There will be no money to pay creditors owed almost £500,000 after the collapse of Devon car and bike hire company Co-Cars. The Exeter-headquartered company, which ran e-bike and car-sharing schemes in Exeter, Plymouth, Falmouth and Truro for 2,500 customers, ceased trading in July 2023 and went into administration.
New documents filed at Companies House reveal that Co-Cars Ltd is now on the verge of being wound up, leaving behind significant debts. Despite administrators managing to raise thousands from the sale of cars and motorbikes, it will not be enough to cover the large sums owed to unsecured creditors.
A progress report from the administrators reveals claims totalling £494,536 from 20 unsecured trade creditors. In addition, they have dealt with correspondence from a “significant number” of car and bicycle users, resulting in more than 22,000 emails being sent.
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Administrators Milsted Langdon LLP in Taunton said there will be no money to pay unprotected creditors. In his report, Richard Warwick, joint administrator, said: “We have received claims totalling £494,536 from 20 creditors. In addition, we have received and dealt with correspondence from a significant number of car membership and bicycle use creditors after the society went into administration, with over 22,000 emails sent in relation to these creditors.”
“No expenses have been awarded by the Association and accordingly there is no requirement to create a fund from the Association’s net floating charges for unprotected creditors. No distribution will be made to the Association’s non-preferential unprotected creditors.”
Co-Cars Ltd was incorporated as a mutual company and registered as such with the Financial Conduct Authority. It traded from The Generator Hub, on The Quay in Exeter, and from a unit on the 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 sold at auction by the administrators to raise £36,333. It also owned a range of IT equipment and around 240 fleet bikes and a number of cargo bikes, along with a large quantity of tools, spare bike parts and spare parts relating to bike charging points.
Operators sold the fleet bikes, associated spare parts and uninstalled charging station components for £26,784. The IT equipment and cargo bikes were auctioned in December for £6,800. Operators have also been in contact with 46 bike charging points and more than 20 third parties over agreements and how to resolve them.
The new documents show that a further £23,445 has been raised in the past six months by selling more bikes and equipment, and £6,338 has been received from 13 debtors. The remaining book debts, worth £20,695, are being pursued, but it is unclear whether any further amounts will be collected.
Much of the money raised will go to the administrators and the costs of administration. However, a dividend will be paid to unsecured ordinary preferential creditors when the company is wound up. A claim for £919 has been received from the Department for Business, Energy & Industrial Strategy, a preferential creditor.
Co-Cars, founded in 2005, went bust last year after rising fuel prices and vandalism to vehicles made it “impossible” to continue trading. Bosses also cited changing travel habits post-Covid, the cost of living and a fall in demand for business travel. An attempt to raise new investment failed in 2023, meaning Co-Cars had no option but to cease trading.
During its time in business, Co-Cars received large amounts of public funding, including £300,000 from Devon County Council for its e-bike programme. Over 300 investors also helped the company raise £600,000 from a community share offering in 2020.
In his new report, Mr Warwick said that at the time of the last progress report the administrators had expected to leave the administration by winding up the company. But he said: “We have now concluded that in order to finalise realisations, resolve outstanding matters and pay a distribution to the unsecured ordinary preferential creditors, it is more appropriate to proceed with Creditors’ Voluntary Liquidation, as permitted in our approved proposals.”