One of the companies behind travel tech firm Snowfall has gone into liquidation with debts of almost £10.5 million, leaving employees and companies in the travel space severely out of pocket. However, the overall organisation continues to operate as Junction following a rebrand and “full reset” last month.
Global Transport Solutions Limited (GTS), which was registered in the UK as Snowfall Services Limited until it was renamed in January, applied to enter liquidation on Thursday last week. The company issued a statement of affairs with Companies House outlining the parlous financial state of the company.
The statement reveals that GTS has a £10.5 million black hole, including more than £1.5 million owed to HMRC in unpaid tax and National Insurance contributions. Former UK-based employees of the company are owed more than £300,000 in wages and pension payments.
Among the other 87 creditors of GTS are the events company Terrapinn Holdings, which organises the World Aviation Festival, the GBTA and WeWork. Many of these creditors appear unlikely to get any of the money they are owed.
BTN Europe has reported regularly on the financial situation at Snowfall, including in January when employees rejected claims by Snowfall CEO Stefan Cars that the company was “back on track”.
In February, the company announced a relaunch under the new brand Junction, calling it a “full reset”. Snowfall operations in Canada and the United States are also understood to have been liquidated in recent months, according to several sources close to the matter.
GTS is one of a network of 17 companies currently listed by Companies House of which the founder and CEO of Snowfall, Stefan Cars, is a director. For most of those companies, Cars is listed as the sole employee and most are late in filing their accounts for the 2023/24 financial year.
GTS is entering what is known as creditors’ voluntary liquidation (CVL). The company appointed Richard Tonks and Kim Richards of BK Plus as joint liquidators on 27 February. In a CVL, the liquidator acts in the interest of the creditors not the directors.
Speaking to BTN Europe, Richard Tonks said, “According to the company's statement of affairs and other information provided by the company's directors, the company has relatively minimal physical assets and predominantly operated as a service company for associated parties.”
He added: “The company also ceased trading prior to our appointment as liquidators. Consequently, it appears unlikely that a buyer could be found and no active steps to market the company are being undertaken.”
A statement supplied to BTN Europe by Junction said that “the majority of the debt involved in the restructuring is intra-company, meaning it was owed between related entities rather than to external creditors”.
The biggest creditor to GTS is listed as Snowfall Limited, which is owed £7.2 million. That entity was set up in 2019 and Stefan Cars is its only director. It is not unlawful or unusual for companies to transfer assets between related companies and many do so.
According to insolvency specialists trade association R3, the liquidator will be “required to look at whether transfers in the run-up to the insolvency between companies in the same group or with common owners were carried out appropriately”.
Speaking to BTN Europe, Jonathan Wall, head of travel and partner at Xeinadin, the parent of Elman Wall Travel Accountants, said: “As part of the liquidation process, the conduct of the directors pre-liquidation are looked at and reports are submitted to HM’s Insolvency Service. Liquidations of these kinds are complex and fast moving but in most cases the parties involved will have sufficient evidence and legal documentation to support the transaction in accordance with UK insolvency legislation.”
Junction added in its statement that “as part of the restructuring… Junction is a new company with fresh funding and a proven strategy focused on the future rather than past structures. All existing clients have confirmed their trust in the business and new clients are coming on board.”
• BTN Europe also approached Junction investor Korelya for comment for this article but no response had been received at the time of publication.