Prolog creditors will likely receive little back, warns administrator

Trade creditors of Nottinghamshire warehouse and logistics provider Prolog are set to receive just 4p in the pound, after administrators found there were insufficient funds to pay them in full.

In its latest progress report, Mazars said that even the collapsed operator's secured creditor, Lloyds Bank, would suffer “a significant shortfall under its security”.

Prolog, registered at Companies House as Promotional Logistics, was put into administration in November 2018.

However, 32 staff that did not transfer via TUPE to new businesses during the fallout, are expected to be paid in full for unpaid wages and holiday pay, according to Mazars.

The firm was incorporated in 1975 and first began trading in 1981.

It grew to employ 618 staff across two sites, on the Sherwood business park and in Sudbury, Suffolk.

Read more

• Prolog administrators save 130 jobs after selling Sherwood-based operation to Cotton Traders
• Jobs saved at stricken Promotional Logistics after management buyout
• Prolog in administration and up for sale

But Rebecca Dacre at Mazars said the company had been incurring trading losses for the last six years and after meeting with the insolvency firm in November last year, administration was chosen as the most appropriate course of action.

Three of its sites were then sold to connected company - by way of director Neil Daniells - Prolog Fulfilment for £400,000. The majority of this sum (£310,000) was for plant and machinery.

The sale included the transfer of 334 jobs.

A sale of its Cotton Traders operation was then made to the clothes retailer for £150,000, with almost £130,000 of this made up of plant and machinery. It enabled a further 134 employees to transfer their employment under TUPE.

In the report, Dacre said Mazars had recovered £2.3m (96%) of its debtor ledger to 31 October 2018 and £3m (100%) of the ledger from November 2018.

But despite these recoveries, unsecured creditors may only see a fraction of their money.

The report said it was initially thought there would be 110 unsecured creditors with debts totalling more than £3m.

But Mazars has received 42 claims totalling more than £7.3m.

“Based on claims received to date, it is anticipated that the return to creditors will be approximately 4 pence in the pound,” it said.