The auctioneer, Coys of Kensington has collapsed into Administration. We take a look under the bonnet.
What seemed like a short blog about the collapse of an classic car auction house has turned into an investigative exercise that heroic Hercule Poirot would be proud of. We’re no Poirot, but we did uncover some interesting information.
First off, will the real ‘Coys’ please step forward. From records at Companies House there are a few variations of the Coys name, that in itself revealed some interesting details.
So, which Company has collapsed? According to Companies House it is Coys of Kensington Automobiles Limited, company number 4627057. Not to be confused with Coys Croup Ltd 04626262 or Coys Automobiles Ltd 11092191 or any other of the Coys companies still operating.
They are important distinctions. They are all legally separate. Many of the above though do have common Directors, one in particular stands out; Mr Christopher Routledge.
From the publicly available records we can see Coys of Kensington Automobiles Ltd was incorporated in January 2003. It was incorporated when Coys Ltd which collapsed into Administration and ceased trading in March 2004. Reports at the time show it owed around £1.7m to classic car owners. The existing owners of Coys of Kensington Automobiles Ltd purchased the assets and goodwill of the collapsed company, Coys Ltd. There is nothing illegal in any of that.
This wasn’t how it was meant to be. A Coys name has in fact been around since 1919. The modern heyday for Coys was in the 70s and 80s when it operated from a cobbled mews showroom in Kensington. Many of the much-respected individuals of that era went on to join or form auction houses. Since 2006 Coys has operated from a HQ in Richmond where all the Coys business’s, along with various other businesses, are registered.
In our search we did note that Coys, in various guises, has been no stranger to litigation as both defendant and complainant. One case in particular is interesting
In 2010, the Advertising Standards Agency (ASA) considered a complaint made by Mr Edwards in respect of Coys advertisements. Mr Edwards, asserted that Coys had been incorporated in 2003 therefore, using the terms “founded in 1919” in one ad and “since 1919” in the another had the potential to mislead the public.
The ASA looked at the complaint and upheld it, agreeing with Mr Edwards. Coys were unhappy and took the ASA to a Judicial Review in the High Court. The pleadings in the case are long as is the Judgment. In summary, Judge Thirlwell threw out Coys application. The judge ruled that, taking the its experience and expertise into account, it was plainly open to the ASA to conclude that, in the context of classic car adverts, the words “Since 1919” and “Founded 1919” were likely to mislead potential customers by suggesting that Coys (incorporated in 2003) had a long trading history dating back one hundred years, which itself could suggest financial stability. Coys lost.
Moving to a separate matter we found a legal charge listed at Companies House in April 2018. A legal charge is a usually when a business allows a debt to be registered against some form of collateral or security that can be sold if the debt is not paid. According to the records the charge was security against money owed. It states; “The Creditor (Sue Danby) is owed the sum of £337,000 by the Company (Coys) in respect of the proceeds of sale of a vehicle sold by the Company on behalf of the Creditor”. The records show the charge was satisfied in full.
Turning to the company closure. It’s unclear at this stage what exactly caused the Directors to place this particular Coys company into Administration. One obvious benefit of the Directors bringing in Administrators is a protection they then receive from any aggrieved creditors. That is to say, anyone that Coys owes money to cannot chase the Directors.
This is relevant in a number of ways. At a major auction in Essen, Germany, in 2018, Coys sold a rather magnificent Lamborghini Miura for 1.3m Euros. A year late the vendor had not seen any of the sale proceeds. When the Coys team attended the Essen Auction in April 2019, the Polizei were waiting. After allegedly arresting Mr Routledge they led him away in handcuffs. It is believed the outstanding monies were subsequently paid. Probably all a simple misunderstanding.
More recently in Jan 2020 the CEO of a German insurer issued court action against Coys relating to a Porsche 911 Carrera 2.7 RS. Mr Pohl paid £390,000 for the Porsche. In summary, he alleges he was misled over the car’s condition. Coys strenuously denies the allegation and has submitted a defence in response. The case was due to come to Court in May 2020
Taking a look at the latest company accounts filed at Companies House reveals some interesting information.
The latest filing is December 2018. The filing is not full accounts it is un audited and abridged. Nothing illegal in that. But it does make the information somewhat opaque.
We can see current assets and liabilities amount to the following.
Balance minus £870,514
As you can see that leaves a deficit of £870,514, by any standards is a big hole. However, through a “revaluation” of intangible assets the accounts show a positive balance of £510,000. The full accounts are not published so we cannot probe any further to puzzle this out.
When Coys Ltd went bust in 2004 owing £1.7m the new owners publicly vowed that ring-fenced accounts would be set up. That means any monies coming in from purchasers would be kept in separate bank accounts away from the companies normal operating funds. In the event the company did go bust, the money would be safe.
We’ll have to wait for the interim report from the Administrators FRP Advisory Ltd to see how true that is.
We’ll be following events very closely.