ICSM Business News: ‘there must be a better way’ as staff and suppliers are left unpaid by liquidated family firm
By Harry Mottram: The comments on the trade website for the print industry Print Week sum up the frustration of workers and suppliers who are left high and dry by a failed firm. The publication has reported on the demise of the Leamington Spa based Warwick Printing Company that ceased trading on 5 August having entered into members voluntary liquidation. Established in 1946 it was only four years ago that John Young died leaving the company to his sons Paul and Alan Young who have blamed the collapse on ‘trading difficulties.’
Warwick Printing Company ceased trading on 5 August and entered a members voluntary liquidation on 8 August, with Andrew Kelsall and Lee Green from Larking Gowen appointed as joint liquidators.
The firm, based in Leamington Spa, was established in 1946 and has been owned by the Young family for 36 years and employed around 50 people.
Brothers Paul and Alan Young took over the business after the death of their father John in late 2018. But after a meeting in which it was announced the staff and suppliers may not be paid this month causing considerable distress although the owners said workers would be paid by the Redundancy Payments Service and once the business was sold the service would be re-imbursed.
One commentator on the Print Week website wrote: “This is happening far too often that the loyal and hard working staff get 'shafted; every time with delays in wage payments. We need a better system in place.”
It is a sentiment many – especially those who worked for the YM Group – will agree.
Print Week's Jo Francis reported: “On 13 July Alan Young set up a new company, Fosse Cottage Media. He is understood to be planning to offer pre-press and magazine production services.”
The Insolvency Service has this information about a members voluntary liquidation:
Liquidate a company you do not want to run anymore
You may choose members’ voluntary liquidation if your company is ‘solvent’ (can pay its debts) and one of the following applies:
- you want to retire
- you want to step down from the family business and nobody else wants to run it
- you do not want to run the business any more
To pass a resolution for members’ voluntary liquidation, you must:
- make a ‘Declaration of solvency’ - English and Welsh companies
- ask the Accountant in Bankruptcy for form 4.25 (Scot) - Scottish companies
You’ll need to review the company’s assets and liabilities just before making the declaration.
Make a declaration of solvency
Write a statement saying that the directors have assessed the company and believe it can pay its debts, with interest at the official rate. You should also include:
- the name and address of the company
- the names and addresses of the company’s directors
- how long it will take the company to pay its debts - this must be no longer than 12 months from when the company’s liquidated
You also need to include the statement of the company’s assets and liabilities.
After you’ve signed the declaration or form
There are 5 further steps to members’ voluntary liquidation.
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Sign the declaration or form 4.25 (Scot) - it must be signed by the majority of directors in front of a solicitor or ‘notary public’.
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Call a general meeting with shareholders no more than 5 weeks later and pass a resolution for voluntary winding up.
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At the meeting appoint an authorised insolvency practitioner as a liquidator who will take charge of winding up the company. You can find an insolvency practitioner online.
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Advertise the resolution in The Gazette within 14 days.
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Send your signed declaration to Companies House or form 4.25 (Scot) to the Accountant in Bankruptcy (for Scottish companies) within 15 days of passing the resolution.
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For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk