GUY NAGGAR and Peter Klimt are unlikely to be sailing to warmer climes this winter to escape the fallout from the recent collapse of Dawnay Day, the company they founded.

Administrators to the failed financial services and property conglomerate are about to seize two luxury Mangusta yachts bought with company money. The vessels, moored in the south of France and Croatia, were often used to entertain clients of the two businessmen, whose taste for the finer things in life is well known.

One of the boats is a 108ft cruiser that can cost more than €10m (£8m) and the other is an 80ft boat usually priced between €2m and €5m.

Later this month, two art-works will be auctioned by administrators BDO Stoy Hayward at Sotheby’s to raise cash to pay creditors. Jenny Saville’s Rosetta 2 has a guide price of between £350,000 and £450,000, while a Damien Hirst montage of dead butterflies is priced between £250,000 and £350,000.

Administrators investigating the collapse of the company have discovered money set aside to pay monthly rent was used to pay margin calls on several investments that had been taken on movements in public-share prices. The company collapsed when the value of these dropped sharply.

Its main creditor, Norwich Union, which is thought to have lent the firm in the region of £650m, became aware that Naggar and Klimt were struggling for cash and decided to call in the administrators to protect its loans, which were secured against Dawnay Day’s sprawling property portfolio.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts