Unsecured creditors of Canute Haulage Group and its successor are set to be left almost £11m out of pocket after last year’s doubleheader of collapses.
Following the operator’s pre-pack administration in May, unsecured creditors of the original business were left facing at a £5.3m shortfall.
However, a newly published Statement of Proposals covering the resurrected business - Almtone trading as Canute Group – reveals that it racked up its own sizeable debts in the months before it succumbed days before Christmas.
According to Begbies Traynor, which is handling Almtone’s administration, unsecured creditors of this successor business are estimated to be owed approximately £5.6m.
“On present information we consider that the company will have insufficient property to enable a distribution to be made to unsecured creditors,” the Statement of Proposals sets out.
In the period leading up to the business’s demise, numerous creditors including its former pallet network Pallet-Track pursued Almtone/Canute for payment to no avail.
The list of creditors of Almtone trading as Canute Group runs to 17 pages and more than 400 individuals and businesses. Amongst these are Pollock (Scotrans) £13,470; W Humphrey's Transport £37,545; TNT (now part of FedEx) has claimed for £14,046; manufacturer Coventry Chemicals (now Mirius) £271,740; builders merchant Jewson £40,501; and Lovery Transport, Co. Armagh, is claiming for £16,038. The operator's former pallet network Pallet-Track is recorded as being owed £59,675.
Read more
- Almtone owned Canute Group placed into administration; some jobs saved but 450 lost
- Canute Group reaches the end of the road with more than 600 jobs to go before Christmas
- Pallet-Track seeks winding up petition against Canute Group over unpaid £47k debt
This included multiple country court judgments taken out against the business and a winding-up petition being launched by HMRC.
Almtone, trading as Canute Group, was placed into administration on 21 December with the loss of 450 jobs.
Begbies Traynor was approached for comment and confirmed that unsecured creditors looked set to lose out.
Depending on the outcome of the legal tussle, unsecured creditors of the original business could face an even larger shortfall then the current £5.3m
Almtone/Canute’s passage to a second administration
The Statement of Proposals reveals that Almtone trading as Canute Group faced an uphill struggle right from the start, with a number of business withdrawing their support following May’s pre-pack sale.
Administrator Begbies Traynor notes “significantly higher levels of ransom payments” from former suppliers, which immediately curtailed cash flow and forced it to adopt a rationalisation plan.
By August 2018, financial backer Nucleus Property Finance, which was providing an invoice discounting facility, notified Almtone it would be reducing its exposure due to the operator’s inability to bring the facility back in line with the terms.
At this point £2m was injected into Almtone by “a party connected to the business” but not named in the report.
Nucleus rejected a funding request at the end of August, leading Canute to fall into arrears in regards PAYE and NIC. The directors of the business filed a notice of intention (NOI) to appoint administrators as protection on 27 September 2018.
This saw the taxman respond with a petition to wind up the business.
Begbies Traynor’s report states that, despite the NOI, Almtone’s director’s believed following a review that they would be able to refinance the Nucleus facility and raise funds to repay HMRC.
The NOI lapsed and by 8 November 2018, the operator did refinance – with a £6m credit line from GQS - and paid back Nucleus’s principal debt, save for £500,000 that remains outstanding.
According to Begbies Traynor, secured creditor GQS will ultimately see a return on the £5.9m extended to Almtone-owned Canute, but will likely “suffer a shortfall on its lending”.
The taxman was paid and the petition dropped. However efforts to secure long-term funding fell away and a second NOI was filed on 26 November.
On the 3 December 2018 a wind-down plan was implemented. A site in Ipswich was divested and 30 staff moved over to a client as part of this. Other customers arranged for the transfer of services to alternative logistics providers – for example, retailer Lakeland contracted XPO Logistics – and a further 145 staff transferred under TUPE all told.
In December, mototransport.co.uk revealed that the Office of the Traffic Commissioner had ultimately rejected Almtone’s request for an O-licence – an interim licence had been secured by Glen Marshall ahead of the pre-pack administration of the original business – as it was unable to demonstrate financial standing.
Another NOI was filed on 7 December. During the wind down period, running until the 21 December and administration, efforts were made to sell the business but there was limited interest.
