Co-Cars and Co-Bikes went bust leaving enormous debts

No caption
-Credit: (Image: No credit)


A car and cycle hire company that operates in Cornwall, which collapsed leaving creditors nearly £500,000 out of pocket, will have no funds to pay them, according to new documents filed at Companies House. Exeter-based Co-Cars, which ran e-bike and car-sharing schemes in Exeter, Plymouth, Falmouth and Truro for 2,500 customers, ceased trading in July 2023 and entered administration.

The documents reveal that Co-Cars Ltd is now set to be liquidated, leaving substantial debts behind. Despite administrators managing to raise thousands from the sale of cars and bikes, it won't be enough to cover the large sums owed to unsecured creditors.

A recent report from the administrators states they've received claims totalling £494,536 from 20 unsecured trade creditors. They've also been dealing with a "significant number " of correspondences from car membership and bike users, resulting in over 22,000 emails being sent.

Read Next: We kicked the first ball at Cornwall's 'breathtaking' new FA ground

Read Next: Cornish cove 'rubbish' because 'beach disappears at high tide'

Administrators at Taunton-based Milsted Langdon LLP confirmed there will be no money available to pay unsecured creditors. Joint administrator Richard Warwick stated in his report: "We have received claims totalling £494,536 from 20 creditors. In addition, we have received and dealt with correspondence from a significant number of car membership and bike user creditors following the society entering into administration, with in excess of 22,000 emails being sent in respect of these creditors."

"No charges were granted by the society and accordingly, there is no requirement to create a fund out of the society's net floating charge property for unsecured creditors. No distribution will be paid to the non-preferential unsecured creditors of the society", reports Devon Live.

Get the best stories and latest news delivered to your inbox every day. Choose what you want here.

Co-Cars Ltd was established as a mutual society and was subsequently registered with the Financial Conduct Authority. Trading from The Generator Hub near Exeter Quay and a unit at the Marsh Barton Trading Estate under the names Co-Cars, Co-Bikes and Co-Delivery.

The fleet comprised of 42 cars, consisting of 35 leased vehicles and eight owned outright, which the administrators auctioned off, racking up £36,333. Additionally, they possessed a variety of IT equipment, a stockpile of around 240 fleet bicycles, multiple cargo bikes, ample bike tools and spares as well as several spare parts pertaining to bike charging stations.

A desirable £26,784 was garnered through the sale of the fleet bikes, related spare parts and unassembled charging station components. In December, an auction concerning the IT equipment and cargo bikes lifted £6,800.

Administrators have been consistently liaising with more than 20 independent entities about agreements and their resolution regarding the 46 bike charging sites.

Recently published documents reveal that over the preceding six months, an additional £23,445 was produced through the disposal of further bikes and equipment, while a further £6,338 was obtained from 13 debtors. Existing book debts totalling £20,695 remain to be pursued; although, it is questionable whether any further amounts will eventually be recouped.

From the funds collected, a significant portion will go towards covering administrative costs and paying administrators. However, when the company is liquidated, a dividend will be issued to unsecured ordinary preferential creditors.

A claim of £919 has been lodged from the Department for Business, Energy and Industrial Strategy, one of the preferential creditors.

Co-Cars, which was established in 2005, fell into administration last year, blaming steep fuel prices and vehicle vandalism for making continued operation "impossible". Management also pointed out post-Covid shifts in travel behaviour, cost-of-living crisis, and decreased demand for business travel as reasons for their struggles.

An attempt to secure new investment in 2023 unfortunately didn't come through, leaving Co-Cars with no option but to cease trading.

During its operational years, Co-Cars had received substantial amounts of public money, including a £300,000 grant from Devon County Council for their e-bike scheme. The firm had also raised £600,000 from over 300 investors through a community share offer back in 2020.

In his recent report, Mr Warwick explained that, as of the time of the last progress report, administrators had been expecting to exit administration via company dissolution. He adds, "We have now concluded, however, that in order to finalise realisations, resolve outstanding matters and pay a distribution to the unsecured ordinary preferential creditors, it is more appropriate to exit to Creditors' Voluntary Liquidation, as allowed for in our approved proposals."