Vineyard owners out of pocket following D&D collapse
THE collapse of Knutsford-based wine distributor D&D Wines International is likely to see creditors lose out on around £6.5m of the money owed to them, according to a new administrators’ report.
The company, which was placed into administration in April, owed a total of around £10.5m to creditors – almost £7m of which is owed to wine producers. One Spanish vineyard, Bodegas Muriel, is owed more than £2.8m.
However, a statement of affairs prepared by directors for administrators RSM Tenon estimates that assets worth around £5m are available to creditors.
Asset-based lender Centric Commercial Finance will be paid the £1m it is owed in full, and remaining book debts and proceeds from stock not subject to claims is also being sold off.
This should mean that creditors get a partial refund, including employees owed almost £185,000 in holiday and redundancy pay and HMRC. It is owed around £420,000 in alcohol duties and PAYE.
D&D Wines International was started in 1973 but only became a limited company in 1989. It imported wines from overseas to sell via retailers in the UK and Ireland, and had a contract bottling business which made up around 25% of its turnover.
It was owned David and Myla Garlick until a management buy-out was agreed in January 2011 by directors Lewis Jones, Mark Sands and Ivo Hasler.
Trading deteriorated rapidly in the following year, though, with sales plunging from £47m in 2010 to £43.9m, which was partly due to one of its suppliers deciding to deal directly with UK retailers.
This triggered a fall in turnover, which also restricted the amount of working capital available to it through an invoice discounting line from Centric. Lots of working capital was also tied up in slow-moving stock, and as turnover fell further so did the amount of cash available to it.
“Efforts were made to discuss the position with major creditors and the directors sought to raise additional investment,” the report states.
“After a short period it became clear that it would not be possible to conclude a transaction that would be acceptable to creditors and would allow the company to continue to trade outside a formal insolvency arrangement.”
