PPE Medpro, the company linked to Baroness Michelle Mone, has been wound up at a specialist companies court.
The decision, made by a judge at a hearing on Thursday, could mean that the government is unlikely to see most of the £148m owed to it by the company after it was found to have breached a contract to supply 25 million surgical gowns during the coronavirus pandemic.
PPE Medpro, a consortium led by Lady Mone’s husband, businessman Doug Barrowman, had been ordered to pay the sum after losing a High Court battle against the Department of Health and Social Care (DHSC) in October.
But it filed for administration on 30 September, the day before the ruling, with the money still unpaid.
At a hearing at the Insolvency and Companies Court on Thursday, barristers for the three joint administrators asked for PPE Medpro to be kept in administration to pay off some creditors.
Barristers for the DHSC, an unsecured creditor, asked a judge to wind up the company, which they said was “hopelessly insolvent”.
In a ruling, Insolvency and Companies Court Judge Sebastian Prentis placed the company into liquidation.
He said: “I remain of the firm view that the correct course is now to discharge the administrators and to compulsorily wind up the company.”
Records filed by PPE Medpro’s administrators last month showed that, as well as the money owed to the DHSC, HMRC was also claiming £39m in tax from the company.
But the filings revealed it only had around £600,000 available to pay unsecured creditors.
Simon Passfield KC, for PPE Medpro’s joint administrators, said in written submissions that the company had one secured creditor, Angelo (PTC) Limited, which, according to Companies House, is registered in the Isle of Man.
He continued that the DHSC was the firm’s largest unsecured creditor and had “expressed a clear preference for the company to move immediately into compulsory liquidation”.
In court, the barrister said that PPE Medpro had “sufficient property” to pay off a debt of around £1m to Angelo, and that the administrators believed there would “also be a return to the unsecured creditors”, including the DHSC.
Mr Passfield continued that there were “potential” legal claims by the company against “third parties”, which, if successful, “could result in substantial recoveries” of funds, but no further details were given in court.
He said: “The administrators are as best placed as any liquidator to achieve the best outcome for creditors as a whole.”
David Mohyuddin KC, for the DHSC, said in written submissions that there was no “realistic alternative” to winding up the company.
He said: “The only order that the court needs to, and should, make is that Medpro be wound up.”
He continued: “The court’s discretionary power to make a winding-up order against Medpro is clearly engaged: it is obviously and very significantly insolvent.”
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