Castle going for broke after failed purchases
A Hertfordshire-based insurance broker has gone bust after several acquisitions failed to deliver profits, the administrators of the firm have said.
FSA-regulated Castle Personal Insurance Brokers Limited, headquartered in Hemel Hempstead with a second office in Cwmbran, Wales, went into administration on 9 May with all 18 employers being made redundant, according to Tony Murphy, director of insolvency specialist Harrisons Business Recovery and Insolvency Limited.
In a statement, Mr Murphy explained that Castle turned over £1.2m in 2010, but a series of expensive acquisitions proved costly and failed to deliver the expected returns, which led to the collapse of the broker.
Mr Murphy and Paul Boyle, head of national practice for the Harrisons, have been appointed joint administrators of Castle Personal Insurance Brokers Limited.
The administrators have since sold the assets of the failed firm to Buckinghamshire-based broker and agent Taylor Francis Limited.
Mr Murphy said: “We will work closely with Taylor Francis to ensure the transfer of the assets runs smoothly. Customers should check their insurance policy.”
According to the FSA register, Castle Personal Insurance Brokers Limited was authorised and is now in administration.
Tim Taylor, director of Taylor Francis Insurance Brokers, said he bought the business from the administrators for £48,000 and 4000 clients have been affected. However, most of the policies are safe and under risk transfer.
He said: “A few policies have been messy, but no policies have come off cover or been cancelled and we are working with the FSA to make sure clients are protected.”
Mr Taylor claimed Castle had run into problems after director Stephen Bateman made “a few bad acquisitions” which resulted in trading losses.
He said: “I believe there were three acquisitions and income wasn’t covering costs, so it was a loss-making situation on half of the business.”