Print firm’s pre-pack deal is seen as ‘concerning’ and ‘uncomfortable’ by creditors and ICSM Credit after the pre-pack pool gives it the green light
Collapsed Crawley based DCL Print Limited have been given the go-ahead for the sale of the firm by the pre-pack pool under the administrators Glyn Mummery and Paul Atkinson both of FRP Advisory Trading in Essex who were appointed administrators on July 2.
“It means that jobs are likely to be saved,” said Ian Carrotte of ICSM Credit, “which was the motivation behind creating pre-packs so as to see a business saved and the staff retained. However many people in the industry are uncomfortable with this one as essentially the same director is involved and some of the creditors have said it is highly concerning and I think it is fair to say they are very unhappy.”
Suppliers left out of pocket
ICSM Credit understands the DCL Print Limited pre-pack has left a string of suppliers out of pocket to the tune of many thousands of pounds.
Pre-packs have courted controversy ever since they were introduced back in 2013 as only around 10% are scrutinised by industry professionals in the pre-pack pool. The issue with some pre-packs are over the problem as critics see them of the connected-party purchaser - where an existing director can buy the defunct company, dump much of the debt and in the words of cynics ‘do a phoenix.’
Writing in The Times last week the journalist Alex Ralph noted three recent pre-packs which have raised eyebrows. He wrote: “The lack of powers for the body set up to oversee the sale of companies to connected parties through contentious pre-pack administrations was in the spotlight again yesterday. Three businesses — Monsoon and Accessorize and Quiz, the fashion retailers, and Everest, the double-glazing company — were sold or were being sold via the fast-track insolvency procedure. However, only Everest, which was sold back to Jon Moulton’s Better Capital, its private equity backer, through a pre-pack administration, was referred to the Pre-Pack Pool.”
Ian Carrotte said: “The Government has previously said they were minded to look at making all pre-packs subject to the pre-pack pool. That would help to bring credibility to the system which also needs to help industry in addressing the issue of late payment. However the plan to at least look at giving ‘the pool’ added powers has been kicked into the long grass and won’t be looked at until next June. With so many firms in trouble it has to be a greater priority as at the end of the day too many creditors lose out in these deals – and that can and does send suppliers under – which is the opposite of what is supposed to happen.”
About ICSM Credit
ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel - while at the moment there's a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach - ask for details from Paul.
For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.
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For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk