Connaught, Rok and taxman blamed for Malbern’s demise
THE CHAIRMAN of windows and doors firm Malbern blamed the collapse of social housing contractors Rok Group and Connaught for his company’s slide into administration with the loss of 80 jobs.
Stuart Kenyon said that Malbern Windows & Doors had been trading successfully until both Connaught and Rok were placed into administration within weeks of each other in September. The failure of both firms left Malbern with bad debts worth around £400,000 and meant that “we couldn’t keep going”.
He said the company had held talks with its own creditors prior to administration in a bid to buy enough time to allow it to continue.
“All of them were supportive apart from HM Revenue & Customs, who wouldn’t help at all,” said Kenyon.
“We even got our local MP, Andrew Gwynne, to lobby on our behalf,” he said, but when HM Revenue persisted with its threat to issue a winding-up order to recover its debt the firm was forced to call in administrators, appointing David Whitehouse and Sarah Bell from the Manchester office of insolvency firm MCR just before Christmas.
Around half of the company’s 160 staff were laid off following MCR’s appointment but 70 have been retained. All staff at its Heysham-based subsidiary firm, Conservatory Coloured Glass, have been retained and the business has been reopened with a view to selling it as a going concern to a third party.
Kenyon said that he was hoping to salvage a deal to buy back some or all of the assets of the Denton-based operations which were co-founded in 1983 alongside Wayne Clark and Paul Thackeray by the end of the week.
A predecessor firm, Malbern uPVC Windows & Doors had previously fallen into administration in January 2009 following a decline in the housing market, but Kenyon and his co-directors agreed a “pre-pack” administration deal to buy the business back for £235,000. In the year to March 31, it made a pre-tax profit of £117,000 on sales of £12m.
A statement from administrators MCR said that it would only undertake “a period of limited trading” to complete outstanding orders and continue talks with people who are interested in buying the firm’s business and assets.
“The company has been lossmaking in recent months caused in the main by two significant bad debts and has been faced with significant creditor pressure,” said Whitehouse.
“We were advised by management prior to the appointment that the company had been placed on stop with a number of key suppliers and had defaulted on a number of agreed repayment plans with creditors.
“As a result, the directors acknowledged the need to take steps to place the company into a formal insolvency process.
“The business and assets of the company have been marketed for sale by both the company prior to our involvement and the administrators following their appointment,” he continued.
The company’s main asset is its book debt of around £1.2m, but any buyer will need to provide guarantees and/or warranties to customers for inatallations.
“Hopefully a going concern sale will be completed by the end of this week,” said Whitehouse.
“The sale will either be of the entire business of the company or, alternatively, a number of separate transactions whereby the different divisions operated by the company are sold separately. The joint administrators appreciate the continued support of retained staff and we hope to have secured employment for all remaining staff with a new employer by end of this week.”
The collapse of Connaught and Rok have left subcontractors working for the pair out of pocket to the tune of around £320m – £280m is owed by Rok and £40m by Connaught.
