The administration of the Leeds-based company followed a winding-up petition (WUP) by creditor Mail Solutions UK filed at Leeds District Registry on 9 February and due to be heard on 12 April.

Print On Solutions directors Robert Binfield, Stephen Allott and Christopher Iredale incorporated a new company, Wepos, at Print On Solutions’ Century House, Millennium Drive, Leeds, address on 1 March.

On the same day the company started seeking advice from insolvency practioners Wilson Field.

Joint administrastors Kelly Burton and Joanne Wright of Wilson Field’s Sheffield branch, were appointed on 4 April and sold the business and assets to Wepos on 11 April for £132,000, keeping the 54 Print On staff in work.

£27,000 is to be paid on completion and the balance, guaranteed personally by the company directors, in four installments on the 12th day of the month, from the first month after completion.

The biggest creditor is Skipton Business Finance, which is owed £672,246, HMRC, owed £193,329 in PAYE and £137,818 in VAT, and Mail Solutions, owed £157,377.

Other creditors include Peak Envelopes (£52,380) and Regent Envelopes (£46,178).

The administrators’ report seemed to lay most of the blame for Print On Solutions’ failure at the door of a dispute with Shropshire-based envelope manufacturer Mail Solutions over envelopes to the value of £150,912 and the loss of a contract with client Google. The envelopes, the report said, “did not meet Google’s specification and were deemed to be faulty.”

The report said: “In light of the troubles detailed above, Google ceased working with the company which lead [sic] to a reduction in sales and consequently impacted on the company’s cash flow.”

However, Mail Solutions disputes this version of events, saying the envelopes in question were a small fraction of the total supplied and the quality complaint came only after it put a hold on its account due to an upaid bill.

Burton and Wright said directors’ focus on day-to-day operations “fell away somewhat” while dealing with the dispute and the company fell into arrears with trade creditors and HMRC.

In addition when Mail Solutions advertised its WUP on 1 April Print On Solutions’ bank account was frozen and its funder and biggest creditor Skipton Business Finance requested Print On Solutions seek advice.

A general downturn in the printing industry and tight profit margins were also factors, they said.

Mail Solutions group finance director Phil Reid said: “I know they’ve been going around telling everyone it’s all our fault. The number of quality complaints related to 110,000 envelopes, and these were only raised after we had placed their account on stop. We supplied them with 65.7 million envelopes, so even if the quality complaints were valid, the quantity involved was almost immaterial. We put them on stop at the end of October, they didn’t give us the complaint about the quality of the envelopes until December.”

He said that it was disingenuous to blame a supplier for the quality of products which were sent on to customers after the overprinting process, calling the accusations “rubbish”.

“We were prepared to let the court scrutinise their claims as part of our winding up proceedings, but Print On obviously didn’t want to let it go that far, so called in administrators the day before the hearing was due.

“I can assure everyone that Print On’s demise is nothing to do with us, it’s all of their own making.”    

Wepos is now trading as Print On, using the same address, phone number and website. Staff answer the phone as Print On.

PrintWeek understands a number of Print On Solutions creditors have agreed to supply Wepos, if payment is made up-front. One told us its request to receive payment by credit card led to the order being withdrawn.

Mail Solutions however, said it refuses to supply phoenix companies on principle.

Wilson Field considered a CVA, which was dropped, and liquidation, which was discarded as it would lead to an additional debt of around £297,236 for wage arrears, accrued holiday pay, pay in lieu of notice and redundancy for staff.

A pre-pack represented the “only realistic prospect of selling the business on a going concern basis” and would generate a better return for creditors than alternative options, the administrators said.

Print On Solutions was itself created from the pre-pack of Binfield, Allot and Iredale’s previous company SCR Envelopes, which went into administration on 25 November 2013 owing creditors almost £1.2m.

The two directors actively working at Print On, Allott and Iredale, did not respond to PrintWeek’s requests for comment.

Neither Print On Solutions nor Wepos are connected with Cheadle, Cheshire-based printing business Print On.