ICSM Print Industry Insolvency News: workers not paid at troubled firm; Oldham print company crashes; and Pollards snaps up BCQ; plus a list of insolvencies of recent print and media firms

By Harry Mottram: the first sign of trouble in a company is when your pay cheque bounces and isn’t paid at the end of the month. Or when a supplier says they won’t leave reception until they have been paid for invoices long overdue. Just as bad is when the people who usually come in to service the photocopier arrive and simply take it away. All the signs are there for a company that’s about to go bust.

Staff not paid

The trade publication Print Week have reported that workers at Marlan Products in Rochdale have not been paid since June. Writing on the publication’s website Jo Francis penned: “The employee said that on 3 August insolvency practitioners from FRP Advisory were appointed at the business, and all the employees – understood to be around a dozen – were made redundant. FRP is also handling the administration of sister company Futurama, which went into administration in May.”

The firm – a PFI Group subsidiary - has said the group was being restructured into three Print, Signage and Retail parts. Jo Francis continued: “The employee said that on 3 August insolvency practitioners from FRP Advisory were appointed at the business, and all the employees – understood to be around a dozen – were made redundant. FRP is also handling the administration of sister company Futurama, which went into administration in May.”

Clearly something has gone wrong as not only have the staff not been paid for weeks but the landlord was taking action to evict the business over unpaid rent with Signmaster left high and dry as a creditor when the sister business Futurama went bust in May. Futurama collapsed after it was revealed it need at least £6m just to survive. Ian Carrotte of ICSM said he understood there was a lack of financial control at the firm and noted that Futurama was in trouble prompting two suppliers to issue winding up orders after they were left with tens of thousands of pounds of unpaid invoices.

Thomas Dornan goes bust

Founded in 1848 it is finally the end for printing business Thomas Dornan after Christopher Lawton and Gary Lee, partners at Begbies Traynor, were appointed as joint administrators in June. Sadly nobody came forward to buy the firm and so the various assets were put up for sale including. “including Konica Minolta, Roland DG, Epson, Heidelberg, MBO, and Horizon, plus paper and vinyl stock, other warehouse kit including trollies and pallet trucks, and various office furniture.”

Print Week said the company specialised in litho, digital, and large-format printing and these items and many others would go on sale by auction with Eddisons on 18 August.

Notice of intention filed

BCQ Group has filed a Notice of Intention to Appoint Administrators on August 4 in Birmingham amid speculation the long-standing family firm could soon be under new ownership reports Print Week. The publication said the firm had hit the buffers although there was a rescue deal in the offing this month.

Jo Francis reported that the firm’s Chris Knowles said: “BCQ is not in administration, but has filed a Notice of Intention to Appoint Administrators. Like many other businesses in the print sector, BCQ was significantly impacted by the pandemic, leading to increased debt and market adjustments. Despite this, BCQ remains EBITDA positive, and continues to trade while it works to secure BCA’s future through restructuring.”

The Buckingham firm had planned to restructure with a CBILS loan ‘under a new commercial mortgage, cut costs, and sell some assets’. However these plans failed with the level of debt was revealed and it became impossible to make the firm a success with its 113 workers.

Tragically the firm that began back in the troubled 1970s as Busiprint and later the Buckingham Colour Group has survived the recessions of that decade, those of the 1980s and early 1990s and the credit crunch of 2008 only to stumble before Covid dealt a final blow. Now however the firm has been saved and has been bought by William Pollard & Company of Exeter, a long-established family firm that was established in 1781. The firm trades as Pollards and is still owned by members of the Pollard family penned Jo Francis for Print Week.

She wrote: “Pollards is about half the size of BCQ in terms of turnover. Its holding company posted sales of £4.85m in the year to 31 March 2022, and made an operating profit of £586,297. It had 54 employees. The firm’s assets include investment property and freehold land and buildings valued at nearly £5m. A new company, Bidco 123 Ltd, was set up on 10 August. Its directors are Pollards managing director Dave Mace and operations director John Drew.”

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Types of Insolvency
Administration
Administration applies to limited companies and partnerships and is intended to get the company out of trouble and trading again if possible. Administrators can be appointed to a company that is unable, or is likely to become unable, to pay its debts. They can be appointed by the courts (on application from a creditor, directors or partners), the holder of a qualifying floating charge over the assets of the business, or the company or its directors. An administrator's primary goal is to rescue the company as a going concern. If this isn't possible, the administrator will try to get a better result for the creditors than would be possible if the company was wound up. If neither of these is possible, the administrator will sell the company's property to make at least a partial payment to one or more secured or preferential creditors, such as employees or the bank.
Administrators Meetings Para 51
This statement by the administrator of his proposals must be accompanied by an invitation to an initial creditors' meeting (Sch B1, para 51(1)).
Bankruptcy
This can only apply to individuals (including sole traders and individual members of a partnership). Bankruptcy petitions may be presented to the court by the individual, by creditors who are owed £750 or more, or by the supervisor of an individual voluntary arrangement. A bankruptcy order is made by the court.
Company Voluntary Arrangement (CVA)
A company comes to an arrangement with its creditors to pay the debts in full or in part over time. A CVA begins with the company (or its adviser) drafting a formal proposal at a Creditors' Meeting to pay part or all of the debts. If the proposal is accepted by the creditors, the arrangement will become legally binding and the directors will retain control of the company.
Compulsory Liquidation
This is the winding up of a company or a partnership by a court order (a winding up order). A petition is normally presented to the court by a creditor stating that he or she is owed a sum of money by the company and that the company cannot pay.
The Official Receiver becomes liquidator when the order is made but an Insolvency Practitioner will be appointed to take over if the company has significant assets. The liquidator's role is to realise the company's assets, pay all the fees and charges arising from the liquidation, and pay the creditors as far as funds allow in a strict order of priority.
Compulsory Liquidators Appointed S 136
When a winding-up order has been made, the Official Receiver is initially appointed as liquidator (section 136, IA 1986). The company's creditors and contributories may appoint another individual, who must be a registered insolvency practitioner, to act as liquidator (section 139, IA 1986). More than one liquidator can be appointed to act jointly.
Creditors' Voluntary Liquidation
Here the shareholders pass a resolution to wind the company up without the need for a court order. A Creditors' Meeting is held to nominate the appointment of a liquidator and consider a statement of affairs. Creditors can appoint a committee to work with the liquidator, whose role is to realise the company's assets, pay all the fees and charges arising from the liquidation, and pay the creditors as far as funds allow in a strict order of priority.
Creditors' Voluntary Liquidation Deemed in Consent Meeting
Creditors are now 'deemed to have consented' to a decision or resolution if 10% of creditors (by value) have not objected to it. In other words, if objections are not received by the specified decision date, creditors are 'deemed to have consented' to the decision or resolution.
Individual Voluntary Arrangement (IVA)
An individual comes to an arrangement with creditors to pay his/her debts in full or in part over time as an alternative to bankruptcy. The arrangement is set up by a licensed Insolvency Practitioner who will put it to a meeting of creditors. If the proposal is accepted at the meeting, the agreement reached with the creditors will be legally binding. An Interim Order is sometimes issued by a court and will immediately protect the debtor from any legal action by creditors.
Petitions to Wind Up
A winding up petition is a legal notice put forward to the court by a creditor. The application, in effect, asks the court to liquidate the company as they believe the company is insolvent. Proceeds of the liquidation can be used to pay back creditors.

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For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk