Greenberg collapsed owing more than £10m
GLASS replacement company Greenberg Group, which was forced into administration by cash flow pressures, has left a total of £10.3m owed to a long list of creditors, according to its administrators.
Major credit issuers pulled cover in September 2008, because of delayed creditor payments and general unease in the construction industry. This led to many suppliers and subcontractors demanding upfront payment and cash on delivery.
The inability to get credit and source materials quickly in turn impacted on work in progress, delaying contracts.
Although the Liverpool-headquartered group split in two in early 2008, trading as Greenberg Glass Contracts and Greenberg Glass Emergency, shared overheads caused difficulties with cash flow and made it hard to assess the individual performances of the two businesses.
David Whitehouse and Philip Duffy of MCR Corporate Restructuring in Manchester were appointed as joint administrators of Greenberg Group on October 28, and of Greenberg Glass Emergency on November 5, and 193 staff were made redundant.
Their report states that although detailed discussions were held with three interested parties for the sale of the whole business, a potential breach of Transfer of Undertakings (Protection of Employment) Regulations meant it was not possible.
They are now in the process of selling each of the four depots as independent business units, on an asset sale basis.
The administrators’ report stated there had been no interest in the assets of the Liverpool site, however, TheBusinessDesk understands that the former managing director and finance director have since taken it over.
The London depot has been sold to company director Sam Grant for £30,000, with an additional £20,000 payable if Mr Grant does not collect at least £700,000 of its £950,000 debts.
The Cumbernauld business assets have been sold to former depot manager Mike Guest for £10,000, with a further £7,500 payable once Mr Guest has agreed a final account with a customer on completion of a large contract. He is also responsible for collecting debts worth £300,000.
And an offer has also been made for the assets at the Birmingham depot, which is yet to be completed.
The book debts of the company , which had a value of around £7.47m, were subject to an invoice discounting agreement with bank of Scotland Cashflow Finance with around £2m due to BOSCF when administrators were appointed.
According to the administrators, management accounts for the year to the end of March 2008, indicated a pre-tax profit of £299,000 on a turnover of around £40m. The order book for the group was in excess of £6m to the end of December 2008.
The company reported a turnover of around £37.2m in the year to the end of March 2007, making a pre-tax loss of £1.38m. In the same period it wrote off £1.2m of bad debts.
