No return for Bernstein creditors

CREDITORS hoping for a return from kitchen maker Bernstein Group Holdings face an even longer wait after the failure of an agreement to pay back some of the debts.

The Bolton-based group, which went into administration last month, had debts worth £8.6m relating to a previous period of administration in 2006.

Creditors agreed to a company voluntary arrangement in early 2007 whereby Bernstein would pay £744,000 by May 2009.

But the agreement collapsed in December when it failed to make a £50,000 payment and administrators were appointed. The company had contributed £250,000 but this has been absorbed by professional fees.

According to documents filed at Companies House the original administrator charged £40,000 for arranging the CVA, but it wrote off nearly £70,000. Legal fees accounted for £45,000 and the CVA supervisor KPMG charged £140,000 but wrote off nearly £240,000.

The original creditors will now wait to see if they receive a payout from administrators at the accountancy firm PricewaterhouseCoopers who were appointed on December 5.

Joint supervisors at KPMG said the CVA had been derailed, “following the slowdown in orders from independent retailers, the decreasing value of sterling, withdrawal of trade insurance for the majority of its customers and the announced closure of their largest customer”.

The Bernstein Group was originally acquired from administrators in 2004 by chairman Bill Gleave. But administrators were called in again in 2006 following problems at its retail arm The Kitchen Studio.

Turnaround specialist Endless took a majority stake in early 2007 when the CVA was agreed. It sold most of its holding at the end of 2007 but still held some loan stock when PwC was called in last month.

Around 180 jobs have been cut at Bernstein by PwC which said it was still trading the company to a “limited extent” with a view to realising company assets for the value of creditors. The business still has 70 staff.