2 Sisters was making claim against pie firm when it collapsed
WEST Midlands food business 2 Sisters was making a legal claim of £1.75m against Poole’s Pies when it was placed in administration by owner Dave Whelan, it has emerged.
The claim, brought by 2 Sisters’ subsidiaries Northern Foods and FW Farnworth, relates to alleged theft of recipes and the appointment of its staff by Poole’s, and other individual defendants, administrators said.
The claim arose after Neil Court-Johnson, who used to work for Northern Foods as MD of its Hollands Pies brand, took over as boss of Poole’s in 2012.
A report by joint administrator Gary Corbett of Milner Boardman & Partners reveals that the business assets of the Wigan-based company were acquired by Leeds-based Country Style Foods, part of Midland Bakery, in a pre-pack deal for around £3m. The sale saved all 60 jobs.
Former owner Dave Whelan, who invested heavily in the business in terms of its production equipment, was owed around £6m by Poole’s when he appointed administrators after refusing to inject further funds.
Other creditors, including HMRC and suppliers, were owed around £1.5m, Corbett told TheBusinessDesk.com.
The business had been loss-making for some time. After losing a significant customer, sales fell from £4.2m in 2011 to £3.3m in the year to the end of May 2012. Losses rocketed in the same period from £686,000 to £2.7m.
Corbett said: “The sale of the business saved 60 jobs and supply to customers was also preserved, which I think are the key aspects.
“There are a number of matters which I am still looking in to, but I am hopeful there will be a small dividend to unsecured creditors.”
Asked about the legal situation, Corbett said: “I have met the representatives of the claimants and we are discussing the next steps as I understand they are still pursuing several other individuals as well as Poole’s.”
