Mcer­lain’s cred­i­tors back deal over debts

Belfast Telegraph - Business Telegraph - - Front Page - BY RYAN MCALEER

CRED­I­TORS of failed bak­ery firm Mcer­lain’s — which went into ad­min­is­tra­tion owing at least £4.3m to other com­pa­nies — have voted to ac­cept a deal that could see them paid as lit­tle as 5p in the pound.

The pro­posal was passed fol­low­ing a fiery meet­ing be­tween cred­i­tors and ad­min­is­tra­tors EY in Toome­bridge yes­ter­day.

It took place less than six weeks after the in­sol­vency prac­ti­tion­ers man­aged the pre-pack sale of the Magher­afelt com­pany be­hind Gen­e­sis Crafty to Tayto boss Paul Allen’s com­pany Hatch Broth­ers, for £1.85m.

The sale, which took place on the same day Mcer­lain’s en­tered ad­min­is­tra­tion on Au­gust 21 2018, saved 260 jobs at the bak­ery com­pany, but left around 200 un­se­cured cred­i­tors out of pocket with some owed six-fig­ure sums.

The big­gest losers in­clude dairy co-op Dale Farm which was owed £641,052.

Other ma­jor cred­i­tors in­clude Belfast-based In­dus­trial Temps, which is owed £252,579, Lis­burn com­pany An­drew In­gre­di­ents Ltd, owed £238,353, Co Fer­managh com­pany Ready Egg Prod­ucts, which has an un­paid bill for £170,040, and Drap­er­stown firm Heron Prop­erty, owed a to­tal of £155,372.42.

Some of the cred­i­tors on the list were present at a meet­ing in The Elk com­plex in Toome­bridge. Most opted not to speak pub­licly, but pri­vately ex­pressed mis­giv­ings with the process and con­cern for the fi­nan­cial blow their busi­nesses have ab­sorbed as a re­sult of the ad­min­is­tra­tion and sale.

De­scribed as “heated” by some of the cred­i­tors who spoke to Busi­ness Telegraph, the as yet undis­closed ar­range­ment for re­im­burs­ing busi­nesses was dis­cussed for more than two hours be­hind closed doors in an up­stairs func­tion room.

It’s un­der­stood that dur­ing a break after the main meet­ing, a num­ber of cred­i­tors briefly hud­dled to dis­cuss re­ject­ing the pro­posal.

While a num­ber of cred­i­tors did ul­ti­mately vote to re­ject the deal, the res­o­lu­tions put for­ward by the ad­min­is­tra­tors were car­ried.

With com­pa­nies owed the most money granted a greater say, it’s un­der­stood Dale Farm ap­proved the ar­range­ment.

Speak­ing after­wards, Stephen Boyd of fam­ily-owned com­pany Alexan­der Boyd Dis­plays, which is owed £7,200, de­scribed the meet­ing as tense.

“It was quite heated at times. We don’t know the de­tail yet of what the set­tle­ment could be. But there was talk of 5p to 10p in the pound,” he said.

“It was re­luc­tantly ac­cepted, prob­a­bly be­cause even if it was re­jected, there would prob­a­bly be more costs in­volved.”

Although the rate cred­i­tors will re­ceive has yet to be fi­nalised, a busi­ness­man, who did not wish to be named, said he an­tic­i­pates as lit­tle as 5p-6p in the pound.

He said he was among the cred­i­tors who voted to re­ject the pro­posal at the meet­ing. An­other cred­i­tor said he had also tried to vote down the pro­posal.

A re­port seen by this news­pa­per showed that al­most half the pro­ceeds of the sale of Mcer­lain’s (£915,000) was paid to Danske Bank, leav­ing £939,313 which was trans­ferred into the ad­min­is­tra­tion bank ac­count.

A spokes­woman for the ad­min­is­tra­tors said: “I can con­firm that the res­o­lu­tions were ap­proved at the cred­i­tors meet­ing this morn­ing.”

Mcer­lain’s was founded in Magher­afelt 50 years ago by Joe and Roberta Mcer­lain. Their six sons had been in­volved in the run­ning of the firm. But fol­low­ing the ad­min­is­tra­tion and sale of the busi­ness only Brian Mcer­lain re­mains in the busi­ness, in the role of man­ag­ing di­rec­tor.

Buyer: Tayto boss Paul Allen

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