Breakaway Homes Situation as of 16 April 2009

Round-up

30 yrs ago: John Jayne starts a mobile home company

April 2000: Company is incorporated into Breakaway Holiday Homes

Limited with John Jayne as sole director

July 2001: Name is changed to Breakaway Homes Limited

Sep 2001: Breakaway Homes shows a profit in its initial accounts

Sep 2002-
Sep 2005: Breakaway Homes makes a loss

Sep 2006-
Sep 2007: Breakaway Homes makes a profit. No accounts are prepared beyond
September 2007.

Sep 2007: Breakaway Homes lends nearly £1.5 million to Breakaway Spain Ltd, a
separate company in which John Jayne is also sole director. The money was
to buy land on which Mr Jayne hoped to get planning permission for a mobile
home park. Breakaway Spain bought the land for 1.9 million Euros and it
remains Breakaway Spain's main asset. However Breakaway Spain never
managed to secure planning permission on the land.

Mid 2008: Breakaway Homes say they started to see a decline in sales due to the
economic downturn and began experiencing problems with cash flow. This
meant they could not fulfil orders and, when the homes did not appear, some
customers who had already paid deposits or in-full started legal action.

18 Nov 2008: Still unable to fulfil orders, Mr Jayne decides to cease trading and makes
Breakaway Homes staff redundant

25 Nov 2008: Mr Jayne puts Breakaway Homes Ltd into administration and
Colin Ian Vickers and Ian Paul Sykes from Vantis Business Recovery
Services' Worthing office (contact details) are appointed as administrators.

27 Jan 2009: The administrators report that:

1. Breakaway Homes cannot be rescued as a going concern

2. They have invited creditors (i.e. anyone owed money) to send them information on
their claim. (AdviceCentre note: if you have been affected and haven't yet sent
Vantis details of your claim, take a look at Help! I'm owed money by a company
whose gone into administration and this template letter:)
3. They expect to get approx £2000 from the sale of Breakaway Homes' assets
4. Breakaway Spain Ltd still owes £1,469,002 to Breakaway Homes. Breakaway
Spain has put the land in Spain (it's main asset), on the market for 2 million Euros.
5. If the land sale is successful and therefore Breakaway Spain can pay the debt to
Breakaway Homes in full than, Breakaway Homes would have £1,471,002 to pay
creditors.
 6. Secured and preferred creditors (in this case Lloyds TSB and employees of
Breakaway Homes) are paid first. After they have been paid, there would be
£1,403,620-31 available to distribute amongst unsecured creditors, who include
those customers who paid deposits or in-full for orders which never came.
7. Breakaway Homes owes £2,242405-27 to unsecured creditors, almost half of which
(£1,020806) is owed to customers who paid deposits or in-full. Other unsecured
creditors include Mr Jayne himself (because he loaned Breakaway Homes nearly
half a million pounds as a directors loan), suppliers and the tax man. This means,
even with the sale of the land, Breakaway Homes is £838,784-96 short, meaning
customers can only expect a proportion of what they are owed.
8. Anyone with information on the conduct of John Jayne as director of Breakaway
Homes (or another company of which he has been a director) should pass the
information to them in a formal letter. (AdviceCentre note: The administrators ask
for this because when a company goes bust, by law they have to prepare a report
for a government unit who decide whether there is evidence that the director of the
company is unfit to be a company director. If they decide the director is unfit, they
can ban the individual from being a company director for between 2 and 15 years.
The rules on what makes a director unfit are specific and strict and therefore the
disqualification of directors is rare: guidance leaflet.

12 Feb 2009: The administrators hold a meeting to talk to creditors. The creditors agree
with the administrators' proposal to try to get as much as possible from
Breakaway Spain Ltd and then to put Breakaway Homes into voluntary
liquidation. As part of the liquidation process, if there is money available,
unsecured creditors, including customers, would be paid a dividend i.e. a
proportion of what they are owed.

12 Feb 2009: Five of the creditors volunteered to join a creditors committee to represent
the views of creditors (AdviceCentre note: From this point, the creditors
committee represents the rest of the creditors – i.e. the administrators will
ask them to agree to things, including their costs, on behalf of the rest of the
creditors and do not have to seek agreement from the rest of the creditors to
do things. If you want to contact someone on the committee, their names
and addresses are available from Companies House or alternatively simply
email advice@plebble.com – we would post them here but we don't want to
publish their personal addresses openly on the internet.).

Outlook

It all hinges on whether the sale of the land in Spain is successful. If it sells and for how
much will directly affect whether there is any money available to pay customers and if
there is, how much of what they are owed they can expect.

Given the slow pace of the current property market in Spain, it could be a long haul for
those waiting for some money.

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