid, the cost of living crisis and a fall in demand for business travel. An attempt to raise new investment in 2023 failed, meaning Co-Cars had no choice but to cease trading.
Co-Cars has received a large amount of public money during its time, including £300,000 from Devon County Council for an e-bike scheme. More than 300 investors also helped her raise £600,000 in a community share offering in 2020.
In his new report, Mr Warwick said that at the time of the last progress report, the administrators expected to wind up the administration by winding up the company. However, he said: “However, we have now come to the conclusion that in order to complete the realizations, resolve the remaining matters and pay the distribution to the unsecured ordinary senior creditors, it is more appropriate to proceed to a Creditors’ Voluntary Liquidation as permitted by our approved proposals.”