Friend’s Legacy Poured into Brogdale Horticultural Trust’s Loss Making Subsidiary

Brogdale Horticultural Trust’s conduct continues to astonish. It receives nearly £400,000 as a bequest from a Friend and tells no one. In its accounts, for the year ending 28 February 2007, the Trust says that it ‘will be making arrangements to recognise this generosity appropriately’. So what appropriate memorial to the Friend’s generosity is to be established to benefit the charity’s objects? The donor and Friends might have thought that something permanent and long lasting for the National Fruit Collection would be appropriate. This could have been to buy land at Brogdale on which the National Fruit Collection is grown, after all the Trust’s net assets prior to the £400,000 legacy was only £30,000.

Unbelievably the trustees decided that the best thing to do with £175,000 was to immediately contribute it to its insolvent subsidiary Brogdale Orchards Limited. Yes this is the same Brogdale Orchards that had a County Court Judgement for non-payment of a £36,762 tax bill despite having received this £175,000 cash contribution.

What is even more remarkable is that even after receiving the £175,000 Brogdale Orchards could only report a small surplus for the year of £34,527 and it was still left with a balance sheet deficit at the end of 2007 of £(182,154). Readers will, of course, also appreciate that without the £175,000 legacy contribution Brogdale Orchards would have reported a massive loss for the year of £(140,835) and a deficit of £(357,416).

Losses at Brogdale Orchards have been reported from 1999 onwards but the 2007 position is extraordinary. Creditors of Brogdale Orchards including HM Revenue and Customs whose £36,762 tax bill was unpaid, until a County Court Judgement was served, will note that although their debts remain outstanding the Trust’s debt of £109,185 was repaid. Creditors could be forgiven for thinking that the Trust’s debt is given precedence and preference over other creditors’ debts.

Clearly the trustees believe that this contribution is the best way to use charitable monies from such a large legacy. However the contribution has all the appearance of being self-serving. Best practice and others might question whether this is the best use of charitable money.

Friends might wish to take this up with the Trust especially as at the Friends’ Special and Annual General Meetings in April 2007, the trustees appear to have decided to withhold this information from the Friends despite questions about its financial position.

Robert White