Founder of the company, Julie Ann Davey, is now applying to remove the joint administrators (who were appointed by HBOS) because she believes the bank forced her business into their ‘turnaround’ division, resulting in high costs and fees. This led to the firm having no other option but to go into administration. Davey now wants independent insolvency practitioners to oversee the process and investigate the reasons why Angel Group was transferred to the business support unit.
The lawyer representing Davey’s case, Stephen Davies QC, highlighted the pressure surrounding the banks after the financial crisis and the desperation to claw back money into the organisation.
KPMG administrators deny any wrongdoing on their part while Lloyds Banking Group state their Business Support Unit is not used for profit and focuses on turning around as many businesses as it can.
In 2013, Lawrence Tomlinson accused RBS of their support division, Global Restructuring Group (GRG), and its treatment of struggling business customers. Tomlinson believed RBS had deliberately put distressed companies into GRG, knowing full well the high fees and repayments would cripple them, leading to administration. It was alleged the bank could then buy the business and assets cheaply and sell them on for a profit.
It will be very interesting to see the outcome of the court case later this year.