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DELAYED DEPARTURE FOR MCE

The woes of bankrupt specialist motorcycle insurance broker MCE — once a self-styled candidate for largest bike insurer in the market — continue to grow.

After MCE went bust in July last year, insolvency practitioner Crowe UK was parachuted in as administrator by the Financial Conduct Authority. Crowe’s first report on MCE affairs appeared in September 2023. This projected assets of £2.5m against liabilities to preferential creditors of £1.6m. The latter were split between some 77 unremunerated and now redundant MCE staff members, and HMRC. There was also an estimated £32.3m in unsecured claims, leaving an absence of £30.6m after preferential creditors had been paid in full.

Since then, Crowe has received a further £155.7m in unsecured claims from trade and expense creditors, mushrooming upwards from the original £32.3m estimate. And adding to MCE’s misery with more HMRC vengeance, in January this year the taxman filed a second preferential claim worth, around £600,000, and issued an additional £35.8m unsecured claim.

To make matters even more confusing as to the total of unsecured creditors, a company called Qubic Trustees intervened, in its role as trustee of the MC Edwards (Insurance Brokers) Limited Employee Trust, making a claim based on another version of the £32.3m figure. It also transpired that MCE had been involved with a now-insolvent Danish insurer Alpha, losing a court case in Denmark which could potentially result in legal claim judgement of somewhere between £1m and £20.1m.

The collapse of MCE’s Gibraltar-based underwriting arm MCE Insurance Company, which folded in November 2021, hasn’t gone away either. Now remonikered in administration as Green Realisation 123, it has approached Crowe with an outstanding claim on MCE of £51.5m.

Separately, when the offshore MCE Insurance Company failed, its MCE broker parent had appointed leading UK motor insurer Sabre Insurance Group as exclusive underwriter for motorcycle policies. Following MCE’s recent grief, administrator Crowe didn’t anticipate any claim from Sabre. But it’s got one anyway. On the back of the underwriting agreement termination, Sabre is now looking for £9.3m in compensation.

In the face of so many multifarious claims, some of which are probably conflicting, overlap or won’t bear close scrutiny, its unsurprising that Crowe now thinks it may be necessary to extend the administration period considerably, before initiating a liquidation process. The ghost of MCE Insurance’s gruesome BSB pitlane character “Big Ed” may live on for a while yet.

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