Sadly, Motortransport.co.uk is filled with stories of companies staring oblivion in the face and making stark decisions over their future.
Sometimes these firms are well known and this was the case in November 2012 when Steve Prince Transport entered administration after struggling with its obligations under a Company Voluntary Arrangement (CVA).
Begbies Traynor’s description of the Essex firm’s fall from grace makes painful reading for anyone who cherished the fleet’s smart red and white livery: “…a consequence of historical poor financial management, bad debts and the requirement to replace its ageing fleet to accommodate new government legislation at the time regarding low emissions.”
Then the economic recession hit and suddenly the bleak reality of 21st Century haulage hit the firm square in the face.
The insolvency practitioners recommended a pre-pack sale, “as the value of the business would be maximised via an increased value to the business of its assets and respective goodwill.”
It’s not hard to see why this decision was taken: it saved 50 jobs and business continued more or less as usual under the new name of Specialised Pallet Transport (SPT – geddit?).
Palletways certainly backed the rescue, with MD Martyn Young telling Commercial Motor the following March that it was fully migrated into his network and that service levels were good.
However, there now appears to be one or two chinks in Prince’s armour; at least according to the latest progress report from Begbies Traynor.
They anticipate that unsecured creditors are unlikely to receive a dividend after the costs of the administration have been discharged, which will only add to the frustration many are currently feeling about pre-pack deals.
But the administrators have also raised concerns about a lack of payment for the business and assets of the firm they sold.
They say Specialised Pallet Transport agreed to pay just under £23,000, split into four monthly payments of £5,747.75.
In addition, 1.5% of the firm’s turnover for the period from completion of the sale to 31 December 2012 was payable until January 2014.
But the administrators state: “We can advise that the first payment of £5,747.75 has been received, however the remaining payments have not yet been received. We have also not received details of the purchaser’s turnover in order to calculate the additional goodwill consideration. Solicitors have been instructed to pursue the funds and information.”
Specialised Pallet Transport will not be drawn on what is going on; in a series of terse emails from director Ron Prince he will only say that it is “old news” and that “there really is nothing to respond to”.
One hopes that he is right and that the solicitors have been put back on their leashes; unfortunately Begbies Traynor was also unwilling to provide clarity to the situation.