Former staff of collapsed online agent House Network have been named as the preferential creditors – but how much they will get is open to question. It looks as though sellers who forked out money upfront will get nothing.

Meanwhile, mystery continues to surround why the firm that purchased online agent House Network out of administration ceased trading about a fortnight later.

United Acquisitions Ltd agreed to buy House Network from administrators Hudson Weir on March 29.

It paid £200,000 cash on completion and also took on repayment of the £1.5m bank charge which helped trigger the administration.

But, says Hudson Weir administrator Michelle Mills in a new report: “On 15 April 2019, I was advised that the purchaser had ceased to trade for reasons which I am unable to disclose.”

Mills’ report, on her proposals to creditors, confirms that UAL intends to refund customers who paid House Network after March 29 until cessation of trade.

Customers who paid for services before March 29 will be unsecured creditors in the administration – however, it looks as though they will get nothing.

Mills’ report says that “now that the purchaser has ceased to trade”, realising assets of House Network to make a distribution is the only reasonable objective.

At the time of valuation – the date is not given but was before Mills’ appointment on March 29 – assets included office equipment and furniture.

In addition, 19 customers were indebted to the company for the sum of £11,000, and House Network had entered into 200 no sale, no fee contracts with a potential value of £260,000.

The administrator’s report identifies the former employees who had not been paid wages or holiday pay as the preferential creditors.

The report says that at the time of Mills’ appointment, she was aware that 63 staff had either been made redundant or left the company due to non-payment of wages this year.

The report anticipates a distribution to preferential creditors, but says it is unlikely that there will be sufficient funds to enable a distribution to be made to others.

Currently Mills estimates that £27,623 will be available for preferential creditors, owed a total of £95,784 – meaning a shortfall of £68,161.

Mills says her own fees will double.

She was first consulted by House Network on February 27, when it was agreed that fees and expenses pre-appointment as administrator would be an estimated £15,000.

“However, the sale took considerably longer to negotiate than anticipated and a significant number of employee enquiries were received in the month we were instructed.

“Our time costs were therefore significantly over our estimate at £31,947.”

Her report lists 71 company creditors, with Varengold Bank owed most at £1.5m, followed by HMRC at £367,530, and Google Ireland at £246,552.

Other creditors include director and founder Mark Readings, at £152,970, and Rightmove at £41,637.

A detailed statement of affairs from House Network director Mark Readings, giving the company’s estimated financial position on March 29, was published yesterday.

Unsecured creditors seem to be owed £630,000, with net liabilities of £1.5m to preferential creditors.

It suggests that estimated total assets available for preferential creditors should realise £95,800, despite putting a book value on one asset, its software development, at just over £2m.

It also describes some of its debts in terms of ‘turnover’ – presumably what it paid over unspecified time limits: Google at £397,000, Rightmove at £274,000, and Viewber at over £35,000.

The statement of affairs also references 40 staff, likely to be the employees still in place at the end of March.

* Yesterday evening Viewber said it had held 25 sets of keys, 11 of which have already been returned. The outsourced viewings service is awaiting proof of ownership in just one case and said that everything was in hand.