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Orbit lost to weight of staggering debt
Page 6
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Angry subcontractors are asking how a freight forwarder accrued
debts of £300,000 in a year. Dominic Perry reports. A COLLAPSED Scottish freight forwarder is facing an on-going financial investigation after liqui dators say they discovered anom alies in its accounts and debts of over £300,000 that were run up in little more than a year's trading. Orbit Logistics went into liqui dation on 2 February leaving a trail of angry subcontractors. When it was launched in November 2002 director Sharon Chambers boasted that she wanted to "be the
same size as Securicor". Creditors are particularly angry that so much debt was incurred as the company began to struggle financially, They face a sizeable loss; with no trucks of its own, all Orbit's work was subcontracted out, hence the lengthy creditors list
and its lack of assets. Hardest hit is Airdrie-based SH Transport, which had four trucks and drivers on contract with Orbit and is owed £127,000. Boss Stuart Hargrave is devastated by the col lapse:"All the work I've done over the years to build it up is just lost. I put £30,000 of my own money in
and it's a lot to lose like that." Hargrave, who had been work ing with Orbit almost since it started, says the firm appeared to have difficulty making payments from August 2003. Cheques began bouncing in November and Hargrave pulled his trucks out the following month. Tom Maguire, who runs Glasgow-based McLellans Transport, echoes Har
grave's comments. The majority of McLellans' £23,000 debt stems from work late in Orbit's existence. "We were exposed to debts of £12,000 in January when they knew there were problems," says Maguire. "It's certainly left a bad taste in my mouth." Other creditors include Cumbrian operator Wilham Armstrong and Aberdeen-based Caledonian Logistics and Sandy Bruce Trucking. Sandy Bruce says: "Having seen the liquidators report it seems that someone should have been flagging up prob lems earlier than they did. They were trading for
around a year and ran up liabilities of approximately £300,000. "It was pretty obviously going
nowhere," he says. A copy of the liquidators interim report refers to "anomalies" in the management accounts: "Creditors present [at the credi tors meeting] raised many concerns as to the trading of the company, in particular the large deficit on the Statement of Affairs compared to the director's previous management accounts pre
sented to certain creditors."
It seems that Orbit had also understated or underestimated the amount owed to creditors. Liquidator Irene Harbottle says: "A substantial loss has occurred cornpared to the company's records. "I'm not insinuating any wrongdoing by the directors but I want
to know where these claims have come from."
She adds that the company spent heavily on promotional material to start with but may have "been underfunded from the start".
Director Sharon Chambers declined to comment.