When Kairos Printworks’ two constituent companies, K2 Print and K3 Print, fell into administration earlier this year, the business and assets of the entity were sold by owner David Dowrick to Diarmuid Foghlu, who proceeded to set up the new company Kairos Print Services (KPS) on the same site in Poole, Dorset.
A total sale value of £15,000 for the goodwill, work in progress and the equity in the two limited companies’ financed assets – £14,000 for K2 and £1,000 for K3 – was agreed by administrators Quantuma to be paid in three monthly instalments up to 23 April.
Administrator's progress reports filed by the legal firm’s Southampton office on 29 August showed that none of the consideration had been paid and the administrator was considering legal action.
Quantuma partner Andrew Watling said: “As of the filing of the report, the consideration has not been paid by Kairos Print Services. If any debt is not paid then we have to look at options for pursuing those payments and that would include legal action.”
Shortly prior to the filing, a number of staff at KPS were informed they would be made redundant on 1 September – according to a letter signed by Foghlu and seen by PrintWeek dated 20 August. An anonymous source said all 13 of the remaining KPS staff had been made redundant, though Foghlu claimed it was 11 employees.
According to the letter, the redundancies were made because the KPS operation was to be rolled into Basingstoke-based FM Print – which Foghlu also owns through his company Amalgamated Holdings.
However, Foghlu told PrintWeek that he has now shut down FM Print and moved all print operations to a third company – PPG Print Services in Portsmouth, which he acquired alongside Robert Gooch as part of a pre-pack in August.
According to Foghlu, the previous owners of FM Print had been engaged in a tax scheme which was challenged by HMRC, who demanded an immediate payment of £705,000. The payment put the business in a “precipitous position of insolvency”, which led to KPS being relocated to a facility in Wimborne run by FM Print.
He said FM Print was then subsequently shut down, with a number of staff made redundant in the process and others relocated to PPG. Foghlu made clear his intention to challenge HMRC's charge.
”Although these sums may be recoverable on successful appeal, the impact of the immediate demand is to place [FM Print] in a precipitous position of insolvency as it would be unable to accommodate the making of that payment and continuing the running of the business,” he said.
”During the previous three-month period the directors of FM Print have been required to take drastic steps, including closing the factory at Basingstoke, and closing another unit at Wimborne in Dorset leading to staff relocation and/or redundancies. These are steps imposed on Amalgamated Holdings and entirely outside of its control.
”All businesses [owned by Amalgamated Holdings] have been affected by the shutdown of FM Print, some more than others.”
Kairos Print Services, FM Print and PPG Print Services were all still listed as active on Companies House at the time of writing, with Foghlu or Amalgamated Holdings listed as a director of each.
In the administration of K2 Print and K3 Print in January, 12 employees were made redundant and six of them entered an early conciliation claim with Acas to obtain their unpaid wages and redundancy from Foghlu – who told PrintWeek at the time he would take responsibility for redundancy packages.
A judgement from an employment tribunal at the Bristol Civil Justice Centre on 15 August ordered Foghlu and KPS to pay the employees for unauthorised deductions to wages, unpaid holiday entitlement, redundancy payment and damages for dismissal in breach of contract.
Foghlu did not attend the hearing at which the ruling was made, according to the justice centre.
However, letters from solicitors representing Foghlu shown to PrintWeek indicate that, as of the 25 September, he has petitioned against the ruling, requesting a review of the judgement on the grounds that the staff were employees of Kairos Printworks and later Kairos Print Services before their redundancy, rather than being personally employed by Foghlu himself.
Foghlu said: ”Amalgamated Holdings is endeavouring to retain so much of the integrity of a proper redundancy process as is possible in the circumstances. We are being guided in this process by specialists but there is an unavoidable delay brought about by the wider processes in train.”
A final ruling has yet to be made as the judge issued a certificate of correction on 27 September to adjust the amount of redundancy pay and damages due to the employees.