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PS: Creditors want answers
Page 13
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iress Pallet Networks ceased iding on 16 August—and has finally Id a creditors' meeting. Dominic rr4 sifts through the evidence.
otlapsed pallet network nss Pallet Systems waited St two-and-a-half months It ceased trading before lied in the liquidators, a tors' meeting has heard. le firm had been strugsince at least last mber and finally ceased ng on 16 August, shortly CM's investigation into noddy business practices. Iver, insolvency practirs were not called in until ictober.
nntley-driving boss Roy nhill claimed that this was ow the company to try and (p some of the estimated ,000 it is owed. But he tted that it had collected ''next to nothing".
Explaining why a firm of debt collectors employed by insolvency practitioners Sorskys were having problems recouping its debts. Greenhill explained: "They are just trying to get away with not paying. They'll come up with all sorts of reasons... people will try and get away with it when they hear a firm has stopped trading."
Illustrating one way that companies are trying to dodge payments. Greenhill says: "You get all sorts of excuses... they ask for Proofs of Delivery going back years and if you can't find them then they won't pay." Ironically, creditors have previously told CM that EPS frequently used this reason for refusing to pay them.
Top of the creditors' list is parcels and logistics firm TNT. which is owed almost £130,000 in rent. Phillip Dyson from law firm DLA, which is representing TNT, says that rent had not been paid for several months, although £40,000 was received by TNT in the spring.
Questions were also asked about the relationship between EPS and another Greenhill firm. UK Express Systems, which is still trading. As well as being a depot within the network, it also shared premises with EPS,
Angry creditors wanted to know why, when EPS was renting around 4,650m2 of warehouse space at a cost of 1160,000 a year, did UK Express claim it was only renting a tiny 37m2.
Greenhill claimed that this was the same space allocated to any depot within the system, ignoring the fact that all other depots had their own premises. Dyson adds: "It must have occupied more than 37m2 and therefore should have made a bigger contribution to the overheads."
It was also revealed that none of EPS's directors were paid salaries by the firm; Instead they relied on their other businesses for income. Dyson says: "How can this
company, [UK Express Systems] that only occupies 37m2 of space afford to pay [two of] the directors their salaries where the larger firm cannot? That doesn't seem to add up."
Additionally, no red had been paid by UK Express Systems since April. According to Dyson this means that It owes EPS six months' rent. Despite this UK Express Systems is allegedly owed £32,000 by EPS. Another firm, Pallet Systems—owned by fellow director Janet Jones—apparently owes EPS £2,000. However, Pallet Systems disputes this claim— a situation all too familiar to firms which had to deal with EPS accounting systems.
Evidence from another creditor, employment agency Maxwell James (which is owed almost £6,000), Indicated that EPS had been hiring drivers, even though the firm does not run any trucks itself.
But Greenhill promised that If UK Express had been using the drivers then it would settle the debt.
Consultant Terry Russell, who represents creditor Dudley Distribution, says that it was given work by UK Express Systems. He adds: "Some of the contracts we were being given were contracts that EPS was unable to fulfil—but we had serious reservations about taking on work to the detriment of EPS."
Financial records also show that EPS had struggled to pay Its National Insurance and employees' PAYE contributions for some time, with an Inland Revenue claim outstanding for more than a year.
Newly appointed liquidator Ron Speight from corporate recovery firm Moore Stephens, which also represents a number of creditors, says he will take a hard line with any firm refusing to pay Its debt to EPS. And he adds that he will be looking at the relationship between EPS and UK Express Systems ''in some detail".