John Fenty: a taxing affair

Cod Almighty | Article

by Tony Butcher

14 December 2020

In 2019, the liquidator of a company whose only director is John Fenty said she was taking legal advice whether to pursue a claim against him. What could happen is of huge concern to the board of Grimsby Town, and its fans

Well it all started when John Fenty, our local fridge magnate, sold Five Star Fish, way back on 2004. The quirky nexus of personal interests and company and taxation laws resulted in it still existing as a dormant shell for another 11 years, until it was liquidated in 2015.

The liquidator appointed by the sole director and shareholder - Mr John Shelton Fenty - was replaced less than a year later by one chosen by the creditors. The major creditor is the taxman, relating to something that was described (in the new liquidator's report in 2017) as a "potential liability due as a result of a tax avoidance scheme used by the company."

The director [Fenty] via his advisor has responded to queries in relation to this debtor only to state that he cannot recall what the debt was, only that it was not realisable. The explanation is not satisfactory and I continue to investigate

Aren't we all waiting with bated breath for the liquidator's latest Receipts and Payment Account to be published. Companies House have had it since August, so perhaps it'll be all over by Christmas and we'll get to the bottom of the mysterious removal of an asset - a debt from a connected company - of £610,032 from the company's accounts just before liquidation, and the full facts surrounding the £1,172,773 in unpaid tax that relates, in some way, to an Employee Benefit Trust in what was Five Star Fish all those years ago.

As the liquidator reported in 2018: "The director [Fenty] via his advisor has responded to queries in relation to this debtor only to state that he cannot recall what the debt was, only that it was not realisable. The explanation is not satisfactory and I continue to investigate." In 2019 she stated she was taking legal advice on whether to pursue a misfeasance claim against the director - John Fenty.

So what's this got to do with Grimsby Town? The Town accounts show that the continuation of the football club is reliant upon the directors not calling in their debts, and them undertaking to continue providing necessary funding. If the majority shareholder has not got the cash, or needs to utilise his assets to repay debts, then that calls into question the solvency of the company running Town, and places an emphasis on the other directors ensuring that either they can provide the moneys or find alternative funding.

Promising to pay is one thing, having the means to do so is another. It's a question that, should Town enter any formal insolvency, relates to trading with knowledge of insolvency, which the directors can be personally liable for under s214 of the Insolvency Act 1986 (wrongful trading) and is disqualifiable behaviour.

So you bet it's relevant to Town – and each member of the board of directors.
It is, of course, in everyone's interests that all this gets cleared up, so that there are no questions hovering over our majority shareholder's competence, judgment and/or probity, in any of his guises – nor the ability of the club to fund trading.
If there's nothing to hide there's nothing to fear.

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