Lost account hastened Clowes’ collapse
THE loss of a major customer contributed to the second failure of Stockport-based Clowes Printers in just over a year.
Newly-filed documents from insolvency firm Leonard Curtis, who were appointed as administrators to Clowes Printers (Manchester) Ltd on September 7, show that the company owed around £600,000 to secured lender Bibby Invoice Finance, which included termination fees on an invoice discounting facility held with the firm.
It also owed more than £651,000 to trade creditors, according to a statement of affairs prepared by its directors.
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The company was set up in July 2009 to buy the business and assets of Arthur W Clowes Ltd, a printing firm set up in the 1920 as that fell into administration last year.
It was bought by Bowdon Investments Group founder Saul Loggenberg for £60,000. He took a 57% share in the business and the remaining 43% was split between two managers.
Clowes Printers was initially financed through an asset deal with Eurofactor and then refinanced with Bibby Financial Services earlier this year. However, the report said that the company fell behind with PAYE and National Insurance contributions.
In March, one of the firm’s biggwest customers (accounting for 15% of sales) decided to move his production to China, which led to cashflow worsening.
Eventually, HM Revenue & Customs issued a winding-up petition against the firm which led to its administration. Management accounts for an 11-month period between July 16 2009 and May 31 show that the company made an operating loss of £82,000 on sales of over £2.3m.
Joint administrators Andrew Poxon and John Titley began a sale process prior to its collapse which led to three bidders emerging for the firm’s business and certain assets. Glossop Cartons eventually paid £100,000 in a deal which saved 18 jobs.
The report states that secured lender Bibby has already recovered more than £390,000 in book debts and a surplus is likely to be generated. As yet, no indication has been given over the likely level of return to unsecured creditors.
