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.
August 2021 Update
On 26 July 2021 (filed at Companies House on 7 August 2021) the liquidator confirmed that a claim had been lodged against the former parent company, which was defended. The liquidator did not accept the points raised in defence. An offer was made by John Shelton Fenty to settle the liquidation fees, debts and expenses on the basis that the legal action against the parent company ceased.
The liquidator confirmed that the offer made in May 2021 was acceptable to her and HMRC. This agreement was a total that was more than the initial offer from John Shelton Fenty but less than the claim made by the liquidator. Acceptance was a commercial decision based on the expectation that the additional costs in taking the matter to court would be greater than the difference in offer and claim.
The details of the settlement were not finalised at the time of the report, but she expected to pay a dividend to creditors within 6 months. The amount claimed by creditors is shown as £1,373,490.
We shall have to await the final Receipts and Payments report to see exactly how much he has repaid.
July 2022 Update
On 25 May 2022 the liquidator in FSF Dormant Limited filed her final return confirming that John Shelton Fenty had paid £600,000 in full and final settlement of the claims within that company's liquidation. It does not confirm whether HMRC remain in pursuit of any personal taxation arising, only in terms of claims within this company.
John Shelton Fenty remains director of three active (ie still existing) companies within the UK and, since January 2022, a company named Luxury Sun Kissed Properties in Spain.