PPE Medpro wound up after being ordered to pay £148m to Government
The decision could mean that the Government is unlikely to see most of the £148 million owed to it by the company.
PPE Medpro, the company linked to Baroness Michelle Mone, has been wound up at a specialist companies court.
The decision, made by a judge at a hearing on Thursday, could mean that the Government is unlikely to see most of the £148 million owed to it by the company after it was found to have breached a contract to supply 25 million surgical gowns during the coronavirus pandemic.
PPE Medpro, a consortium led by Lady Mone’s husband, businessman Doug Barrowman, had been ordered to pay the sum after losing a High Court battle against the Department for Health and Social Care (DHSC) in October.
But it filed for administration on September 30, the day before the ruling, with the money still unpaid.
At a hearing at the Insolvency and Companies Court on Thursday, barristers for the three joint administrators asked for PPE Medpro to be kept in administration to pay off some creditors.
Barristers for the DHSC, an unsecured creditor, asked a judge to wind up the company, which they said was “hopelessly insolvent”.
In a ruling, Insolvency and Companies Court Judge Sebastian Prentis placed the company into liquidation.
He said: “The department’s debt is very large indeed and it is a debt which has been incurred through the supply of defective equipment at a time of national crisis.”
He continued that there “will be questions of how this debt may be recovered”, adding that there was “very little” money that PPE Medpro had received left.
He concluded: “I remain of the firm view that the correct course is now to discharge the administrators and to compulsorily wind up the company.”
Records filed by PPE Medpro’s administrators last month showed that, as well as the money owed to the DHSC, HM Revenue and Customs was also claiming £39 million in tax from the company.
But the filings revealed it only had around £600,000 available to pay unsecured creditors.
Simon Passfield KC, for PPE Medpro’s joint administrators, said in written submissions that the company had one secured creditor, Angelo (PTC) Limited, which, according to Companies House, is registered in the Isle of Man.
He continued that the DHSC was the firm’s largest unsecured creditor.
In court, the barrister said that PPE Medpro had “sufficient property” to pay off a debt of around £1 million to Angelo, and that the administrators believed there would “also be a return to the unsecured creditors”, including the DHSC.
Mr Passfield continued that there were “potential” legal claims by the company against “third parties”, which, if successful, “could result in substantial recoveries” of funds, but no further details were given in court.
He said: “The administrators are as best placed as any liquidator to achieve the best outcome for creditors as a whole.”
David Mohyuddin KC, for the DHSC, said in written submissions that there was no “realistic alternative” to winding up the company.
He said: “The only order that the court needs to, and should, make is that Medpro be wound up.”
He continued: “The court’s discretionary power to make a winding-up order against Medpro is clearly engaged: it is obviously and very significantly insolvent.”
PPE Medpro was established on May 12 2020, and the same day was referred by Lady Mone to the “high priority lane”, which managed PPE referrals from MPs, ministers and senior officials.
It was sued by the DHSC in 2022, with the department claiming at a trial earlier this year that the company had breached a deal for the gowns as they were “faulty” by not being sterile.
The company opposed the challenge, claiming it had been “singled out for unfair treatment” and that the Government had “buyer’s remorse”, with Lady Mone and Mr Barrowman separately denying wrongdoing.
On October 1, Lady Justice Cockerill ruled that the gowns “were not, contractually speaking, sterile”, which meant they could not be used in the NHS.
She ordered the company to pay back £121,999,219.20, as well as interest totalling around £23.6 million and legal costs, by October 15, a deadline which was not met.
Interest has been accruing at a rate of 8% a year since October 16.
After the deadline passed, Health Secretary Wes Streeting said the Government would “pursue PPE Medpro with everything we’ve got to get these funds back where they belong – in our NHS”.
Lady Mone, who created the lingerie brand Ultimo, was made a Conservative peer by David Cameron in 2015, but the Parliament website currently states she is on a “leave of absence” after having the Tory whip suspended.
She has previously said on X that the Government had made her and Mr Barrowman the “poster couple for the PPE scandal” and claimed it had turned down multimillion-pound offers to settle the case.
