By Michael Northcott Monday, 17 December 2012

Taxpayers hit by £50m bill from Comet collapse

The electrical chain's main secured creditor OpCapita is expecting to get back 34p in the pound following Comet's collapse.

Comet has finally plunged to earth, with secured creditors Hailey Acquisitions Limited (HAL) about to receive 34% of their dues following the collapse of the chain. HAL, an investment vehicle set up for the purpose of acquiring Comet in February this year, will reap £49.7m from the administration process, but unsecured creditors to the chain will not get a single penny. 

Other victims of the collapse include HMRC, which is owed PAYE and VAT sums, and security firm G4S. It is thought that HMRC will suffer a loss of £26m because of the firm’s collapse, but the government is reportedly going to take a £50m hit in a combination of the unpaid tax and also redundancy costs it has agreed to pay to the 6,600 Comet staff. £1.5m will be paid to cover salary arrears and holiday pay.

Reports also say that other unsecured creditors ITV and Google are owed £1.2m and £602,000 respectively for advertising services, and customers holding Comet gift cards with a value of around £4.7m will also be hung out to dry.

MT can’t help observing that an American investment firm (OpCapita was the US private equity group which set up HAL for the purchase) has managed to net most of the money available whilst the British taxpayer and many others are left in the lurch. Henry Jackson, who founded OpCapita, was partly responsible for the deal to buy Comet from its original owners Kesa, last year for just £2.

So, why did it all go belly-up? Well, in late October, Comet lost its credit insurance, making it incredibly difficult to buy enough stock to meet demand over the Christmas period. The credit insurance issue is thought to have arisen because of some unsolicited acquisition interest, and the possibility of a change of hands put the wind up the insurers. 

For a while it did look as though there could be some time for a buyer to swoop in and there was even talk of re-launching Comet as an online-only brand. That came with the prospect of some jobs being saved, but alas, no white knight came to save the day and now the final stores are being closed on December 18th. 

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