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U.K.’s Discovery Yachts goes into administration

DiscoveryYachts

British newspaper The Times reported that hundreds of crowd-funders who invested an aggregate of $2.9 million (2.2 million pounds) into British builder Discovery Yachts could be in danger of losing their money since the company has entered administration, a form of bankruptcy protection in the United Kingdom. The Southampton-based sailboat builder and charter operator said it plans to appoint insolvency experts.

Managing director Sean Langdon said Discovery filed the notice to protect itself from a lawsuit brought by a customer of a boatbuilder it bought in 2017. The move would affect only the holding company, Langdon told the paper. Employees and customers would be unaffected. The paper reported that the investments of the crowd-funder could be at risk.

In February, 401 people took a 22 percent stake in Discovery after backing the fundraising on Crowdcube.

Crowdcube says it delivers a “democratization of finance” by giving ordinary investors access to fast-growing private companies. But The Times points out that smaller investors can be left without financial equity if a company collapses, since they rank below other investors.

On Nov. 15, another investor, Werner Schnaebele, took security over the company’s assets by way of a floating charge.

Langdon told the paper that Discovery Yachts was in negotiations with an investor who could rescue the company. He said that a decision would happen before Christmas. “The order book is looking promising,” he said.

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