Co-Cars and Co-Bikes went bust, leaving huge debts

A car and bike hire company operating in Cornwall which collapsed leaving creditors almost £500,000 out of pocket will have no funds to pay them, according to new documents filed at Companies House. Exeter-based Co-Cars, which ran e-bike and car-sharing schemes in Exeter, Plymouth, Falmouth and Truro for 2,500 customers, ceased trading in July 2023 and went into administration.

The documents show that Co-Cars Ltd is to be liquidated, leaving behind substantial debts. Despite the administrators managing to raise thousands from the sale of cars and bikes, it will not be enough to cover the large sums owed to unsecured creditors.

A recent report by the administrators states that they have received claims totaling £494,536 from 20 unsecured trade creditors. They also dealt with a “significant amount” of correspondence from car members and bike users, resulting in more than 22,000 emails being sent.

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Taunton-based administrators Milsted Langdon LLP confirmed there would be no money available to pay unsecured creditors. Joint administrator Richard Warwick said in his report: “We received claims totaling £494,536 from 20 creditors. In addition, we have received and dealt with correspondence from a significant number of subscribing car lenders and bicycle users since the company went into administration, with over 22,000 emails being sent in respect of these lenders.”

“No charges have been granted by the company and accordingly there is no requirement to create a fund from the company’s net floating charge property for unsecured creditors. No distribution will be paid to non-preferential unsecured creditors of the company,” reports Devon. Live.

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Co-Cars Ltd was established as a mutual company and was subsequently registered with the Financial Conduct Authority. Trading from The Generator Hub off Exeter Quay and a facility at Marsh Barton Trading Estate as Co-Cars, Co-Bikes and Co-Delivery.

The fleet consisted of 42 cars, consisting of 35 leased and eight directly owned vehicles, which the trustees auctioned off, raising £36,333. In addition, they had a variety of IT equipment, a stock of around 240 bikes, several cargo bikes, extensive bike tools and spare parts, as well as some spare parts related to bike charging stations.

A target figure of £26,784 was achieved through the sale of the fleet of bikes, associated spare parts and unassembled charging station components. In December, an auction of IT equipment and cargo bikes raised £6,800.

Administrators have been in constant contact with over 20 independent entities regarding their agreements and resolution regarding the 46 bicycle loading bays.

Newly released documents reveal that over the past six months, a further £23,445 was generated by disposing of other bikes and equipment, while a further £6,338 was obtained from 13 debtors. Existing book debts totaling £20,695 remain to be pursued; although, it is doubtful whether other amounts will ultimately be recovered.

From the funds collected, a significant part will be used to cover administrative costs and pay administrators. However, when the company is wound up, a dividend will be issued to ordinary unsecured preferred creditors.

An application for £919 was submitted from the Department for Business, Energy and Industrial Strategy, one of the preferential lenders.

Co-Cars, which was established in 2005, went into administration last year, blaming high fuel prices and vehicle vandalism for making it “impossible” to continue operating. Management also pointed to post-Covid changes in travel behaviour, the cost of living crisis and falling demand for business travel as reasons for their struggles.

Unfortunately, an attempt to secure further investment in 2023 failed, leaving Co-Cars with no option but to cease trading.

In its years of operation, Co-Cars has received substantial amounts of public money, including a £300,000 grant from Devon County Council for their e-bike scheme. The firm also raised £600,000 from more than 300 investors through a community share offering in 2020.

In his recent report, Mr Warwick explained that at the time of the last progress report, the administrators expected to exit administration by winding up the company. He adds: “We have, however, concluded that in order to complete the achievements, resolve the outstanding matters and pay a distribution to the ordinary preferred unsecured creditors, it is more appropriate to proceed to voluntary liquidation of the creditors as provided for in the approval Our. proposals”.