Administrators handling the affairs of failed container specialist JWT Commercial said it chose not to furlough the 80 staff because it ran the risk of abusing the coronavirus payment scheme.

In a report to creditors outlining the final days of the Merseyside haulage firm, insolvency experts at Duff & Phelps said all staff were made redundant shortly after their appointment and it wasn’t able to utilise the coronavirus job retention scheme (CJRS).

It said a factor in its decision was the outcome of a high court case involving restaurant chain Carluccio’s, which entered administration last year.

Its administrators had applied for the CJRS to help pay staff and the court held that the company was eligible if there was a reasonable likelihood of achieving a sale of the business and willing employees could return to work after restrictions were lifted.

But Duff & Phelps said this was not the case with JWT Commercial.

The report said: “The joint administrators were mindful of their obligations and duties and did not want to run the risk of abusing the CJRS where there was no likelihood of employees returning to work.

Read more

“As such, the joint administrators had to make the difficult decision to make all staff redundant.”

JWT’s problems began with the loss of a major customer in June 2020, which had a significant impact on its turnover and trading performance.

The company, which held a licence for 90 HGVs operating out of a base in Hornby dock in Bootle, also saw reductions to customer credit limits by the insurer market as a result of ongoing challenges in the business environment and this impacted its ability to trade.

In addition, creditor pressure heightened JWT’s financial difficulties.

According to a statement of assets and liabilities, unsecured creditors of the business, which had traded since 2011, are owed in the region of £1m.

It is currently anticipated there will be insufficient realisations to pay them.