Parents who lost thousands of pounds when a children’s nursery suddenly closed are celebrating after winning a legal fight with an insolvency firm.
Forty-six parents have received 75% of the fees they paid to Clayton West Day Care just before it went bust last year.
Begbies Traynor was appointed liquidator after the nursery, in Edan Court, Colliers Way, Clayton West , closed at the end of October.
Dozens of parents, who paid for their children’s care a month in advance, were furious at the timing of the closure. They had paid November’s fees towards the end of October, just before the nursery shut, and many were out of pocket to the tune of hundreds of pounds. Between them, their fees came to many thousands.
In the months leading up to the closure, the company running the nursery – Walker Day Care Nurseries – had brought in advisers from Begbies Traynor to attempt a rescue of the business via a Corporate Voluntary Arrangement (CVA).
The parents claim Begbies should have notified all known creditors of the meetings called to vote on the CVA proposal, but the parents who paid deposits in advance were not told.
They were unaware of the impending insolvency proceedings, and continued to pay further deposits which were lost when the company ceased trading on October 30. It went into liquidation on November 4.
The parents were then advised by the liquidators that there was very little prospect of recovering any of the money they had prepaid to the nursery.
But the parents launched a legal fight and Begbies Traynor has now settled out of court, and will pay 75% of the claims.
One parent, who asked to be identified only as Claire, who had a two-year-old child at the nursery, said: “It was heartbreaking when the nursery suddenly closed, and hugely stressful to find alternative childcare at short notice. But to discover that our deposit losses were avoidable made us very angry.
“If we had received the notice, to which we believe we were legally entitled, there is no way that we would have continued to pour money into the failing company.”
And a spokesman for the group said: “Whilst most of the affected parents joined in the collective action and have received 75% of their claim in an out of court settlement, there are some parents whom we believe are affected but whom we have been unable to contact.
“To ensure they get the same justice we have achieved, if there are others who have been affected, we urge them to come forward.”
A new, unconnected company, Excel Childcare, bought equipment from liquidators Begbies Traynor and signed a new lease with the landlords to take over the premises.
The new nursery opened on Tuesday and hopes to take on former staff as it grows.
A spokesman for Begbies Traynor said: “Begbies Traynor maintains that whilst a technical breach of the relevant insolvency legislation was accepted, this did not result in Begbies Traynor or its insolvency practitioners having a financial liability to the relevant parents.
“The settlement proposed by Begbies Traynor, and concluded with the relevant parents, was a goodwill gesture and was made without any legal liability.”