Vertu liquidators set to repay staff and plug £500k pension gap

Liquidators of Vertu, the manufacturer of luxury mobiles, have recovered enough funds to pay the majority of employees’ preferential creditor claims – and replenish a large part of a £500,000 hole in their pensions.

Vertu’s jewel and gold-encrusted phones retailed at up to £145,000

Adam Harris and Kevin Goldfarb of the insolvency practice Griffins were last months appointed joint liquidators of Vertu, which sold luxury phones retailing at up to £145,000 each to the super-rich.

After a period in which Vertu’s sales plunged and debts spiraled, talks began for a pre-pack administration to save the business. After the negotiations broke down, Harris and Goldfarb were appointed on July 12.

Since their appointment the liquidators have been looking to maximise the value of Vertu’s assets to recover debts for creditors.

Among the creditors owed the biggest amounts were the 178 staff, who were left with £460,000 in unpaid wages at the time Vertu entered liquidation. Vertu also had a £519,000 deficit in its pension fund contributions and the company collapsed with total debts of around £40m.

The liquidators however raised more than £1.5m in cash during August by selling the company’s assets through an auction with Kent-based GJ Wisdom & Co.

Harris, a partner at Griffins, said: “The successful auction of the company’s assets raised in excess of £1.5m which not only ensures that a significant proportion of the former employees’ preferential claims can be satisfied but also reimburses the National Insurance Fund to the extent that it has covered these liabilities.”

The National Insurance Fund pays out to staff who claim for unpaid wages and other related liabilities when their employer enters insolvency and in the case of Vertu, is set to be reimbursed by the liquidators.

Now the liquidators will look into the conduct of the former owners and directors.

Harris added: “We shall now continue our investigation into the reasons behind the demise of the company.”

Since taking over the company’s affairs, the liquidators have discovered that staff pension contributions were deducted from salaries but not paid over to the pension providers since March this year.

Before liquidation, the company was under the control of Turkish tycoon Hakan Murat Uzan.

Uzan acquired the company from Hong Kong-based Godin Holdings, which had previously acquired Vertu in 2015, from the private equity group EQT.

Vertu’s range of high-end handsets was made with alligator skin, sapphire crystal screens and ruby touch keys. Prices for the mobiles ranged from £11,000 to its premium model; the Signature Clous de Paris Red Gold, which featured 18 karats red gold along with black sapphire keys, and a £39,100 price tag.

The most expensive Vertu phone was sold for around £300,000 to a Chinese buyer.

luxury phone manufacturer Vertu is auctioning its $20,000 phones for cheap

Most people never owned a Vertu handset the cheapest models typically cost several thousand, making them exclusively the preserve of the ultra-wealthy. The Vertu replica signature Touch, for example, started at 7,500 (roughly $10,000).

Amusingly, in 2014, Vertu launched a budget line. The Vertu Aster cost just 4,500 (roughly $6,000). While significantly cheaper than its stablemates, it was way more expensive than anything the average smartphone buyer could afford.

But now, with the company’s assets on the auction block, you can pick up a Vertu phone for a (relative) bargain. One of its Signature brand feature phones, which comes encased in 18 karat gold and black alligator leather and originally retailed for 14,700 ($19,000), currently has bids in the 1,150 mark ($1,500).

The liquidators have also listed the company’s phone museum, which contains 105 iconic Vertu phones from the company’s long history. Some of these are concept devices, while others are fully-working models. The opening bid for this is 20,000 ($26,000).

Other collectibles under the hammer are a little more left-field.

The most unusual thing I found in the auction is a large bronze statue of a horse-mounted soldier, holding the Vertu copy logo like a weapon. At the time of writing, the current bid for that is 775 (roughly $1,000).

It’s a staggering fall from grace for Vertu. This was a brand that once saw its phones flogged in the most extravagant of boutiques, like London’s Harrods. Now its assets are sold to the highest bidder at an online auction for a fraction of their retail cost.

I feel sad for them. As a Brit, it’s bitterly sad to see our only domestic phone manufacturer collapse in such a way. And most of all, I’m sad for the nearly 200 people who have lost their jobs.

If you want to get yourself a piece of tech history, hurry: depending on the item, bidding concludes either today or tomorrow.

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Luxury smartphone maker Vertu rumor is going to close

Vertu phone, the British firm that manufactures luxury vertu smartphone costing up to $52,000, is closing down. The news comes just four months after the company was purchased by businessman Murat Hakan Uzan, who was unable to save it from bankruptcy.

Vertu has been struggling for some time as the world’s wealthiest ditch luxury handsets coated in diamonds, gold, and alligator skin in favor of the iPhone. It has been sold and re-sold by a number of investment firms in recent years before ending up in the hands of Uzan, an exiled Turkish entrepreneur, back in March.

Uzan offered 1.9 million (approx. $2.4 million) to settle Vertu’s 128 million debt and rescue it from bankruptcy, but that wasn’t enough to appease the company’s creditors. As a result, Vertu’s manufacturing arm is closing down, but Uzan will retain its brand, technology, and design licenses.

Uzan invested $40 million in Chinese manufacturer TCL Communication just last month. The deal would have allowed Vertu to use TCL technologies in future smartphones. According to a report from The Financial Times, sources familiar with Uzan’s plans say he intends to resurrect the company and deliver more Vertu handsets in the future.

Sadly, this means the Vertu staff based at its manufacturing facility in Hampshire are now out of a job. The company has also suspended its concierge service, which gave Vertu handset owners 24-hour support but it promises that it’s coming back later this year.

We have taken the difficult decision to suspend our current Vertu services and focus on developing a completely new, next generation suite of services, exclusively for our customers, reads a notice on its website. We plan to launch these new services from September 2017 and update this page closer to the launch with further information. vertu signature touch is the latest model of vertu mobile.