Mahood Brothers has few assets, says administrators

Dow Schofield Watts Corporate Recovery (DSWC) says creditors of Mahood Brothers are unlikely to receive much of their debt after a creditors' meeting this week saw the Warrington-based company appointed as administrators.

Mahood Brothers director Marc Mahood
Mahood Brothers director Marc Mahood

Debts owed to creditors totalled about £804,000 with about £63,000 in assets listed.

Nursery and horticulture industry creditors included: Pannebakker & Zoon (£67,434), Ball Colegave (£21,889), Henry Alty (£20,288), Seiont Nurseries (£17,659), Tully Nurseries (£14,950), Delamore (£11,084), Glenbrook Nurseries (£9,157), West End Nurseries (£9,065), Pepinieres Minier (£8,849) and New Place Nurseries (£7,161).

Glendale Horticulture bought the trade and assets of Mahood Brothers on 14 November.

DSWCR received instructions on 17 November.

A Glendale statement said: "None of Mahood Brothers Ltd liabilities were included in this transaction, these were retained by Mahood Brothers Ltd."

The company added that Glendale Horticulture, part of Glendale Services had "acquired three properties from Mahood Brothers (Estates) Limited and the trade and assets of Mahood Brothers Limited, an amenity nursery business based at Burscough Nurseries, Lathom, Ormskirk, Lancashire, for an undisclosed consideration".

John Carpenter and Christopher Benjamin Barrett were appointed as administrators for Mahood Brothers on 8 December.

Letters to around 100 creditors are due out on 12 December.

The letter will include a full director’s report on the reasons for the insolvency and a statement of affairs.

The next step is for Dow Schofield Watts to realise the company assets and distribute funds left to creditors.

But Carpenter said: "There’s not a great deal there."

The creditors report said a £233,000 loss occurred in the year to 31 August 2014 on turnover of £1.45m.

Directors approached DSWC in September 2014 to discuss a CVA offering 41p in the £ to creditors over five years, hoping to save the company by developing sales via internet retailers, a click and collect facility on its website and new marketing at landscapers, as well as a £462,000 bank loan, invoice discounting facility and land sales.

The company also approached Glendale Horticulture on 22 October to see if Glendale would buy the business. The new lender pulled out and the sale to Glendale went through on 14 November 2014. The sales included the company's goodwill, stock and tangible assets for £209,000. After fees, this left £168,000.

Mahood Brothers (Estates) had guaranteed the company's liability to RBS and indebtedness at the time of the sale was £404,000. The company paid £126,000, leaving £42,000 from the sale in the solicitor's client account, and a payment of £278,000 from Mahood Brothers (Estates) Ltd, which remains a creditor in respect of the £278,000 together with previous loans.

The director, Marc Mahood, said that the sale was better than ceasing to trade as it preserved jobs.

He attributed the company's failure to:

1. Decline in sales during 2012/13 following management changes and failure to rectify this in 2013/14.

2. Insufficient control over costs in 2012/13 and 2013/14.

3. Failure to secure external finance for the CVA.

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