A Wirral card printing company has been bought from administration in a pre-pack deal after losing major print contracts and suffering a damaging dispute with a former director.
Financial director of Print Search Chester, trading as PSC Systems, Elizabeth Maly called in administrators Begbies Traynor on 22 December after a series of knockbacks and what administrators termed “notoriously difficult” trading conditions in the printing industry.
The company, trading for 27 years, had been the sole provider of all Alliance & Leicester’s payment cards since early this century. This represented 50-60% of its turnover by 2009 when Alliance & Leicester was acquired by Santander and PSC lost the contract.
The company made around 12 employees redundant at that time. It lost another major contract early last year to a competitor and faced a similar situation.
In addition the company had to find cash for legal fees after it launched a legal case against a former director, who had gone to work with a major competitor. Subsequently PSC lost more contracts to this competitor and PSC made five more people redundant as a result.
A letter to creditors by joint administrator Begbies Traynor regional managing partner Paul Stanley revealed that PSC also faced a retrospective rent review and likely rent rise on its premises. This was owned by a pension fund, of which the former director is a member.
“He also indicated that he wants to demand repayment of some overdue rent in a short space of time. This would again have a severely detrimental affect on the company’s ability to trade going forward,” Stanley wrote.
“All of the above, coupled with some other unexpected costs in relation to utilities at the trading premises have put huge financial pressure on the company, therefore the directors have concluded that the company is unable to pay its debts as and when they fall due.
“In our opinion, the pre-packaged sale offered the best option for the company’s creditors.”
He added that the only real alternative to a pre-pack was to close the business which customer orders would be left incomplete and creditor claims “significantly reduced”.
The administrators therefore sold the assets, stock and goodwill of the company to Blackpool-based PSC Mailing Limited (“Mailing”) for a total consideration of £70,000, saving all nine jobs at the firm.
PSC Mailing Limited is wholly owned by Aaron Corbett according to Companies House. Corbett is also listed as a shareholder and director in Print Search Chester Ltd.
The company has rented a similar size 465sqm premises five miles away in Ellsmere Port.
Maly said: “We didn’t have a choice, it was becoming clear that we had to do something. The legal wrangle with an ex-director gave us a difficult year.
“We genuinely really believe in this business. There’s a good business there. There were extenuating circumstance of the company going through administration.
“One of the things from my point of view was safeguarding employees’ jobs. The future of the business was very positive. We’ve had an amazing response from our customers and our suppliers, even people that have been affected. There a good understanding that times were difficult.
“I’ve been really bowled over by the response in the print industry. It’s shown that the print industry supports each other. It’s been awe-inspiring really.”
Maly said the new business would offer "essentially the same" services, including plastic card printing, embossing and processing.