IPA exclusive industry update from Insolvency Insider
IPA Insolvency Practitioner newsletter, May 2025
A specially curated selection of the top stories for IPA members from Insolvency Insider Editor, Dina Kovacevic. More information on all the stories and the link to subscribe to the newsletter is here.
Recent Insolvencies
Modella Capital, a private investment firm which owns Hobbycraft and The Original Factory Shop, has launched a CVA which reportedly hinges on being able to renegotiate rents at approximately half of its stores. Hobbycraft is set to close at least 9 stores, impacting approximately 125 jobs, with a further 18 stores subject to closure if deals cannot be reached with landlords. Meanwhile, the company is reportedly looking to negotiate rent cuts at nearly half of its The Original Factory Shop stores, which employ about 2,000 people. Interpath is handling the CVA.
Cardiff Rugby, a professional rugby club competing in the United Rugby Championship and European Professional Club Rugby competitions, had its business and assets purchased out of administration by Welsh Rugby Players Limited, a company owned and controlled by The Welsh Rugby Union (the “WRU“). The Club, which plays its home games at the Cardiff Arms Park, has a rich history dating back to 1876. According to a statement from joint administrators Rob Lewis and Ross Connock of PwC, who were appointed on 9 April, the Club was acquired by Helford Capital in January 2024, and the incoming shareholders provided various commitments to inject funding to support the Club’s operations. The shareholders injected certain sums, but significantly less than they agreed to provide. Consequently, the Club’s cash position deteriorated and ultimately became sustainable. Immediately following their appointment, the administrators completed a sale of the Club’s business and assets to the WRU, providing stability for the Club to continue to trade whilst longer term ownership arrangements are explored. The sale includes the transfer of all 64 employees and 67 playing staff, whose contracts will be honoured, while the Club’s playing and business operations (including Cardiff RFC and the Cardiff Rugby Academy) will continue as normal under the WRU’s ownership. The WRU and Paul Edward Bailey have registered charges against the Club.
Lykke Corp UK, a cryptocurrency exchange holding client assets of approximately US$68 million, was placed into provisional liquidation on 20 March on application by five representatives of the creditor group. In June 2024, Lykke was allegedly subject to a hack in which US$22.8 million worth of cryptocurrency was stolen. A group of 85 creditors, assembled by Tobias Schaffner and Niccolò Gozzi of Niedermann Rechtsanwälte, sought recovery in respect of crypto- and fiat currency, which they were unable to withdraw from Lykke. Michael Leeds and Jonathan Thielmann of Interpath were appointed as joint provisional liquidators to investigate and protect the company’s assets prior to the winding-up hearing.
Insights
Henry Harris of DMH Stallard emphasises that administrators must meticulously document and justify their remuneration claims, sharing a case study which reinforces that the initial fee estimate submitted by administrators serves as a crucial benchmark against which their final remuneration will be assessed.
Caroline Platt, Rob Gray, Katharina Crinson and Richard Tett of Freshfields share key takeaways from the Petrofac restructuring, noting the High Court’s focus on adequate notice to affected creditors and the scrutiny of advisory fees, which may influence future restructuring plan approvals and the design of creditor communication strategies.
Chris Paschali of Squire Patton Boggs explains how the Supreme Court’s recent decision in El-Husseiny v Invest Bank confirmed that a debtor does not need to legally or beneficially own an asset for a transaction to be caught under s423, s238 and s339 of the Insolvency Act 1986.