Background

Weardale Railway Community Interest Company (CIC) operated the 173-year-old Weardale Railway heritage line on 19 miles of track between Stanhope and Bishop Auckland in County Durham. The company’s American parent had become insolvent, and was unable to provide the financial support needed for the CIC to continue trading. It was able to fulfil its profitable Christmas train ride experiences, including its popular ‘Train to Christmas Town’, but ceased trading immediately afterwards as there were insufficient funds to pay ongoing expenses or historic debt.

Action

FRP was appointed as Administrators by the Directors of Weardale Railway CIC shortly after it ceased trading. Working closely with independent agents specialising in the sector, our Restructuring Advisory team marketed the business and assets, resulting in a successful sale to the secured creditor – a subsidiary company of The Auckland Project. The Project is a regeneration charity focusing on creating positive change for those living, working and visiting Bishop Auckland and the surrounding area.

Outcome

The team were able to negotiate a deal with the buyer which enabled the full settlement of the secured and preferential claims, as well as funds for a subsequent distribution to unsecured creditors. The deal also saved a number of jobs at Weardale CIC, and will ensure the heritage railway’s continued operation.

 “The Weardale Railway is part of the rich industrial heritage of Bishop Auckland, Shildon and Weardale, so The Auckland Project is delighted to be able to play a part in reinvigorating the line and all that it represents. Our thanks to our partners and the team at FRP for all of their hard work and support.” David Maddan, Chief Executive of The Auckland Project