Culimeta Saveguard - Case Update

The joint administrators of a company that specialises in producing acoustic and thermal insulation products have revealed how a shareholder dispute ultimately drove the company into administration.

Culimeta Saveguard was established as a joint venture in 2004, owned by two UK shareholders — Brendan McCormack (25%) and Stephen Shaughnessy (25%) — and Cuylits Holding GmbH (50%), a German company. Culimeta Saveguard specialises in the conversion of high-performance technical fibres, producing acoustic and thermal insulation products primarily for the automotive and industrial sectors, but also for fire protection and PPE markets.

Kerry Bailey and Lee Causer of BDO were appointed joint administrators on 15 March 2024 following a breakdown in the relationship between the shareholders. Cuylits, owed c. £1.66 million on shareholder loans and £537,000 in its capacity as a creditor for goods supplied, issued the application to place the company into administration. The company disputed the debt and said it had a counterclaim. The company also argued this was a shareholder dispute which should be dealt with in the appropriate court, and asked the Court to refuse to grant the administration order on that basis. The Court disagreed and appointed administrators.

Given the nature of the appointment, the administrators had limited time and access to the company for the purposes of any contingency planning. A successful AMA process achieved a sale of parts of the business to Eminox, preserving 68 jobs, repaying secured creditors National Westminster Bank and RBS Invoice Finance in full and likely securing a significant distribution to unsecured creditors.

The joint administrators’ proposals (filed in May) can be found HERE. They have been assisted by Addleshaw Goddard (legal advisers) and Lambert Smith Hampton (chattel agents).