Collapsed Royale Life owed me £4,500 for painting work: Will I ever get paid?

I’m a painter and decorator and in the spring and summer of 2023, I did some work for Royale Life, an operator of bungalow complexes and holiday homes.

I was paid in part, but am still owed £4,500. Shortly after my work finished, the company went into administration. 

I spoke to the administrators but they said I didn’t have a claim because I invoiced for my work before the company went into administration.

Is there any way I can still get my money?

I’m particularly annoyed because the company’s former director, Robert Bull, seems to still be living the high life even though he was declared bankrupt. Anonymous

Chasing payment: Our reader was owed £4,500 for work he did for Royale Life before it went into administration – now he is wondering if he will ever be paid

Helen Crane of This is Money replies: I am sorry to hear you are owed so much money. You told me that the sum of £4,500 is ‘a fortune’ for you as a sole trader. Essentially, it means that you worked for several weeks without pay.

The Royale Life administration, which was declared in August 2023 because the firm was unable to pay its £308million debts, particularly sticks in the craw for you because of the public persona of the firm’s former director, Robert Bull.

A larger-than-life character known as ‘Bob the Builder,’ he made his fortune by transforming static caravan parks into bungalow villages for people who wanted to downsize. He built up this business following a previous bankruptcy in 2016. 

Astonishingly, just months before he was declared bankrupt for the second time in December 2023, he featured at number 88 on The Times’ UK Rich List and was estimated to be worth £2billion. 

He lives in a £10million mansion in Southampton – featuring its own bowling alley – and until things came crashing down late last year, his fiancé often posted pictures of the pair on social media, enjoying lavish holidays and posing by their collection of supercars.

But lawyers in a bankruptcy petition against Mr Bull said his ‘claims to be very wealthy were wrong,’ Bloomberg reported. 

He has since has had his collection of cars and other items repossessed, according to the Times, though he still lives in his large home and says he wants to make a business comeback. To you, that just doesn’t seem fair.  

I asked a legal expert to explain how the administration process works, and whether or not you could ultimately get paid for the work you did at the Royale Life park.

Sophie Campbell-Adams, a solicitor at law firm Britton and Time, said: ‘When a company goes into administration, administrators are appointed to manage the company instead of the directors. 

‘The purpose of their appointment is to try to save the company from insolvency. If that is not possible, they will wind the company up – in other words, sell its assets and pay creditors.

‘Most administrations result in a wind-up in the long run. Administrators continue trading the company for a certain period in the hope of achieving a higher return on the company assets than if they were sold straight away. This is for the benefit of all creditors.’

Royale’s administrators are a firm called James Kowper Kreston, which was appointed on 15 August 2023.

Weeks of work: But our reader only got paid for a small amount of his painting and decorating

A buyer has not been found for the company, and the administrators have now sold the firm’s main assets, its portfolio of 35 bungalow parks across the UK.

In January of this year, they were acquired by a company called Ambassador Regency Group for an undisclosed sum of money.

That will have been a relief for residents living on former Royale Life parks, and the staff who work on them, as it means the sites will continue to operate.

But for Royale’s creditors, including small businesses such as yourself, there are still doubts about whether they will get their money.

While money was made from the sale of the sites, Royale had debts totalling £308million when it went into administration – and under the insolvency rules, these must be paid off first.

As Campbell-Adams explains: ‘Secured creditors (who entered into certain agreements) are entitled to be paid first when a company is wound up. Mortgages are a prime example.

‘There are also preference creditors, such as company employees, who get paid after secured creditors. Suppliers who are owed money for goods and services are unsecured creditors and get paid last.

Sadly, this means that sole traders such as yourself often get a raw deal.

Unsecured creditors should still be able to make a claim with the administrators, though. This means that, once the secured and preference creditors have been paid, they could be able to get a share of what is left over.

The big caveat here is that there is sometimes no money left over. Companies go into administration because they are unable to pay their debts, and while administrators do their best to raise additional funds through selling assets, it is rarely enough to give everyone involved what they are owed.

You say that you were told you couldn’t make a claim with the administrators because you invoiced Royale before 15 August 2023.

I believe there was a miscommunication here. What I think the firm was actually telling you was that £4,500 invoice couldn’t be considered for payment right away, and that you would need to wait until the correct point in the administration process was reached.

Campbell-Adams adds: ‘Whilst they are running the company, administrators can enter the company into contracts with third parties, which is why Royale Life can still pay for goods and services after 15 August 2023.

‘However, as soon as a company is placed into administration, creditors are prevented from pursuing legal proceedings against the company. 

‘This is known as a statutory moratorium period. Companies that become creditors after administrators are appointed can still bring a claim because the debt is the administrators’ doing.’

Unpaid: The invoice was submitted before the administration, which means it cannot be considered for payment until the right stage in the process is reached

You have learned that contractors working on Royale sites at the moment are being paid, while you are still waiting for your money. That is because they were appointed by the administrators, and not by Royale.

You told me you think that is highly unfair, and given your situation I can see why you feel that way.

‘The administrators have told me they won’t pay me because I invoiced them before they got involved, to me that shouldn’t matter,’ you said in your email to me. ‘Because I’m a sole trader they think they can just fob me off but I’m determined to get my money.’

Unfortunately, the administrators don’t have a choice in this matter. As the debt was incurred on Royale’s watch, before the administrators became the company’s directors, they don’t have the legal authority to pay you right now.

The claims of all creditors can only be considered once the company is wound up and the administrators know how much money, if any, is left in the pot. 

To pay you now would be unfair on all the others like yourself who are also waiting to see if they can get their cash.

You could ask the court for permission to begin legal proceedings against Royale, but this would be expensive – probably costing more than the £4,500 you are owed. Permission would also likely be denied, according to Campbell-Adams. 

‘A company enters administration because it does not have enough money to pay all of its creditors, she says. ‘Therefore, the court needs to consider the interest of all creditors so allowing one creditor to sue would be unfair on the others.’

Sadly, your only option is to wait until the company is wound down and see what, if any, money is left for unsecured creditors.

Says Campbell-Adams: ‘The best option is to submit the details of his claim to the administrator (known as proof of debt) and ask if it is accepted his company is an unsecured creditor.

‘If they accept this, then he should ask for periodic updates and check in with the administrators. He could pursue a claim against the company after 12 months if the administrator ceases acting and has not extended their instruction. This is very rare in practice.’

I contacted Royale’s administrators, James Kowper Kreston, to ask whether unsecured creditors like yourself would be likely to get any of the money they are owed – and I am sorry to say it was not good news.

They told me that, in the case of Royale Life, it was very unlikely that any meaningful amount of money would be left over for unsecured creditors at all.

However, the firm suggested that you submit a form on its website, so that you would receive updates about the administration, and be notified if the situation changed.

I understand that this is a disappointing outcome for you. 

You told me:  ‘Robert Bull is still living his high life, totally aware he is ruining people’s lives. He shouldn’t be allowed to get away with it, but for some reason the law seems to be on his side. It’s not right.

‘Maybe £4,500 isn’t much to them, to me it’s a fortune.’

This post first appeared on Dailymail.co.uk