30 May 2023 , 10:06
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Kate Middleton’s parents have left the taxpayer out of pocket after their children’s party business went under.
Caroline and Michael Middleton took out a Covid loan for their business Party Pieces, that was originally established in 1987.
But the business has collapsed this month, and now will leave the taxpayer out of pocket.
The Times reported that the bank is owed £220,000, according to documents.
However under the terms of the government’s Covid business interruption loan scheme, the public is liable to pay 80 per cent of any amount owed to NatWest which would be £176,000.
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Party Pieces has now reportedly been sold through a pre-pack administration deal to entrepreneur James Sinclair for £180,000.
Kate and her mum pictured back in 2011 (WireImage)
Caroline Middleton and Michael Middleton ran the children's party business (Getty Images)Under a pre-pack administration, a prospective buyer agrees to buy an insolvent company provided it goes into administration first. This enables the buyer to come to an arrangement with creditors, who may receive less than they are owed, without the company having to be liquidated.
The sale proceeds won’t be enough to pay off the loan in full.
The business was initially run from the family’s four-bed home in Bradfield, Berkshire, but after it ran into difficulties it was sold to Mr Sinclair’s company Teddy Tastic Bear Company.
The Telegraph reported that as the company tried to expand into America it struck a deal with US supermarket chain Saker ShopRite, but the move failed to turn the firm’s fortunes around.
The Princess of Wales during the Coronation of King Charles III (Dan Charity/AP/REX/Shutterstock)
William and Kate during a visit to Wales in February this year (Getty Images)Carole stepped back from the day-to-day running of the business in 2019 but became a brand ambassador for the business and director too.
Then, this year she returned to help secure the company’s future.
Carole previously wrote: "In January 1987, when I was 6 months pregnant, I decided to take myself off to the Spring Fair in Birmingham where I found a good selection of suppliers.
“From there the idea evolved. I produced a little flyer which I circulated in local playgroups and very soon I was using our garden shed as a picking/packing room and office."
The Times reported that revenues plummeted from £4.5million to £3.2million in 2022, and the company made a net loss of £900,000 before tax.
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The outlet added that in a report for creditors, the administrators said: “Management attributed this to the Covid-19 pandemic resulting in reduced social gatherings and a reduction in discretionary spend due to the cost-of-living crisis. This caused constraints on the company’s cash flows.
“The company was both loss-making and under creditor pressure. In the absence of new funding or a solvent sale, the company was insolvent on a balance sheet and cash flow basis. The existing investors of the company had injected ad hoc funds to meet critical payments and no further funds were available from this source.”
The Mirror has approached Party Pieces for comment.