December 5, 2006
Kroll, the Joint Administrators for the transfer of ownership of assets and closing down of operations of Imagestate, has filed a six-month report on their progress along with recommendations for further actions.
In the closing of Imagestate there were four separate companies - Imagestate pic, Imagestate (Europe) Ltd., Imagestate Holdings Ltd. and Convergence Holdings Ltd. - that were part of the Imagestate Group.
A sale of Pic's only asset, a number of royalty free photographic images, was completed on 15 May 2006 to Emerald Pix Limited, a wholly owned subsidiary of Getty Images, Inc. for $1.5 million (£795.334 pounds at a rate of £1:$1.886). Evidently, Imagestate Holdings and Convergence Holdings had no assets after 16 May 2006 so the only company left to deal with was Imagestate (Europe) which was the main trading entity of the Group.
The Joint Administrators then entered into an agreement with Heritage Image Partners to purchase the remaining holdings of Imagestate (Europe). The Executive Chairman of Heritage is Sheldon Marshall. The agreement transferred debts of approximately £438,000 of Imagestate receivables to Heritage Partners. Hertitage agreed to remit 50% of all monies realized and provided for £500,000 to be paid in three installments. The first installment of £200,000 was paid on the signing of the agreement on 16 May 2006. A £100,000 installment is due on February 16, 2007 and the remaining £200,000 is due on 16 May 2007. It is likely that the administration period will be extended by the secured creditor to allow all the collections to be made.
It is not clear whether any additional monies over and above the £500,000 were paid by Heritage Partners for control of Imagestate (Europe). The Joint Administrators say that it has now become clear that there is no prospect of future realizations from this entity. The Bank has been paid £500,000 to date and it is estimated that a further £108.374 will be payable in due course.
The Joint Administrators point out that any money received "will provide dividends to the secured creditor, Bank of Scotland." Any dividends recognized will be paid to the secured creditor, "and there will remain no property which might permit a distribution to its unsecured creditors." As a result the Joint Administrators are asking other creditors to agree to a dissolution of Imagestate (Europe) as there is no longer any chance of them being paid.
The bank is expected to receive approximately £968,850 which is less than the banks secured loan.
Photographers are unsecured creditors. Thus, any share of revenue collected that might have been due to them from sales made before May 16, 2006 will not be paid.