The 79th Group- Administration Update And What It Means for You as a Loan Note Holder

Over the past few weeks, a wave of The 79th Group companies has collapsed into formal administration, putting millions of pounds of Loan Note Holders capital at risk.

If you hold a loan note with any of these companies, the decisions being made right now will determine whether you recover anything at all. Administrators are taking control, assets are being identified and will be reliased, and creditors will need to be proven and ranked accordingly.

This is a critical moment. You must understand how administration works, who is in charge, and what steps you need to take immediately to protect your position. This guide sets out the facts, and shows you how to respond.

Which Companies Are Now in Administration?

The following companies, each of which issued loan notes to investors, are now under the control of appointed administrators:

79th Luxury Living Six Ltd (LL6)

Appointed Administrators (Grant Thornton, Belfast):

• Stephen Cave (IP No. 10730) – [email protected]
• Gareth Latimer (IP No. 18132) – [email protected]

79th Luxury Living Five Ltd (LL5)

•   Robert Goodhew of Kroll Advisory (London) [email protected]

79th Commercial Three Ltd (CM3)

•      Andrew Stoneman of Kroll (Gibraltar) Limited- [email protected]

LL5 and CM3 were previously in interim receivership. They are now in full administration and formal insolvency proceedings have begun.

What Should Loan Note Holders Do Now?

If you are a loan note holder in LL6, LL5, or CM3, you are now considered a creditor in the administration. To protect your legal position and ensure you receive updates, follow these steps:

1. Contact the administrator appointed to the company in which you purchased loan notes.
2. Include your full name, loan note amount, and date of loan note agreement.
3. Attach any supporting documentation, such as your loan note certificate and payment confirmation.
4. Request confirmation that you have been added to the creditors list.

Once listed, you will receive statutory updates including the administrator’s proposals, financial statements, and information about potential recoveries.

Other The 79th Group Companies in Administration

Several other The 79th Group companies have also entered administration.

Companies with Quantuma Advisory Limited as Administrator:

• 79th Leisure Two Development Ltd
• 79th Leisure Two Management Ltd
• 79th Luxury Living One Ltd
• The 79th Group Three Ltd
• 79th GRP Client Ltd
• The 79th GRP Limited
• 79th Luxury Living Limited
• Seventy Ninth UK Limited
• Seventy Ninth Client Ltd
• Seventy Ninth Aviation Ltd

Administrators:

• Jeremy Woodside (IP No. 9515)
• Tracey Pye (IP No. 9671)
  Email: [email protected]

Companies with CG and Co as Administrator:

• DJC Leisure Ltd
• Highlands Hideaway Ltd (formerly 79th Leisure Two Ltd)

Administrators:

• Daniel Richardson (IP No. 12650)
• Edward M Avery-Gee (IP No. 12410)
  Email: [email protected]

If you are owed money by any of these companies, contact the respective firm with your loan note details and ask to complete a proof of debt. You must register with each company separately if you hold loan notes across multiple entities.

What Happens Next in the Administration Process

Once a company enters administration, a formal legal process begins. Within eight weeks of their appointment, the administrators must send creditors two documents:

Statement of Affairs

A summary of the company’s financial position, including assets, debts, and liabilities.

Administrator’s Proposals

An outline of what the administrators plan to do. This typically includes asset sales, the distribution of funds to creditors, if any, and the formal closure of the company.

These documents are key to understanding whether any recovery is likely and what options are available to creditors.

What Does Administration Actually Mean?

The administrator of a company must perform their functions with the objective of:

1. Rescue the company as a going concern

This is the top priority. The goal is to save the business so it can keep operating. The administrator might try to restructure the company, reduce debts, or find new investment. The aim is to keep the company alive, protect jobs, and avoid collapse.

2. Get a better outcome for creditors than liquidation

If rescuing the company isn’t feasible, the administrator must then consider whether it’s possible to deliver a better return to creditors as a group than they would receive if the company were simply wound up.
 This might include:

• Selling the business as a going concern to a third party
  
  
• Realising assets in a more strategic or phased way
  
  
• Preserving customer or supplier contracts that add value

The idea is to manage the situation in a controlled manner to maximise overall recoveries, rather than forcing an immediate break-up and fire sale of assets. This objective prioritises collective creditor benefit, even if the company itself can’t be saved.

