New documents reveal last chaotic days of Paragon Interiors

Paragon Interiors collapsed into administration after an audit carried out by its invoice finance funder Bibby found that sub-contractors were refusing to carry out work for the company over a stalled contract.

Certain assets of the company, which was owned by Alan Hardy, have since been sold to London firm Elev8, which has said it is re-forming Paragon under the guidance of John Rigby, the company’s former chief operating officer.

However, newly published documents show the turmoil behind the scenes at Paragon earlier this year.

On 20 February, a meeting was held between business advisory firm Leonard Curtis, Paragon Interiors and Bibby. During the meeting it was disclosed that Paragon was insolvent and had been seeking advice from Smith Cooper about placing the company into administration. Smith Cooper was set to market the company from 22 February with the aim of selling Paragon, potentially via a pre-pack deal. Some 53 expressions of interest were recorded after Leonard Curtis also began to market the business, with a deadline of 12pm on 1 March for offers from interested parties.

However, on 20 February, a Winding Up Petition was filed against Paragon by a trade creditor which was owed around £99,000. On 25 February, Paragon emailed all employees to tell them they wouldn’t be paid wages for February that were due on 28.

Bibby then took steps to appoint administrators from Leonard Curtis to “protect its own position”. Bibby has since been paid the £352,000 it was owed in full.

An administrators report says that a deal to buy the company fell through on 12 March. All of Paragon’s 90 staff were made redundant on 13 March, but administrators say they anticipate they be paid in full.

The administrators then went back to Elev8, the company which provided a revised offer of £313,000 for the book debts of Paragon, the intellectual property, goodwill and records.

In total, Paragon Interiors went into administration owing £13.5m to creditors. Administrators from Leonard Curtis say they were continuing their investigations into any “potential actions’ against the directors of Paragon Interiors. A statement from Leonard Curtis said: “These investigations are on-going, and will be reported on in due course.

Administrator Leonard Curtis says a dividend could be paid to unsecured creditors “based on the information currently available”.