An insolvent UK recruitment company, which owes the UK exchequer hundreds of thousands of pounds, has been acquired for an initial £10,000 by a venture created by the previous owner – despite him receiving millions from the business in its final three years.
Premier Group Recruitment went into administration this month with debts of £2.9m – including £647,000 owed to HM Revenue and Customs (HMRC), which had commenced enforcement proceedings against the company. The recruiter’s assets were acquired three days later by a new company, PGGBR Ltd, founded by Andrew Woosnam, Premier’s 99% shareholder.
Woosnam has an outstanding director’s loan of £1.2m from Premier – a debt that appears to have increased by £265,000 since the end of its 2024 financial year, after which the business admitted to “substantial doubt about the company’s ability to meet its obligations in the foreseeable future”.
Meanwhile, Premier’s 2022 and 2023 annual reports showed a total of £1.95m in dividends were paid to the company’s shareholders.
The deal appears to be the latest example of what is known as “phoenixism” – when companies are liquidated and directors are able to rise from the ashes with a new entity, free of debts. HMRC estimates the practice, which is generally legal, cost the exchequer about 22% of the £3.8bn of tax losses reported in 2022 to 2023.
Last month, the Guardian reported on the case of another defunct recruitment company – Challenge Recruitment Group – which left debts to HMRC of £90m and whose assets were acquired by a competitor via a “pre-pack” administration, where its rescue was agreed before commencing the insolvency proceedings.
The founders had previously reacquired Challenge assets from an earlier administration when HMRC was owed a further £34m – before then selling a majority stake in their new business to employees, months before insolvency practitioners were appointed for a second time.
In Premier’s case, Woosnam’s new company has reacquired his former business’s assets by paying an initial £10,000 and then committing to “monthly instalments of £25,000 over the period to 30 September 2027”, bringing the total purchase price to £610,000 – according to a report by administrators Rob Keyes and David Taylor of KRE Corporate Recovery. The instalments will probably be paid out of the new business.
The administrators, who were appointed by Premier, also turned down an offer by an unnamed second bidder – who offered “an initial cash consideration of £321,000” as well as a “further royalty payment” – which is thought to have been potentially worth an extra £110,000.
The administrators currently estimate recovering about half of the outstanding £1.2m director’s loan.
Keyes said Woosnam’s bid presented the possibility of the best outcome for creditors – partly because the businessman had given personal guarantees to Premier creditors, but would have had no income to settle those debts unless he had reacquired the business. Administrators are also examining the dividends paid to Woosnam to establish if they were permitted under accounting rules.
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When asked how much of the £647,000 debt to HMRC would be repaid, Keyes replied: “That’s a question. Have you got a crystal ball?”
In relation to recovering the £1.2m director’s loan, the report added: “The main asset is [Woosnam’s] matrimonial property which is shared with his wife (who retains an independent co-ownership of the property) and four young children. We stress that the estimated to realise value is for illustrative purposed [sic] only and will be reviewed.”
Woosnam did not respond to efforts to contact him.
