P LIQUIDATION
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Ellis Morgan collapse Leaves 0.46m debt
CM COVER STORY joanna.bourkefarbi.co.uk THE COLLAPSE OF packaging company Western Corrugated continues to send shockwaves through the haulage sector, with south Wales-based Ellis Morgan & Son entering liquidation, and another two hauliers dealing with the repercussions.
Peter Dewey of Begbies Traynor was appointed as liquidator of Ellis Morgan on 28 January. He says that the collapse of the haulier's main client,Westem, cost it an estimated /250,000.
A spokesman for Begbies Traynor adds: "Ellis Morgan signed a contract with Western in April 2009 that would generate additional turnover of m a year."
He continues: "Ten drivers from Western transferred to Ellis [Morgan] and the company hired 10 vehicles to enable the firm to make up to 19 deliveries a day" A total of 28 employees at the Welsh haulage firm have been redundant as a result of the impending liquidation.
Western had thrown Ellis Morgan a lifeline back in 2008 after it lost three major clients, according to the liquidator.
Ellis Morgan was a family-run firm that began trading in 1820. It had an 0-licence for 25 vehicles and 45 trailers. Its liquidation leaves it owing non-preferential creditors 11.05m, with available assets of just /47,678.
Ellis Morgan's creditors are owed a total of £1.46m.
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Unsecured creditors include Gwent haulier JP Bull Transport and Padiharn, Lanes-based Fagan & Whalley, which were also working for Western.
Stephen Fagan, commercial director at Fagan & Whalley, tells CAI that its work from Western's Wolverhampton site accounted for 15% of company operations.
-We have managed to save some jobs from those [people] facing redundancy, but could not keep all employed unfortunately," he says.
He adds: -We are evaluating our assets to cope with the loss of the contract.
"However, we do not want to get rid of a large proportion of our fleet we need it to accommodate any new business wins."
Fagan says the company is owed a six-figure sum from Western and anticipates that, as a result of the lost business, a "good deal of profit will be wiped outfor the current year ending 30 April.
JP Bull Transport is owed approximately /165,000 by the failed packaging firm and has been forced to close its Cwmbran site and make 12 redundancies.
Its Chepstow and Monmouth depots are unaffected.
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