Lloyd Fraser Group and its parent company Barbican Capital have slammed Close Brothers and Close Invoice Finance for triggering the administration of the milk and fashion haulier in a move it claims was “wholly unnecessary” and the result of “bullying” and “spiteful” tactics.
Birmingham-based Lloyd Fraser Group was placed into administration on Friday by its bankers Close Brothers. The group, which specialises in the milk, fashion, recruitment and warehousing sectors, employs over 700 staff across 16 depots and operates a fleet of 400 vehicles.
Speaking to MT, Anthony Finlayson-Green, group chief executive, said Close Brothers gave the group no notice that it was calling in the administrators.
“The arrival of the administrators to our depots at 6.30 am on Friday morning came as a complete shock to us. We had received no warning from the bank - drivers and other staff were told they were redundant and to go home and those out on delivery told to return to base.”
He added: “The administrators told staff that they were there to shut down the business, there was no consideration for saving the business at all, and all our licences were revoked.”
Finlayson-Green insisted the company was solvent. He said: “We were a buoyant company and had everything going for us in the future. This is just a very, very spiteful act, which is crazy and will be challenged in the courts, although in a sense, that will not matter because they have killed the business.
"But we will fight back and we will take as much legal action as we can and that will prove the company was not insolvent at all.”
Only the group’s recently launched warehousing business Lloyd Fraser 3pl, which is a separate entity, escaped administration.
Barbican Capital also lashed out at Close Brothers today, insisting the administration was “wholly unnecessary" and warning it will be seeking compensation.
- Lloyd Fraser toasts fashion division’s contract renewals
- Lloyd Fraser 3PL fixes 10-year lease on major warehouse at Magna Park and targets potential acquisitions
- Hauliers look to invest despite battling inflation and lack of available finance, Close Bros research shows
A Barbican Capital spokesman said the company was "appalled by the actions of Close Brothers Limited and Close Invoice Finance Limited which, we believe, has led to our group of companies being incorrectly placed into administration and unnecessarily losing related licenses required to meet our customers’ needs."
He added: “Without any warning, our employees, their families, and our customers have seen their employers and suppliers, each a viable business, closed quite literally overnight due to the unnecessary and irresponsible actions of Close Brothers, despite the solvency of the companies."
The spokesman said Lloyd Fraser had been in the process of moving banks after becoming unhappy with Close brothers' services, pointing to “major flaws” in Close’s IDEAL client interface portalit had discovered which it claimed caused “huge financial issues for and underfunded our business.”
The spokesman added: “However, on 1st September 2023, without warning, and in breach of the agreement to migrate our business away from Close in an orderly manner, Close refused to operate our facility as normal. This has subsequently led to the Lloyd Fraser group companies being put into administration quite literally overnight.
“We believe that these tactics from the bank are tantamount to bullying and are aimed at a group of companies which were on the upward trajectory, creating jobs and meeting our customers’ needs.
He added: “Close Brothers’ behaviour now risks a default on a Covid loan from the British Business Bank, which was essential to ensure the continued operation of our business and supply to our customers during the pandemic.
“With all of these factors in mind we have engaged a legal team to fight this administration and seek justice for the actions of Close.”
Lloyd Fraser’s most recent annual results to February 2022 showed turnover increasing by 20.6% to £43.99m (2021: £36.4m), with pre-tax profit falling by £857,000 to £492,150 in the period.
In a statement, sent to MT, Close Brothers said: "Close Brothers is unable to comment on what is a live situation, other than to state that it strongly disputes Barbican Capital’s characterisation of the events in question.”