Huboo’s Financial Position and the Impact on Creditors – Who Lost the Most?
Introduction
Huboo Technologies Limited (now Hub Realisations Limited Company number 09727464) entered administration on 23 December 2024, following years of widening financial losses and a failed attempt to secure last-minute funding. Despite raising £118 million in equity and taking on £20 million in secured debt, the company never achieved profitability.
With no solvent buyers, Huboo’s organisation(s) and assets were sold for just £9 in a pre-packaged administration sale to Brislington Tradeco Limited (backed by Baaj Capital Limited). This transaction allowed the organisation(s) to continue operating, but it left secured and unsecured creditors facing massive losses.
In this article, we’ll break down who was owed money, who got paid, and who suffered the biggest financial hit.
Huboo’s Debt at the Time of Administration
When Huboo collapsed, it owed millions to secured lenders, suppliers, landlords, HMRC, and employees.
| Creditor Type | crucial Creditors | Amount Owed (£) | Recovery Prospects |
|---|---|---|---|
| Secured Lenders | Kreos Capital VI, MIC Capital, Bibby Financial Services | £27.4 million | Partial / No recovery |
| Tax Authorities | HMRC | £2.1 million | Partial recovery |
| Trade Creditors & Suppliers | Various | £6.8 million | No recovery |
| Employees | Wages, Pension Contributions | £2.1 million | Partial recovery |
| Unsecured Loans | Various Investors | £790,991 | No recovery |
| Accruals & Miscellaneous Creditors | Various | £6.2 million | No recovery |
1. The Biggest Losers: Secured Creditors
(a) Kreos Capital VI (UK) Limited – £22.6 million lost
- Kreos Capital provided Huboo with £22.6 million in secured loans to fund growth.
- Kreos held fixed and floating charges over Huboo’s assets.
- Despite these securities, no funds were available to repay Kreos after the sale.
- Recovery: £0 (Full loss).
(b) MIC Capital Partners – £3 million lost
- MIC Capital was an equity investor that in addition provided convertible loan notes worth £3 million.
- Like Kreos, MIC held security over the company’s assets.
- Since the sale only realized £9, MIC will not recover anything.
- Recovery: £0 (Full loss).
(c) Bibby Financial Services – £1.8 million recovered
- Bibby provided an invoice discounting facility to Huboo, allowing the company to borrow against unpaid customer invoices.
- Because these book debts were excluded from the sale, the administrators are now collecting outstanding customer payments.
- Bibby is expected to recover most, if not all, of its money from these collections.
- Recovery: Likely Full Repayment (£1.8 million).
2. HMRC – The Tax Authority Won’t Get Fully Paid
- Huboo owed HMRC £2.1 million in unpaid VAT and payroll taxes.
- As a secondary preferential creditor, HMRC ranks ahead of trade creditors but behind secured lenders.
- The administrators have indicated that a small dividend will be paid to HMRC, but it is unlikely that the full amount will be recovered.
- Recovery: Partial Payment (Exact amount TBD).
3. Trade Creditors and Suppliers – Left with Nothing
- Huboo owed £6.8 million to suppliers, logistics partners, and landlords.
- As unsecured creditors, they are at the bottom of the repayment hierarchy.
- With no remaining assets after secured lenders are paid, trade creditors will receive no repayment.
- Recovery: £0 (Full loss).
4. Employees – Partial Recovery of Wages, Uncertain Pensions
(a) Unpaid Wages – Some Employees Went Unpaid for December
- Huboo employed 643 staff at the time of administration.
- Employees transferred under TUPE, meaning their jobs were protected.
- However, some staff did not receive their December wages before the administration.
- The new buyer did not assume responsibility for unpaid wages.
- As preferential creditors, employees are entitled to claim unpaid wages up to £800 from the government.
- Recovery: Partial (£800 per employee covered by the government).
(b) Pension Contributions – Still Uncertain
- Unpaid pension contributions remain unresolved.
- If no funds are available, employees may not receive full pension contributions.
- Recovery: Unclear, depends on asset recoveries.
5. Unsecured Investors – No Repayment Expected
Huboo had taken on unsecured loans totaling £790,991 and had over £6.2 million in accruals and other unsecured debts. These creditors rank below secured lenders, HMRC, and employees in repayment priority.
- Since there are no surplus funds, unsecured investors will receive no payments.
- Recovery: £0 (Full loss).
What Happens Next?
1. The Administrators’ Plan
Interpath Ltd, the appointed administrators, will now:
- Collect outstanding book debts to repay Bibby Financial Services.
- Determine if any surplus funds exist after secured creditor repayments.
- Distribute any remaining funds to HMRC and employees (if available).
- Close the administration and dissolve the company.
2. Legal Investigations
- The administrators will review financial transactions leading up to Huboo’s collapse.
- If any evidence of wrongdoing emerges, legal claims could be pursued against directors.
3. Potential Lawsuits from Creditors
- Kreos Capital, MIC Capital, and other lenders could challenge the administration process.
- Trade creditors may attempt legal action, but recovery prospects are low.
Lessons from Huboo’s Financial Collapse
1. Secured Lending Doesn’t Always Mean Recovery
- Despite holding fixed and floating charges, Kreos and MIC Capital lost millions.
- This case highlights the risks of lending to loss-making startups.
2. Trade Creditors Often Get Nothing in Insolvencies
- Suppliers and landlords are often left empty-handed in organisation(s) failures.
- organisation(s) must assess payment risks before offering credit terms.
3. Employees Should Always Monitor Pension Contributions
- Huboo’s staff transferred to a new owner, but pension contributions remain uncertain.
- Employees should regularly check contributions to avoid shortfalls.
4. The UK Insolvency System Favors Secured Creditors
- HMRC and lenders recover money first, while trade creditors and investors take full losses.
- organisation(s) should be cautious when extending credit without security.
Conclusion
Huboo Technologies’ collapse left millions in unpaid debts, with secured lenders, HMRC, and suppliers suffering the biggest losses. The pre-packaged administration sale allowed operations to continue, but creditors were left with little to no recovery.
This case highlights the risks of venture-backed startups that prioritize growth over profitability. As administrators finalize the process, many creditors will have to write off their losses.
The next article in this series will examine why the pre-packaged sale was chosen over alternative insolvency options. Stay tuned!
For ongoing improvement, focus on warehouse operations, parcel delivery, inventory management, and third‑party logistics to achieve consistent results.
