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GoodBox Dodges Administration With Surprising Court Ruling

Troubled UK fintech put back on its feet by a landmark court ruling in Leeds. 

The administration of the UK fintech company, The GoodBox Co., has taken a turn for the better with the recent court sanctioning of a Part 26a scheme.

The company has battled a series of vexes and woes since announcing its administration back in June 2022.

The premise of GoodBox is based on charity accessibility. In this way, its technology enables charitable donations at speed and through the most convenient means possible.

Since its founding back in 2016, the company has collaborated with numerous distinguished charities and museums, receiving various accolades and awards for its payment device hardware along the way.

Success turned sour

Despite its demonstrated applicability and £9million funding round, GoodBox, like so many other fintechs operating in the charity space, failed to produce a profit.

The company ultimately announced its administration in June 2022 as its financial troubles took their toll.

Jeremy Frost and Patrick Wadsted of Frost Group Ltd were subsequently appointed as joint administrators around this time.

The duo actively pursued multiple avenues in their attempts to save the brand’s future. Given the number of entities reliant on the company’s services for donations, Frost and Wadsted saw through the processing of donations in parallel with the company’s administration.

Since their appointment, the joint administration has managed to process near to £4.5million in donations, minimising the wider impact of the company’s own financial issues.

Court ruling

The administration originally banked the company’s survival on part 26a scheme of the Companies Act 2006 coming into play.

Such a scheme would allow GoodBox to arrange a compromise plan with its creditors to alleviate existing debts through a company restructuring plan. The plan must obtain approval from three-quarters of voting creditors and the court to become legally binding.

Although similar to a ‘scheme of arrangement’ procedure, part 26a leverages a mechanism that enables the court to override dissenting voters and trigger an appropriate restructuring plan for the participating company.

The case came to a head on 16 January this year, when Leed’s Business and Property Court sanctioned GoodBox with a part 26a scheme.

The scheme will convert the company’s debt into shares while retaining equity interest for its shareholders and trade creditors.

The proposed restructuring details independent scheme administrators, 18 angel investors and the appointment of a new, independent board of directors.

The court’s sanctioning of the scheme ultimately brings the administration to a close, as GoodBox seizes a new and reliable lifeline for returning to its feet.

The impossible becomes possible

Frost and Wadsted admit that the court’s ruling has arrived as a slight surprise. Nor did they expect it to come to fruition, especially in light of the scheme’s limited application outside of London.

Their doubts were so clear in fact, that the pair conducted a sales process prior to the ruling in an attempt to save both jobs and customers.

Goodbox administration
Jeremy Frost, director, Frost Group Ltd

“We send our best wishes to the team at GoodBox Co and are hopeful that they can get back to being the essential part of the charitable industry that it once was,” Frost comments.

He says that despite the company’s plans for a funded future, “considerable uncertainty” remains along with many unanswered questions.

“It is very sad that these uncertainties, brought into sharp focus whilst acting as administrator were not addressed in the scheme, a position so serious that it did not allow us to take anything other than a neutral stance.”

According to Frost, only time will tell if these uncertainties can be resolved.

Author

  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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