Issue - meetings

The Executive Member for Regeneration submitted a report for Executive consideration.

The purpose of the report was to update the Executive on the process being followed by the Directors to close down the Middlesbrough Development Company. The report also fulfilled the commitment to report on the Company’s status, in line with the requirements of the Partly and Wholly Owned Council Companies policy and supporting minimum standards.

In September 2023 Executive were advised that following a decision of the Directors of the company to close down the Middlesbrough Development Company was underway, and the process and timetable for this to happen were set out. Although the company had ceased trading at that point, there were still three major items identified at the time as requiring ongoing work or consideration: Construction contract for Boho Village; Construction contract for Newbridge Court and Newbridge Court the details of which were contained within the report.

As the three items were interrelated in terms of the Company’s balance sheet, they needed to be addressed in a specific sequence to ensure the company remained solvent at the point of closure. Without adhering to the above sequence (and transferring the asset last) the company would be unable to demonstrate it was able to meet its liabilities throughout the process.

Following the completion of the three stages detailed in the report, the closure of the company was now being progressed by FRP and would take a period of three to four months. This allowed for the appropriate notifications to be advertised and all remaining filings to be completed. The remaining net assets of the company would then be distributed to the Council.

ORDERED that Executive:

1.     Notes the progress made towards closure of the Middlesbrough Development Company, the commencement of the Members Voluntary Liquidation, and the distribution of key assets and liabilities to the Council.

2.     As the shareholder, formally endorses the director’s decision to close the company.

OPTIONS

Other options considered by the Directors of the Middlesbrough Development Company for supporting the final closure of the company had been examined, including the option to support the simple deregistering of the company. Although this option could have been delivered at lower cost (£15) it did not provide the appropriate assurance that all matters had been concluded satisfactorily and all risks had been managed.

REASONS

The previous decision of the Directors of the Middlesbrough Development Company to close down the company through a Members Voluntary Liquidation required the appointment of an external liquidator, to minimise the risk to the company and the Council. The process followed by the external liquidator would include the distribution of key company assets to the Council. This distribution of assets would allow the Council to commence proactive management of Newbridge Court.