Debts revealed at collapsed logistics firm

A rise in fuel and driver costs and the subsequent loss of contracts led to over 200 jobs being lost when a logistics firm collapsed into administration in October.

Solihull-based firm Corporate Solutions (Logistics) called in administrators from FRP Advisory on October 17, but it was too late to save the firm.

Documents seen by reveal that the company suffered from increasing staff and fuel costs, which, along with the implementation of IR35 rules in April 2021 contributed to a shortage of drivers.

This, in turn, led to a loss of key contracts with Smurfit Kappa and others in August 2021. These contracts contributed around £10m and £1m profit a year.

Worse was to follow when Corporate Solutions (Logistics) lost its contract with Aldi following a re-tender process and parts of the work it carried out for Coca-Cola.

Management struggled to find new contracts or customers to replace these lost contracts and the company had to rely heavily on its contract with Lidl.

By August of this year, Corporate Solutions (Logistics) owed HMRC £1.9m and had defaulted on a Time-To-Pay arrangement. It was around this time that FRP was introduced to the company.

A buyer was found for the company, but the deal fell through after it failed to agree terms with the company’s key suppliers. Corporate Solutions (Logistics) ceased to trade on October 14.

FRP says that primary preferential creditors will share £269,000 between them. HMRC is owed £2.3m, but FRP says it won’t receive any of the cash it is owed – neither will unsecured creditors, who were owed £3.7m.

At the end of October, it emerged a number of staff at Corporate Solutions (Logistics) were considering taking legal action for compensation after it was alleged the company failed to consult them before making redundancies.

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