3. Realising assets for the benefit of secured or preferential creditors

Only when neither of the above options is viable will the administrator focus solely on realising the company’s assets to repay secured or preferential creditors (such as employees or lenders with fixed charges). At this stage, the administrator is effectively winding the business down with limited scope to generate wider creditor returns.

In the current circumstances, therefore, only (3) is likely to happen. The proceeds from these sales are pooled into what is known as the insolvency estate.

How Funds Are Distributed

Funds from the insolvency estate are paid out in a strict order of priority:

1. Administration costs, including professional fees for administrators, lawyers, and valuers.
2. Secured creditors, if any.  This should include secured loan note holders.
3. Unsecured creditors, including loan note holders without valid security.

What About Security on the Loan Notes?

LL6: Secured

LL6 appears to have a secured creditor, T and T Trustees Ltd based in Gibraltar. They hold a fixed and floating charge over the company’s assets.

This means:

• Administration costs are paid first.
• Any remaining funds are handed over to T and T Trustees up to the amount that is actually secured.
• T and T Trustees then distribute these funds to LL6 loan note holders proportionally, based on the amount each is owed.

Distributions are made on a pari passu basis, meaning investors are treated equally and receive a proportional share of available funds.

LL5 and CM3: Unsecured

There does not appear to be any valid security in place for LL5 or CM3. Loan note holders in these companies may therefore likely be treated as unsecured creditors.

That places them at the bottom of the payout waterfall. If the funds raised do not exceed the costs of administration, they may receive nothing.

How Long Will the Administration Take?

Although administrations are initially set for 12 months, extensions are routinely granted, especially in complex cases like this.

Every extension means more professional fees. Administrators, lawyers, and valuation experts continue billing, and those costs come straight out of the pot intended for creditors.

The longer this process drags on, the less money is left for loan note holders. In many cases, extended administrations consume the estate entirely, leaving creditors with little or nothing to recover.

The Risk: No Money Left After Costs

In many insolvency cases, we have seen this outcome:

• Assets are sold.
• The funds raised are not enough to cover the costs of administration.
• Nothing is left for unsecured creditors.
• In some cases, even secured creditors receive little or no distribution.

This could happen here, but we will not know for sure until the administrators publish the Statement of Affairs and Administrator’s Proposals.

How Insolvency & Law Can Help

At Insolvency & Law Ltd, we help loan note holders with the recovery of funds from a third party recovery, which means seeking recovery from regulated professionals who promoted or facilitated the loan note schemes.

These include:

• Financial advisers
• Lawyers
• Accountants
• Auditors
• Corporate finance firms
• Other Professionals

Most of these firms were required to hold Professional Indemnity insurance. Claims can often be made against that insurance, even if the firm has stopped trading.

In many cases, this is the only realistic route to a meaningful recovery, especially where the administration process leaves little or nothing behind.

Final Thoughts and Loan Note Holders Action Points

• LL6 investors may recover something through T and T Trustees, depending on what remains after costs.
• LL5 and CM3 investors may receive something or probably nothing, as there appears to be no security in place.
• All loan note holders must act now to ensure their names are on the correct creditors list.

If you are serious about recovering your loan note funds, you will need to take further action, and that is outside the administration process. That means considering legal action against third parties who may have breached their duty of care.

Contact Insolvency & Law Today

We are here to help you:

• Understand your rights
• Prepare your creditor claim
• Review your loan note agreement
• Pursue regulated parties for recovery

Start the recovery process today.

Email: [email protected]
Phone: 020 7504 1300
Website: www.insolvencyandlaw.co.uk

Frequently Asked Questions

What happens after I submit my proof of debt?
Once you are listed as a creditor, you will receive updates from the administrator, including financial statements and voting proposals.

Can I register claims with more than one company?
Yes. Submit a separate claim for each company in which you hold a loan note.

What are my rights as a creditor?
Creditors may vote on proposals, challenge the administrators’ actions, and participate in coordinated legal efforts.

Can I still recover funds if the company is insolvent?
Possibly. Recovery through administration may be limited, but legal action against third parties may offer another route to recovery.