Why are Carzam liquidators still tracing vehicles four years after administration?

Background to Carzam’s administration

Carzam, an online used‑car retailer, entered administration in June 2022. Since then, joint liquidators have been tasked with untangling the company's financial affairs and determining how any remaining assets can be distributed to creditors.

The latest Companies House filings reveal that the liquidation process is still far from finished, largely because the liquidators are still probing vehicle transfers that took place around the time of the administration.

Ongoing vehicle tracing investigation

One of the most time‑consuming elements of the investigation is tracing the ownership history of cars sold by Carzam shortly before it ceased trading. Using DVLA records, the liquidators have obtained ownership details for a sample of vehicles, contacted current owners and worked backwards to map each change of ownership.

The purpose of this deep dive is to gain "greater clarity on the transfer of value" linked to those vehicles. The liquidators have also written to a related party – believed to have been involved in the transfers – and are awaiting a response that could help them draw further conclusions.

These enquiries are ongoing. The liquidators continue to correspond with third parties and the related party as they seek to finalise the vehicle investigation, a step that could be pivotal for the distribution owed to creditors.

Impact on creditors and potential dividends

Unsecured creditors have lodged claims totalling £19.73 million across 173 individual filings. However, there are currently insufficient funds to make any distribution. The liquidation report notes that any future dividend will depend on the outcome of the vehicle tracing work and the settlement of preferential creditor claims.

In addition to the unsecured claims, the liquidators have identified a VAT receivable of £40,586, which they expect to recover from HMRC. Further recoverable VAT may also be reclaimed, potentially adding modestly to the pool available for creditors.

Outstanding steps before the liquidation can close

The liquidators outline several remaining tasks before they can issue a final report and close the liquidation:

• Concluding the vehicle investigation and establishing the net value of the traced assets.
• Settling all HMRC liabilities, including the identified VAT receivable.
• Finalising any claims from preferential creditors.
• Calculating and paying any dividend that may arise from the completed investigations.

Only when these matters are resolved can the liquidators complete the winding‑up of Carzam’s affairs.

What does this mean for creditors?

For unsecured creditors, the ongoing vehicle tracing could prove crucial. If the liquidators can recover the value of transferred cars, the asset base from which to pay creditors will increase, potentially leading to a larger dividend than currently anticipated.

Until the investigations are finalised, however, creditors should expect no immediate payments and must remain patient as the liquidation proceeds at a methodical pace.

For more industry updates, consider joining our breaking news WhatsApp group, signing up for daily dealer bulletins, or listening to the latest Car Dealer Podcast.

The post Carzam liquidators still tracing vehicles four years later as £20m creditor bill remains unpaid appeared first on Car Dealer Magazine.