Administrators sacked for selling botched UK unicorn
Administrators who sold a British tech startup to the company’s directors for a whopping 2 million pounds have been sacked by a court following charges that they had failed the sale. The case which ended this week has shed light on “pre-pack” administrations that authorize corporations to go broke, eliminate their debts and immediately be sold.
In 2016, an advertising software company called Ve interactive was valued at 1.5 billion pounds by administrators Williamson and Smith. It was sold by both these administrators for less than 1 percent of the valuation figure in April last year.
When this company collapsed last year, its creditors and shareholders sued to remove the administrators who had sold this company. This week, the court gave ruling in favor of the shareholders and ordered investigation of both the administrators.
Ve Interactive was a British unicorn valued at over a billion dollars. The startup developed software such as email alerts and website popup windows to increase sales. In last February, Tech City gave the title of most promising young British business to Ve Interactive. The startup has also won numerous awards. However, despite the high valuation and compliments, this startup was losing money and was extremely mishandled by its co-founder.
David Brown, the CEO and Co-founder of Ve interactive spent a hefty sum of money on office furniture and company cars. The money he spent on his personal use was given to him by company lenders and shareholders. Brown was forcefully removed by a syndicate of shareholders in March last year. He served the company for 8 long years and went bankrupt after he was removed from his position.
Tech entrepreneur, Mark Pearson and Scottish businessman Douglas Barrowman were leading the shareholders syndicate and entered Ve interactive in a pre-pack administration in April 2017.Ve
Interactive’s 2 million pound sale to Pearson and Barrowman allowed the company to slash 50 million pounds of debts. The startup now operates as Ve Global with almost half the staff.
The British High Court decision to remove Administrators, Williamson and Smits was backed by Brown and other shareholders.