Hodgsons, appointed administrators for FADS parent company Divalimit, told DIY Week that the company's creditors are now likely to receive a 'prescribed-part payment' following last week's deadline for creditor claims.
A report, which was sent to creditors on March 26, showed that more than three quarters of a million pounds is owed to trade creditors. The 'prescribed part' of the company's net property is specifically set aside by law for "the satisfaction is unsecured debts of the company". The prescribed part is defined as 50% of the property up to a value of £10k and 20% of anything exceeding that.

However, it's likely to be at least three months before the level of payout and a payment schedule is confirmed.

The 'floating charge holder' Davrom Holdings Limited is likely to receive a distribution ahead of a prescribed part-payment.

Davrom is owned by Divalimit director Roy Gabbie, and was granted a debenture over Divalimit's assets in December 2008 in order to secure a £1.2m loan to fund its purchase. All freehold property was transferred to Davrom in 2009, before Divalimit entered administration, in part-consideration of the debt.

The administration, which was initiated in February this year, is the final stage in what became a terminal decline at the beleaguered retailer. The administrator's report said administrators saw "no prospect of recovery for the ongoing business" and had initiated a closing down procedure.

Only two stores are now trading out of 16 remaining retail outlets, with one of those set to close at the beginning of May. It's a far cry from the late eighties when the number of stores briefly exceeded 500.

A decision on when to close the final store has not yet been taken, according to administrator Steven Wiseglass, as the retailer tries to maximise the greatest realisation of the remaining stock.