For the past week Sourcing City News have been trying in vain to obtain an official statement relating to the state of Non Stop Promotions at the time of it’s demise. Unfortunately we have been advised that legally the liquidators are not able to make further comment at this stage. We understand that the report to creditors will not be issued until the liquidators have all the required information and that, once complete, it will be a private document for circulation to creditors only. Not being creditors, this of course means we will be unable to obtain answers to the specific questions we posed. We hear that questions were raised at the Creditors Meeting which need to be investigated by the liquidators before the final report to creditors will be issued. Rumour in the marketplace has resulted in unconfirmed claims that the company had debts in excess of ?1m. A similar figures we also hear was the news for the PPAG creditors. Since being purchased by Dublin based PPAG, the group had posted sales of ?9m+ in 2008, since this time both companies experienced significant decline. The sale price has not been disclosed to us.

The experience with Non Stop has occurred hot on the heals of the demise of CMC, and once again innocent suppliers have been hit hard in the pocket. How long will it be before a supplier can no longer overcome such loses? | When occurrences like this have arisen in the past, it has been extremely difficult for us to establish whether a company is in administration or indeed has moved into any of the following stages. It appears that no ‘official government body’ needs to be notified at each of the key stages? Unravelling how insolvency, administration and liquidation actually works in practice is no easy task. It appears that licensed insolvency practitioners can be employed by the company directors, and then also act as liquidators, with a duty to act in the best interest of the creditors. It also appears that key decisions can be taken without consultation of the creditors. Suppliers must feel powerless, and seem to have no choice other than to simply shrug their shoulders and accept whatever position is put in front of them. Sooner or later, these type of occurrences will take an innocent businesses down, & that just does not seem fair. | We as an industry, need to understand this entire process much better. Perhaps now is the time for our trade associations to add a valuable new member benefit. The employment of an expert ‘Insolvency Lawyer’ when any company in our industry fails, may just help ensure that our suppliers get some clear understanding of what is happening at key times & what legal rights they have to influence the course of the decisions made.

Published on: March 8th, 2010