Steads staff to be paid in full but creditors face a shortfall
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justin.stanton@rbi.co.uk PREFERENTIAL creditors of Nottingham-based Steads Haulage will be paid in full, according to the liquidators of the collapsed irm, but there is a shortfall to unsecured creditors of £423,977.
Steads appointed Edward Kerr and Ian Gould of PKF to handle the administration of the business on 5 November 2010. Their report reveals that not only was Steads affected by its most important client, Trent Concrete, collapsing, owing it £121,049, but also that another contract was lost to a competitor.
The two contracts represented about 40% of Steads’ turnover. The management reviewed its business case on the reduced turnover and concluded that the irm would incur “signiicant losses”; professional advice was sought. Before the appointment of the administrators, negotiations began with another client, Redcliffe International (which represented 25% of Steads’ turnover), to acquire the trucks and staff that worked on its contract, although Redcliffe made it known that should Steads be sold, it would take its transport in-house rather than engage with another contractor. It was agreed that Redcliffe would pay £13,900. However, Redcliffe then withdrew, and Steads ceased to trade.
The 21 former Steads employees are owed £8,199, which will be paid in full. They are owed a further £106,143 in redundancy payments and, although this falls with in the unsecured creditor total of £615,481, the liquidators expect the employees to be paid in full. The other unsecured creditors are owed £509,338. There is £191,504 (on the assumption that inal book debt realisations will be circa £180,000) in assets left for unsecured creditors.
Steads’ last full annual accounts showed a turnover of £2.2m in the year to 31 August 2008, generating a pre-tax proit of £164,835. The following year, Steads submitted abbreviated accounts, showing a net proit of £37,652.