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Creditors' debt quest
Page 16
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Page 18
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Liquidators are trying to sort the complex finances of a
string of failed
freight firms.
Dominic Perry follows the thread.
4:1 uestions are being asked by the creditors of a string of failed haulage and freight forwarding firms about exactly where their money has gone.
In particular, the liquidator for one of the firms is probing the apparent lack of transparency in trading between the firms and a lack of cash at the operation.
Glasgow-based Alternative Logistics and two subsidiaries, Castleford-hased Gaffers Transport and Bristol operator Prince Transport Services were all placed into administrative receivership at the end of December last year. Alternative Logistics was effectively acting as a holding company for the other two, both established transport firms that had been bought out: Gaffers in November 2002 and Prince a month later. although records show that shares in Prince were 100% owned by Grampian plc, a related company.
William Cusack and Thomas Hamilton, the men behind Alternative, may be familiar to CM readers in connection with two other failed haulage firms — Brick Transport (Scotland) Ltd and John Smillie Ltd that went bust owing creditors hundreds of thou sands of pounds. Cusack was a director at both firms plus parent firm Grampian plc and another firm set up to take on the work of Smillic — Timber Transport. Hamilton was also a director at both limber and Grampian.
An investigative report commissioned by one of the creditors at the time of Brick Transport (Scotland)'s closure and obtained by CM casts serious doubts over the management of the businesses (see box).
To complicate things further there are questions being asked by the liquidators over the directors', and others', conduct at another firm: AL Transport (ALT). ALT was forced into liquidation two weeks ago after the receivers at Gaffers Transport discovered that it owed them around £200.000 in unpaid bills through inter-company trading. Although it was not part of the same immediate group of companies as Alternative Logistics, its first directors were Cusack and Hamilton before they resigned in the summer to be replaced by Keith Mitchell and his wife Alison — Keith Mitchell was also a director at GaffersTransport (see box Who owns what). According to provisional liquidator Maureen Leslie, its ultimate parent company was Grampian plc.
During its operation as a freight forwarder it handed out work to many small subcontractors who will inevitably be left out of pocket by its liquidation. One subbie hit by the collapse is Carlisle-based John Weir, who says he is owed around £2,000.
Leslie has also raised questions over the behaviour of its directors, revealing that the firm has never filed, nor even prepared accounts. She adds: "On the face of it there seems to be quite a lot of inter-company invoicing — it appears that if a contract came in to AL Transport for the Bristol area they would contact Prince [Transport] and ask them to organise that and then Prince would invoice them.
"I don't want to say anything that will sound too dramatic, but shall we say it was a complex inter-company arrangement.
The dealings between the companies are not entirely transparent and at this stage are under investigation by the receivers of Gaffers and myself."
She also revealed that the company has virtually no cash. She says: "It's very difficult to say [how much it had] because the arrangements appear to have been as money flowed in to AL Transport, almost immediately it flowed out to the holding company Grampian. There was no money there so no prospect that it could have continued trading —although I've got no right to look at the accounts of Grampian and they may have had arrangements in place to bail them out. However there's no doubt that Grampian was the ultimate recipient of funds."
Another firm acquired by Alternative was Worcestershirebased QuartermansTransport. It was bought by Alternative Logistics in May 2002: its former directors claim there are still payments outstanding.
Quartermans, which received a loan of £20,000 from another of Hamilton's firms Ramshackle plc, has not been liquidated, although appears not to be trading, with Gaffers having taken over the vehicles — they appeared on Gaffers' Scottish 0-licence in June 2003.
Just an investor
Tom Hamilton plays down his part in the running of Gaffers and says he was only ever an investor and consequently has lost over £100,000. Companies' House documents reveal that he was a director of three firms:Alternative Logistics. Prince Transport and Quartermans Transport.
Hamilton adds: "The point is. as far I'm concerned, that I tried to put together a business of some size which involves buying things which are virtually bust to start with.The only way to succeed was to put them together... By its very nature it was high risk," He also attempts to blame the former owners of both Gaffers and Prince for the firms' failure.
Additionally he says Quartermans is embroiled in a £05m legal battle with steel stockholder John Tainton Ltd. which used to be its biggest customer, over an alleged breach of contract: it is understood that Tainton is counter-claiming.
Also in Hamilton's firing line were his appointed directors at Gaffers:Cusack and Mitchell.who he blames for poor management of the company. He adds that he pressured for Gaffers and Prince toclose to help the creditors:"I was instrumental in saying 'enough's enough, [although] I might have found better managers to do a better job.
"The companies would not have survived the period through December. I was not prepared to put the creditors into a worse position than they already were."
He went on to stress that any suggestions of a lack of transparency in ALT's accounts are without foundation, he adds: "If someone's saying there's a lack of transparency they don't understand the facts.
"ALT was just some lads in Glasgow. When we transferred the entire [Gaffers] haulage fleet down to Leeds [it] meant that we had a few lads in Glasgow without a job and we agreed to set them up as a freight forwarder and make a go of it. As far as I'm concerned without that [compulsory winding up] order the company could have continued trading and could not have gone out of business.
He says the actual debt due to Gaffers is, with counter-invoicing, around £8,000, and describes allegations that Grampian was receiving money from the firm as "without foundation". •