City Link failure takes toll on suppliers
NORTH West companies were among the biggest losers when delivery firm City Link west bust on Christmas Eve, owing more than £30m to its suppliers.
Stockport firm Lex Autolease was left £1.7m out of pocket, the second worst hit of all the companies affected.
And Secured Mail, based at Winnick Quay in Warrington, was owed £297.693.86 and was the 11th highest loser.
Documents from directors of Coventry-headquartered City Link show the company also owed £5m to HMRC and £1.28m to workers in unpaid pages, holiday pay and pension contributions.
Experts predict the small businesses across the UK owed millions by City Link are unlikely to recover more than a few pence in the pound.
The company, which was losing about half a million pounds a week when it went crashed, had a shortfall of £62.5m when it appointed administrators at EY.
Administrator at EY Hunter Kelly said that while suppliers are owed £30m they will only recover £600,000 at best.
The biggest loser was family-run Nottingham business Barecode Warehouse which supplies hand held digital devices for parcel delivery signatures. It was owed £2.2m.
The Royal Mail is also owed £1m but employees look likely to receive the full amount of liabilities.
Meanwhile, former private equity owner Better Capital looks set to recover around £20m of the £40m loan it invested as it is a secured creditor.
However, pest-control business Rentokil, which sold the business for £1 to Better Capital in 2013, is first in the queue for recompense ahead of the private equity firm and will receive about £5m of a £29.8m pool set aside for the secured creditors.
