The Matches Fashion Group administration: proposals; waterfall; and outcome for employees

Restructuring & Insolvency Partner Simeon Gilchrist provides an insight into the Matches Fashion administration. Coming hard on the heels of the Body Shop administration, Simeon discusses the administrators’ proposals for achieving the purpose of the administration. This is a plain English review of what is otherwise an extremely complex area of law and economic reality. The collapse of the Matches Fashion Group leaves employees, suppliers, tax authorities and investors competing to recover what they can. Simeon looks at the order of distribution, known as “the waterfall”, the prescribed part of the sale proceeds that is ear-marked for unsecured creditors, and the way in which the investors have protected as much as possible the purchase monies with which Matches Fashion Group was acquired as recently as December 2023.

The prescribed part is a capped percentage of the net sale proceeds realised by the administrators. With the statutory cap set at £800,000 should the net realisations achieve £3,985,000, and an unsecured creditor pool presently estimated at £35M, the prescribed part dividend to the unsecured cohort sits somewhere around 2.2%. It is estimated by the administrators that the preferential and secondary preferential creditors are to be paid in full, but it remains to be seen what dividend will be achieved for the secured creditors after taking into account the expenses and remuneration in the administration process.

For further information on the topic of administration practice and procedure, please contact Simeon Gilchrist.

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