Trade creditors of Prolog may only receive a tiny fraction of the estimated £10m owed to them after the company entered administration and was then sold off in parts.
In a report to creditors, Mazars said the warehouse and distribution firm - registered at Companies House as Promotional Logistics but which traded as Prolog - had been incurring trading losses for six years before financial support was withdrawn in November 2018.
It entered administration shortly afterwards and was immediately put up for sale, although it continued to trade at full capacity.
Newly created business, Prolog Fulfilment, led by former management team Neil Daniells and Nick Hoare, acquired two sites on the Sherwood business park in Annesley, north Nottinghamshire and one in Sudbury, Essex, in a management buyout.
Mazars said that Prolog employed 622 staff and preferential claims are likely to be in the region of £48,000; however, it is anticipated that they will be paid in full.
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The report said: “From the claims received to date and from information extracted from the company’s records, we anticipate that unsecured claims against the company will be in excess of £10m per book values, although actual claims received may differ in value.”
The administrator said unsecured creditors were unlikely to receive a dividend, but there could be a return via the “prescribed part”: a proportion of the company’s net assets set aside for the benefit of trade creditors.
“The company’s net property is estimated to be £2.49m and the prescribed part will therefore be in the region of £502,000,” it added.
“Please be aware, this estimate is subject to change and the final outcome will be determined once all asset realisations have been achieved and creditor claims adjudicated.”
