Case Study: Coventry City of Culture Trust administration
Coventry’s year as the UK City of Culture was run by Coventry City of Culture Trust, a registered charity and company limited by guarantee.
The trust had planned a three-year legacy arts and culture programme to ensure a long-lasting benefit for the local community, including The Reel Store digital art gallery, and received government funding as well as a number of grants to support the its activities.
The trust experienced difficulties as Covid negatively impacted income from events and sponsorship from businesses. By February 2023 it was apparent that there was insufficient income to pay ongoing expenses. The trust was placed into administration, with Mike Kienlen and Daryl Warwick, Restructuring and Insolvency Partners of Armstrong Watson, appointed as joint administrators.
The administrators used Armstrong Watson’s specialist Forensic Accounting team to carry out aspects of the investigation work required into the investigation of the trust’s failure. The administrators also worked with the National Audit Office and the Charity Commission to provide information to assist them with their own independent investigations into the Company's affairs.
Many trustees act with the best intentions, however it is important to understand that the duties and responsibilities of trustees are the same of those as a company director. In an insolvency process the actions of the trustees are considered in the same way a director’s actions are. Bearing that in mind, knowing when to ask for support and advice is essential.
