PPE Medpro, the company linked to Baroness Michelle Mone, has been wound up after a court ruling that makes it unlikely the government will recover most of the £148 million owed over a failed pandemic PPE contract.
The Insolvency and Companies Court ordered the company into liquidation on Thursday, just months after it lost a High Court battle with the Department of Health and Social Care (DHSC) over the supply of 25 million surgical gowns during the Covid-19 crisis.
The ruling follows PPE Medpro’s decision to file for administration on 30 September — just one day before the High Court ordered it to repay the £148 million. The firm was a consortium led by Doug Barrowman, Lady Mone’s husband, and had been awarded government contracts during the pandemic.
At Thursday’s hearing, lawyers acting for the joint administrators argued that the company should remain in administration in order to pay some creditors. However, Insolvency and Companies Court Judge Sebastian Prentis rejected that approach and ordered the company to be compulsorily wound up.
“I remain of the firm view that the correct course is now to discharge the administrators and to compulsorily wind up the company,” the judge said.
Court filings revealed that PPE Medpro’s liabilities extend well beyond the DHSC judgment. HM Revenue & Customs is also pursuing the company for £39 million in unpaid tax, while the administrators reported that only around £600,000 was available to meet unsecured creditor claims.
Simon Passfield KC, representing the joint administrators, told the court that PPE Medpro had one secured creditor, Angelo (PTC) Limited, registered in the Isle of Man. He said the administrators believed there was enough property within the business to repay around £1 million owed to that creditor and suggested there could still be a return for unsecured creditors, including the DHSC.
Passfield also told the court that there were potential legal claims against third parties which, if successful, could result in “substantial recoveries”, although no further details were disclosed.
However, the DHSC made clear it supported liquidation. David Mohyuddin KC, acting for the department, said there was no realistic alternative given the company’s financial position.
“The court’s discretionary power to make a winding-up order against Medpro is clearly engaged: it is obviously and very significantly insolvent,” he said.
Legal experts said the decision leaves the government facing an uphill battle to recover taxpayer funds. James Robertson, a dispute resolution partner at Spector Constant & Williams, said recovery may depend on whether the government is prepared to fund further legal action against the company’s directors or its ultimate beneficial owner.
“Piercing the corporate veil and going after such individuals is notoriously difficult, especially where assets may not be held in this jurisdiction,” he said, adding that the case risked becoming a “pyrrhic victory” for the government.
Robertson also noted that the liquidation could increase pressure on the National Crime Agency’s long-running investigation into PPE Medpro and its principals, raising hopes that at least some public money could ultimately be recovered.
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Michelle Mone-linked PPE Medpro wound up after being ordered to repay £148m