A report by administrators Smith and Williamson, filed on Companies House today (January 15), showed the takeover of the troubled provider was costlier and took longer than originally expected as the company looked to broker an agreement with the provider’s director, Kathryn Taylor, in regards to claims she made against GPC.
GPC Sipp entered administration in June 2019 due to problems with the investments in its Sipps, many of which were invested in the Harlequin property scheme.
Soon after, it was agreed that Hartley Pension would buy the 3,000-strong Sipp and Ssas books for £475,000, following a tender process which had involved 14 interested parties. The cost increased to £482,000 due to changes in the way Hartley wanted the policies to be transferred.
However, according to the administrators' document, demands around TUPE claims further protracted the process.
Hartley refused to complete the sale without Ms Taylor first completing a settlement of her TUPE claims which would otherwise have transferred to Hartley.
The purpose of TUPE is to protect employees if the business in which they are employed changes hands. Its effect is to move employees and any liabilities associated with them from the old employer to the new employer by law.
After negotiations between Hartley, Ms Taylor and the administrators it was agreed that Ms Taylor would be paid £18,500, £10,000 from Hartley and £8,500 from GPC, to protect both Hartley and GPC against the risk of any future claims being brought by Ms Taylor.
GPC and its administrators also agreed to waive Ms Taylor's £71,502 directors’ loan as well as pay £25,000 towards her legal fees.
In July it was revealed that Ms Taylor had £1m transferred to her directors loan account in the form of a "dividend", a mere seven months before the company entered administration.
According to the accounts statement filed on January 23, for the year to February 2018, Ms Taylor was "not aware of any material uncertainties affecting the company" and considered that the company "will have sufficient resources to continue trading for the foreseeable future".
In the beginning stages of GPC’s administration there were 36 firms who were interested in purchasing the Sipp and Ssas books.
This was whittled down to the two most attractive options, one of which being Hartley. The administrators did not disclose who the other firm was.
Hartley was successful as its deal did not include a clawback clause in respect of any TUPE claims, which was a condition of the other firm’s offer.