Cooper Clegg's creditors' report details emerge
Friday, 03 April 2009
Creditors of the failed magazine printer Cooper Clegg have expressed disbelief at the revelation that there was an "£8m blackhole" in the company's funds, following the meeting of creditors.
According to the creditors' report, a copy of which has been seen by PrintWeek, creditors present at the 25 February meeting "could not understand how the acquiring company had not found an £8m 'blackhole' prior to the purchase".
Furthermore, the creditors, asked joint administrators Andrew Andronikou and Peter Kubik of UHY Hacker Young to investigate the book values placed on the company's chattel assets, "particularly unencumbered plant and machinery which had been written down in the statement of affairs by in excess of £7m".
Cooper Clegg, which was sold to a buy-in management buy-out team led by John Wood in November 2008, ceased to trade on 30 January 2009 and left an estimated £6.7m in debts, including £4.35m to trade creditors.
It also emerged at the meeting that no new printing equipment was purchased with the proceeds of an insurance claim resulting from the 2007 floods. The newest equipment on administration at the site was over nine years old, according to the report, which claimed that the only new equipment brought to the site after the flood was a binding machine owned by Cooper Clegg's then parent company Pindar.
The joint administrators criticised Leslie Dalton, the director present at the meeting, for being "unhelpful" in refusing to answer questions concerning the management of Cooper Clegg prior to the acquisition, on the grounds that he had only been an employee at that time.
The administrators said: "This was rather unhelpful as it was clear that the financial problems occurred long before the BIMBO took place."
Cooper Clegg's acquisition was backed by Bank Leumi ABL and Cigala, which is a Limited Liability Partnership (LLP) run by Mark Scanlon, Richard Fookes and Stephen Hargrave.
As a preferred creditor, Cigala was earmarked for a total payment of £2.8m. It is unclear if that payment has been made.
Bank Leumi provided an invoice discounting agreement to Cooper Clegg following its acquisition, funded at 50%. According to the creditors report, Bank Leumi has already been paid in full.
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