A CASH-strapped community group DID sell its HQ to a private business too cheaply, a damning report by liquidators has concluded.
Mexborough Resource Centre was sold by Mexborough Community Partnership, which has since collapsed, in 2018 in what the town’s councillors branded a duff deal for the taxpayer.
And a progress report by liquidators concludes the £120,000 sale price, which the buyers arranged to pay in mostly instalments, was well below its true market value.
The directors of MCP obtained a valuation of £220,000 more than a year before agreeing the sale, while surveyors commissioned by the liquidator set the building’s worth at £320,000 \_ almost three times the price agreed with Mexborough Business Centre.
The Coalfields Regeneration Trust has served legal papers in relation to the sale after questioning whether the resource centre had been sold on the cheap \_ having granted the partnership £300,000 in 2006.
The liquidators’ progress report reveals the buyers paid £20,000 in two lump sums and had agreed to pay £876 a month over ten years, with more than eight-and-a-half years’ worth of payments totalling almost £90,000 still outstanding when the liquidators were called in \!a in July 2020.
Liquidator Edward Wetton said he had considered whether a claim could be made against the partnership’s directors “based on the apparent lack of basis or proper consideration for the property transaction”.
But he added he had decided it was not “commercially beneficial” to pursue such a claim as it would “almost certainly result in a pyhrric victory with significant legal expenses incurred and little to no prospect of a return to creditors”.
Mr Wetton said the directors appeared to have believed the offer from the business centre was “the only mechanism by which the community could continue to utilise the property” and failing to find a buyer would lead to liquidation of the partnership.
He said that “due to lack of evidence it would be extremely difficult to establish a lawful basis to bring a claim”.
The liquidator said he believed MCP had breached the terms of its grant from the CRT by selling the building without consulting them first.
This matter was being considered by his solicitors, he said.
Liquidators’ fees over the past year were set at more than £26,000 but Mr Wetton said he had not drawn this sum.