Creditors of Mallory Park race circuit in Leicester will be asked to consider the administrator’s proposals to wind up the company at a meeting on Tuesday, 19 November. The company that ran the circuit, Mallory Park (Motorsport) Ltd, went into administration in September and, according to the administrator, will not survive.
The meeting, which will be held in London, has been arranged by administrators Kingston Smith & Partners – appointed on 30 September to sort out the financial affairs of the company.
At the meeting creditors will be asked to consider the administrator’s proposals, whether or not to establish a creditors’ committee, and to approve the administrator’s remuneration.
It is proposed the administrator continues to run the company until everything is sorted out. Based on current information, it is thought a dividend will be paid to unsecured creditors. Pre-appointment fees amounted to £14,504 (£4504 over estimate due to “prolonged negotiations with Titan (the landlord) and Hinckley & Bosworth Borough Council (HBBC) and time cost £55,275 (192.42 hours at £287 per hour).
Initially, administrator Ian Robert said talks with the council aimed at securing the future of the racing circuit had been “encouraging”.
He explained: “We are still very keen for Mallory Park to host racing again and are in discussions with a number of interested parties. There also now appears to be a way forward with the council and there have been useful talks with the landlord. These negotiations will continue; but this is a complex problem.” Later it was announced that there was no hope of saving the company.
Mallory Park has been operating as a motor racing circuit in the village of Kirkby Mallory, Leicestershire, since the 1950s, with the present company taking over operations shortly after its incorporation in 1985.
The administrator found that “due to pressure from local residents over noise, the company was subjected to a court order in 1985 that restricted the number of days per year that the company could run motorsport”.
The report goes on: “The company continued to trade under the 1985 notice and with the good will of the local residents for nearly the next 25 years.
“Over the years track usage had increased, breaking the terms of the notice, which culminated in HBBC taking action. The company had been operating motorsport and track activities outside of those allowed for some time. Local residents complained to HBBC which culminated in a court order and a £23,000 fine and reduced operations at the track back to the 1985 notice levels.
“Mallory Park had a 15-year lease with landlord Titan Property Ltd which expires in 2018. The rent, in accordance with the lease, had increased considerably over the last 10 years. As the court order in August 2013 effectively reduced the company’s turnover overnight by 40 per cent and its annual track days were reduced from 160 days to 92, current trading became unviable.
“The company negotiated with Titan to try to reduce the rent and asked HBBC to increase permitted race days, in spite of the court case.
“Whiles various offers were made by Titan, we were advised that no formal confirmation of any offer was ever made to the company and this made continued trading untenable.”
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