Key factors leading to Surfair Global Logistics demise were the owner’s inability to spend “sufficient time” at the business, due to a family bereavement, and an “unexpected trading loss” after inaccurate reporting of the company’s financial position.
The claims are made in a creditors report by administrators Milner Boardman & Partners following the voluntary liquidation of the company last month, which left over 80 creditors facing losses of more than £1m.
The report says MD and owner Paul Cannon was unable to spend time at Surfair during his wife’s illness and after her subsequent death, which occurred ten months after the company’s launch in March 2011.
It adds: “With young children, the director was unable to devote as much time to the business as he would have liked, as his priorities lay elsewhere. His absence meant that the business relied heavily upon the staff.”
The report also suggests financial mismanagement. Management accounts for the period April to 30 September 2015 show the company breaking even. However in January this year “the company’s financial controller reported that, contrary to previous information, the company had in fact accrued a significant loss”.
A subsequent investigation by Cannon into the company’s finances “appeared to show that the company had in fact been making a loss month on month despite financial information to the contrary”.
Believing the core business to be viable, Cannon sought a Company Voluntary Arrangement. However, “given the circumstances, HSBCIF (Surfair’s invoice factoring provider) was unable to provide the company with the level of funding required to sustain ongoing trade at a level that enabled monthly contributions in a CVA and the director took the decision to cease to trade,” the report adds.
Following Surfair’s collapse, business partner Landbridge Logistics acted to cut its losses as a creditor (£125,858), opening a UK base on the same site as Surfair’s HQ in Woodville, Derbyshire last month and taking on a number of Surfair’s Irish clients along with ten of Surfair’s staff.
