The full scale of the debts owed by the company which operated the crisis-hit South Links Holiday Park in Montrose has been revealed.
Angus Council is owed more than £400,000 and is the largest creditor of Wow Leisure Ltd, which administrators assess have debts of more than £1.6 million.
Most of the council’s debt is due to a £275,000 loan to the company which, it has now emerged, was approved in private at a meeting of the full council in December 2011.
The £409,486 total also includes missed rent payments on the council owned site, interest charges and legal expenses.
The council is still pursuing the debt, but it is understood officials have acknowledged the council is unlikely to ever see the vast majority, or any, of the six-figure sum it is owed.
The £275,000 loan to the company was secured with a ‘floating charge’ over all the company’s assets.
This gave the council the legal right to call in administrators Begbies Traynor in August.
The council will not explain the reasons behind the loan, which was made at the time of the previous Angus Alliance administration, because of “commercial confidentiality”.
However, Wow Leisure’s director and single shareholder Bill McDonald has previously given a statement to The Courier regarding the issue.
He stated he was approached by Angus Council shortly after his company signed the lease and informed that GlaxoSmithKline were interested in expanding their Montrose site.
He claimed he was asked to curtail Wow Leisure’s trading at the site and that rent was waived for a period while the council and Glaxo were in talks.
He added: “Angus Council also provided the company with financial assistance by way of an unsecured loan to the company during this period.”
Legal proceedings between the firm and Angus Council began this year.
Mr McDonald claimed he had vowed to repay the sums due over a “reasonable period of time” and that he would personally guarantee the debt.
However, the council decided to end the discussions and call the administrators in.
According to their creditor’s report Begbies Traynor has so far recovered just £2,300 from a company bank account as it continues its investigations.
They have provisionally found £1,661,133 of debt.
Other creditors include Carnaby Caravans Ltd (£54,000), New Lauriston Caravan Park Limited (£213,073), Omar Park Homes Ltd (£123,735) and Statley Albion (£359,636).
Another major creditor is Bill McDonald who is owed £312,589.
A statement from Begbies Traynor said: “At this stage the exact details of the creditor situation are still unclear, although Angus Council is the secured and largest creditor.”