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Lloydspharmacy goes into liquidation with £293m owed to creditors

The employment claims of former Lloydspharmacy employees could be under threat now that the multiple has entered into liquidation with almost £300 million owed to creditors, it has been revealed.

Some 514 companies and people are owed a total of £293 million by the now-defunct Lloydspharmacy, documents filed by its liquidators in Companies House last week (January 22) have revealed.

Lloydspharmacy – now known on Companies House as Diamond DCO Two Limited - was the second largest multiple in the UK this time last year before the sale of all Lloydspharmacy high street branches was announced in November.

Read more: Lloydspharmacy confirms 'successful sale' of all community pharmacies

But of the £293m owing, just £8.2 million of assets can be realised for Lloydspharmacy’s “preferential creditors” and just £800,000 is available for “unsecured creditors”, the liquidators’ statement of affairs said.

Many people and companies are owed large sums of money, while hundreds of entries on the list are owed a nominal amount of £1 - for disclosure, C+D is one of these.

 

Who is owed money?

 

The single largest creditors to the Lloydspharmacy estate are its current and former owners: Diamond DCO One Ltd, which used to trade as Admenta UK, is owed £228m, Aurelius Crocodile, which was one of the many holding companies used to control Lloydspharmacy, is owed £50m, and AAH Pharmaceuticals, which remains part of the Hallo Healthcare group, is owed £1.5m.

Read more: ‘Historically significant’: All the reaction to Lloydspharmacy’s high street exit

But other companies are also owed very large amounts of more than £100,000, including:

  • Barrie Dear Sapphire Ltd - £480,356
  • Dears Stockbridge Ltd – £228,797
  • East Coast Healthcare Scotland Ltd - £321,544
  • Elton Properties Ltd - £116,928
  • Ettrick Health Ltd - £150,970
  • G J Maley Ltd - £1.4m
  • Jardines (U.K.) Ltd - £113,997
  • Jhoots Pharmacy Ltd - £322,144
  • L. Rowland & Company (Retail) Ltd - £6.2m
  • Makan Investments Ltd - £228,812
  • Microsoft Ltd - £269,626
  • Mutley Properties (Holdings) Limited - £125,535
  • Primary Health Investment Properties Ltd - £161,984
  • Savory & Moore (Jersey) Ltd - £495,041
  • Sign Specialists Ltd - £392,302

And there are many people and companies that are owed sums in the thousands or tens of thousands that might well find the liquidation ruinous.

 

Ex-employees left high and dry?

 

The Pharmacists’ Defence Association (PDA) said on Friday (January 26) that the news is a “bitter blow” for ex-employees with employment tribunal claims against the defunct high street chain who “will be concerned that they may not now secure justice for the loss of their enhanced redundancy entitlement”.

It stressed that the claims “can continue” because the company has only entered creditors’ voluntary liquidation (CVL) rather than administration, but that tribunal claims nonetheless “face some challenges ahead”.

“Even if these claims proceed to a final substantive hearing and a tribunal upholds them, there is a very real risk the company will have no money to pay any compensation awarded,” it said.

Read more: UPDATED: PDA begins legal process in ex-Lloydspharmacy staff employment row

And it added that the company has been “asked to confirm if there is business indemnity insurance in place, which would extend to paying out compensation”.

In July last year, the union announced that “almost 100” former Lloydspharmacy workers in Sainsbury’s stores were taking the multiple to court in an effort to access enhanced redundancy benefits.

And in September, the PDA launched a legal process on behalf of pharmacists formerly employed by Lloydspharmacy after some of its members reported “changes to working practices” following the sales of pharmacies in the Lloydspharmacy estate in which they work.

Read more: Ex-Sainsbury’s Lloydspharmacy workers head to court over redundancy benefits

The PDA first announced that it was taking “specialist legal advice” on behalf of its members regarding the Lloydspharmacy liquidation on January 5.

According to the union, “a firm of licensed insolvency practitioners” informed some of the pharmacists with disputes against Lloydspharmacy “on or around Christmas Eve” that the company would be starting liquidation proceedings.

Read more: Lloydspharmacy quits the high street: It’s the end of the world as we know it

C+D has seen a letter issued by insolvency firm Turpin Barker Armstrong (TBA) on December 22 addressed to Lloydspharmacy’s creditors, informing recipients that two members of the firm had been appointed as liquidators of the multiple.

The PDA said that the insolvency would “prioritise” creditors such as HMRC, which may pursue the company based on its treatment of the tax status of locum pharmacists, over claims made by ex-employees.

However, the liquidators’ notice suggests that just £1 is to be realised for the “HMRC – Locum enquiry”.

 

Liquidators aware of ex-employee claims

 

Martin Armstrong, a senior partner at Turpin Barker Armstrong told C+D on January 10 that the insolvency firm was aware of claims brought by ex-employees against Lloydspharmacy, but that it could not comment on these claims due to their ongoing nature.

Mr Armstrong confirmed that the firm had been instructed by the board to assist in placing the company into creditors’ voluntary liquidation (CVL).

Read more: How two 23-year-old pharmacists snagged an ex-Lloydspharmacy branch

C+D approached Hallo Healthcare, which had owned Lloydspharmacy, about the liquidation process but a spokesperson said on January 8 that since it is no longer operating pharmacies as part of its group, the new proprietor is acting independently to manage its affairs.

A spokesperson for German private equity company Aurelius Group – Lloydspharmacy’s former parent company – also told C+D on January 15 that it does not comment on portfolio company affairs.

Read more: PDA secures over £500,000 for pharmacists “treated badly”

On November 25, Lloydspharmacy registered its sole director as Graham Wiseman and its direct connections to Aurelius were removed at around the same date, according to Companies House records. Its parent company Sapphire 111 Limited - which also owns Diamond DCO One Ltd - is also ultimately owned by Mr Wiseman. 

But C+D has not been able to contact Mr Wiseman and requests to companies with a known connection to him have not received a response.

In November, C+D exclusively revealed that all 1,054 high street and community pharmacies once owned by Lloydspharmacy had been sold and that the multiple was no longer operating community pharmacies.

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