Stockton-on-Tees haulier NT Whitfield (Transport) was increasingly being kept afloat with cash injections from the MD’s pension pot in the months leading up to its administration.
In a report to creditors, FRP Advisory said the company was suffering from “severe cashflow problems” and when it met with MD Ian Smallman on 21 August to discuss options, it was told it would run out of cash by the end of the month.
The container haulage specialist had been trading since 1981 with a team of 29 employees and operated 35 HGVs and 80 trailers.
FRP said it had two main customers who provided more than half of its annual turnover and it had been in talks with PD Ports, which had expressed interest in acquiring the business and assets.
However, no deal was struck and NT Whitfield started to come under pressure from creditors, including legal letters and threats of action.
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The report said: “The directors were concerned that the company was increasingly being funded by cash injections from Mr Smallman’s self-administered pension fund as business had declined significantly over the last 12 months due to combination of rising costs and reduced demand for its services.
“The directors had been stretching creditors and trying to support the company with personally guaranteed loans and personal funds from Mr Smallman’s self-administered pension fund.”
A notice of intention to appoint administrators was filed to protect the business while a marketing exercise was carried out to find a purchaser.
However, no formal offers were received and the haulier entered administration on 9 September.
Based on current assumptions, FRP anticipates there will be sufficient funds to make a distribution to unsecured creditors, which are estimated to be owed £108,537.
