The Widdowson story has taken another twist with the revelation that, after its latest pre-pack administration, the Leicester-based haulier entered into service agreements with individuals associated with the failed business.
Widdowson Logistics was placed into administration on 23 January with Leonard Curtis, which has handled all of the operator’s recent insolvency activity, overseeing the process.
In its report on the latest collapse, which is dated 3 March, Leonard Curtis said Widdowson Logistics lost two haulage contracts with major customers, its fleet was therefore under-utilised and its transport operation was running at a loss.
The administrator added that the warehousing part of the business had been faring better, operating at breakeven.
However, it also lost its largest customer after it decided to consolidate its storage facilities in a different part of the UK.
Widdowson Logistics had a turnover of £7m in the period ended 31 October 2016.
It made a pre-tax loss for the year of £461,000, according to the administrator.
However, it was pursued for £208,000 in arrears by a vehicle lease provider.
This was connected to the transfer under a lease agreement of 21 vehicles from the business’s predecessor AM Widdowson & Son (in administration under the name Loglecdissol) and this tipped it into administration after attempts to sell the business failed.
Widdowson Logistics is the successor company to AM Widdowson & Son.
The latter traded through a CVA before being placed into administration in July 2016, leaving unsecured creditors facing a near £13m loss.
It was owned and then sold back in a pre-pack deal to Davis Haulage Group, which is ultimately owned by Malta-registered HLD Group.
The collapse of Widdowson Logistics has left unsecured creditors a further £1.3m out of pocket with little chance of getting their money back, according to the administrator.
As reported , Birds Transport Leicester, connected by a common director (HLD’s Demis Ohandjanian) and registered at the same Glenfield address as Widdowson Logistics, purchased certain assets of the business in a pre-pack deal – four vehicles and five trailers as well as fuel – from the administrator for £50,000.
Two separate service agreements were also struck at this time with connected parties Glenfield Storage Solutions, of which Ohandjanian is also a director, and Birds Transport Leicester.
The service agreement with Glenfield relates to the pallet repair division of the business and existing customer obligations.
Glenfield is able to use the unsold garage equipment, office equipment, general plant, racking and additional unencumbered motor vehicles as part of the deal.
It is intended that 70% of the profit made by Birds Transport Leicester and Glenfield will be retained by them under the arrangement, with the rest going to Widdowson Logistics.
The report added that a number of employees had been retained under the service agreements. However, they have not transferred to the new companies despite the fact they are paying their wages.
