The administration of Stephen Thompson’s failed convenience shop business will extend into next year.
The former Dundee United chief set up Eddy’s Food Station in 2022 with ambitions to grow to 50 shops and 800 staff within five years.
But two years later the business entered administration, with millions of pounds of debt.
Mr Thompson was subsequently made bankrupt a week before Christmas last year.
Eddy’s Food Station debts
Since being appointed in April last year, administrators from FRP Advisory have been working to sell the company’s assets and establish the scale of the debt.
The administration process was due to conclude in April but has been extended until April 24 next year.
This will give administrators more time to adjudicate on creditor claims and distribute funds.
Eddy’s Food Station grew to have six shops – including locations in Ceres, Leuchars and Buckhaven in Fife – though just three outlets remained at the time of collapse.
A new progress report from FRP shows the scale of the company’s debts.
A secured creditor, Nash Business Services Limited is owed £3.8m while HMRC is due £141,000 and unsecured creditors are owed around £550,000.
The three remaining stores owned by the company were sold to Dundee-based CJ Lang for £1.5m a year ago. This included sums of £35,000 for stock and £110,000 for furniture and equipment.
FRP expects HMRC will be repaid in full and there will be “sufficient funds available to make a partial distribution to unsecured creditors”.
In terms of the secured creditor, the new report adds that “an issue with the security remains unresolved, and the secured creditor is assessing their options”.
What went wrong for Stephen Thompson’s business?
Mr Thompson previously told The Courier that “no banks would speak to him” as the company failed.
He highlighted spiralling energy costs as one of the reasons the business didn’t work.
However, FRP said the company had “paid premiums” to secure leases as it built up its portfolio of six stores and had also incurred “substantial” refurbishment costs.
It said three sites were sold at a substantial discount.
The administrator said: “The company has struggled with high debt servicing costs and had experienced cash flow pressures caused by high investment costs and lack of profitability.”
The administrators said the extent of debts in the company meant a sale as a going concern was impossible because “the company did not have sufficient working capital to trade in the short term and insufficient assets to liquidate to satisfy creditor demands”.
Mr Thompson, who sold his Dundee United shareholding in 2018, previously stated he had invested his “total pension pot” into Eddy’s Food Station.
The businessman was granted sequestration – the Scottish term for the legal process of declaring someone bankrupt – on December 18.
A document available at Accountant in Bankruptcy, Scotland’s insolvency service, details his level of debt at £881,833.
Mr Thompson announced he had filed for bankruptcy when he was a guest on BBC’s Off The Ball radio show at the start of November.
When asked by host Tam Cowan what he has been up to, he said: “Well, I’ve kind of hit rock bottom to be honest. I actually signed a petition for bankruptcy yesterday.
“It’s not a great place to be in life but it’s a fresh start for me.”
Conversation