Details behind Bemrose collapse emerge as sale nears completion
Wednesday, July 7, 2010
Administrators for BemroseBooth have confirmed that a potential sale of the business is at the contract stage.
Administrator David Rubin & Partners also revealed further details behind the collapse of the company.
David Stephenson, senior manager at the insolvency practitioner, explained that the business's insolvency was the result of losses made from uncompetitive contracts.
He said: "This stemmed from overcapacity in the market and a decline in demand for some of the company's products. We understand there is a substantial pension deficit, although we await confirmation of the precise amount.
"It is not the pension deficit itself that brought about the demise of the company."
He added pension contributions were up to date, but said pressures on cashflow "led to the company falling into arrears with its payments to other creditors".
GE Commercial Finance, the company's invoice discounter, suspended its finance facility and was unwilling to advance further funding.
BemroseBooth paid, but subsequently ran out of money.
Stephenson said: "The company had insufficient resources to continue trading without the protection of an administration."
Elsewhere, in a letter to Marks & Spencer (M&S) chairman Stuart Rose, dated 30 June this year, former BemroseBooth chief executive Jean-Paul Ansel described the statements previously made by the retail giant as "deliberately and entirely false".
M&S had said it had been approached "with an invitation to extend the contract, not with BemroseBooth, but with its existing management team trading as a new company".
It also claimed BemroseBooth was "misleading" its workforce by implying that M&S was part of its decision, which Ansel also said was a false statement.
In his letter, Ansel wrote he was taking legal advice about how to respond.
M&S said it had nothing further to add.