Missing crates and a £1m accounting black hole – administrators’ report reveals problems at failed potato supplier
- Credit: Archant
Missing crates, overpaid pension schemes and a £1m hole in the accounts are some of the problems facing administrators of a potato supplier which served firms including Kettle Foods, Asda, Walkers Crisps and Morrisons.
Unsecured creditors of Preva Produce, which had sites at Foulsham and Snetterton, are unlikely to see more than a 3.8 pence in the pound return as insolvency experts continue to work to sell the company's assets.
Matthew Howard and Stuart Morton of Price Bailey were appointed joint administrators in December, taking over the running of the company.
The pair are now aiming to investigate the firm's affairs in the run-up to their appointment and have been trying to extract cash from the business for creditors, who are owed a total of £4.67m.
In the administrators' latest progress report, Mr Howard said there had been interest in the freehold for the 29,000 sq ft packing facility in Snetterton, with £587,150 raised through the selling of plant and machinery.
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The advisers have tried to complete contracts, with a deal with Kettle Foods being fulfilled for around £100,000, but have pulled the plug on those without sufficient value for creditors.
Mr Howard also explained that, in some cases, he had run into difficulties recovering equipment from uncooperative suppliers.
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Other problems identified by Price Bailey include former employees' pension schemes continuing to be paid by direct debit after they had left the company, potato boxes unaccounted for at sites across the country, and companies refusing to pay until debts have been off-set.
Mr Howard added he had tried to sell a licence for seed storage work undertaken by the company to a firm founded by two of Preva's former directors, but the deal fell through.
Administrators said the company called in insolvency experts after the discovery of a £1m shortfall on its balance sheet. Preva, which reported turnover of £11.6m for the year to December 31, 2014, employed 31 staff before running difficulties began – with 20 people being made redundant in December and a further nine losing their jobs since then.