Jump to content
House Price Crash Forum
Sign in to follow this  
PJ1977

Picking Over Wg Mitchell

Recommended Posts

A fair bit has been written about the collapse of the Taggart business but there has maybe been less attention paid to the demise of another Co Derry family business - WG Mitchell which was owned by the Hegartys.

It's focus was on commercial sector, mainly in Scotland but they have said similar thing to the Taggarts about their insolvency - they had a plan to get out of the hole and the bank, whether through malice or incompetence, pulled the plug too early, destroying value in the process.

What does the administrators report tell us?

WG Mitchell was incorporated in 1944, as the vehicle for the Hegarty's butchery business and they got into the property game locally in the 1960s before expanding maionly into Scotland.

When it went under in April last year it had been experiencing cashflow problems for some time, some properties had been touted around but no one was buying. A backlog of creditors had built up, including £5m owed to the taxman. RBS didn't like what they saw and called in Ernst and Young.

They found that WG Mitchell (Derry) the main company in the group owed RBS £253m. There was also some money owing to Bank of Ireland, but in boomtime banking style they had cocked up the security, lending money against a property in Derry which RBS had first ranking security on.

The trade creditors, who will get nothing, were owed £1.2m, almost all of that was owed to a firm of Edinburgh solicitors, Dickson Minto.

E&Y basically broke the company up into three groups: NI assets, hotels or UK investment property.

BTW were asked to flog the NI stuff and Savills would look after the rest.

Progress has been pretty brisk in selling the stuff. Three Derry properties on the Diamond, Victoria Road and 22 acres of farmland at Termonbacca have been disposed off. We already knew the Richmond Centre in Derry has been sold to West Register, but it went for about £2m less than has been reported and it included taking on about £220k of debt from tenants.

A large whack of Scottish stuff has been picked up by a Hambro fund for about £45m; some Charlotte Sq properties appear to have been sold on from that parcel.

Some projects of AWG, a Scottish joint venture have also been sold.

A London hotel has also shifted.

It's a reasonable bit of business for E&Y who thus far have posted an indicative billing of not far off £1m.

Oh and the administrators are also selling 50,000 shares in Celtic FC.

Share this post


Link to post
Share on other sites

As far as I understand, Taggart was a Housebuilder/developer and WG Mitchell were property investors and not involved in the housing market. The Banks appear to have over-reacted in both cases and had they held their nerve both companies might have survived. What I don't understand is, what point are you trying to make?

Share this post


Link to post
Share on other sites

As far as I understand, Taggart was a Housebuilder/developer and WG Mitchell were property investors and not involved in the housing market. The Banks appear to have over-reacted in both cases and had they held their nerve both companies might have survived. What I don't understand is, what point are you trying to make?

Survived? seriously???? Can I have some of that stuff you're smoking please?

Share this post


Link to post
Share on other sites

As far as I understand, Taggart was a Housebuilder/developer and WG Mitchell were property investors and not involved in the housing market. The Banks appear to have over-reacted in both cases and had they held their nerve both companies might have survived. What I don't understand is, what point are you trying to make?

The point I'm making is that both businesses, despite being in different sectors, have had the same unflattering story to tell about RBS.

For what it's worth there is perhaps an arguable case that the WG Mitchell case was an over-reaction, given the speed with which their portfolio is being disposed of.

I think it's ludicrous to imagine Taggarts were viable - their business model was holed below the waterline in 2008 and the climate in which they operated has only got worse since then. Idiotic as much of Ulster Bank's property lending was in the bubble I would not blame them for not wanting to throw good money after bad.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.