§ Lord Lukeasked Her Majesty's Government:
Whether the New Millennium Experience Company was trading solvently on 2 August; and [HL3881]
Whether the New Millennium Experience Company was trading solvently on 4 September. [HL3884]
§ Lord Falconer of ThorotonWith the information made available to the board at 2 August the New Millennium Experience Company (NMEC) considered that it was trading solvently. On 3 August the Millennium Commission confirmed the offer of a further lottery grant of £43 million.
53WAThe PricewaterhouseCoopers report dated 22 August, which was commissioned by the NMEC board following confirmation of the further lottery grant, states that the company was at the time of the report technically insolvent. A copy of the PricewaterhouseCoopers report has now been placed in the Libraries of both Houses. The report states clearly that "the Company should seek to bridge the identified funding urgently". On receipt of this information, it was therefore the immediate responsibility of the board and its directors to seek to remedy the company's insolvent status.
The NMEC board, on the advice of its licensed insolvency practitioner, continued to trade whilst insolvent in accordance with the provisions of Section 214 of the 1986 Insolvency Act. This places a particular responsibility upon a board and its directors to continue to trade, even though they may be insolvent at that time, if there is a reasonable prospect that they may he able to introduce sufficient funds to correct the insolvency, and in doing so therefore eliminate any risk to creditors or other parties who would suffer in the event of a default.
On 5 September the Millennium Commission confirmed to the NM EC an additional lottery grant of £47 million. In securing this grant the board of NMEC and its directors therefore discharged their responsibilities under the provisions of Section 214 of the 1986 Insolvency Act.