Iceland chief leaves a £40m pension shortfall
A COMPANY bought by frozen foods tycoon Malcolm Walker and two associates at his Iceland retail group has a £40million pension fund hole that will have to be taken on by the Pension Protection Fund.
Administrators for DBC Foodservice, which employed about 1,000 workers, said last week that the food and drinks distributor had left creditors £92million out of pocket. A shortfall in the staff pension fund accounted for £40million of the total.
DBC was put into administration in March after being acquired in 2009 by Iceland founder Walker, the frozen food chain’s finance director Tarsem Dhaliwal and former managing director Andrew Pritchard.
The three had acquired the ailing company – founded as the Danish Bacon Company in 1902 – for just £1 in the hope that they could reverse its fortunes.
Their failure to make the business work has left a string of big names out of pocket. The creditors’ report revealed that Coca-Cola Enterprises was owed £293,000 at the time of the collapse while Caffe Nero was owed £401,000 and Britvic £466,000.
Van hire group Petit Forestier is facing a loss of £9.2million – the biggest among the trade creditors.
DBC had run up losses of almost £6million in the 11 months to the end of February, administrators said.
Dhaliwal, who was most closely involved with the day-to-day run- ning of the business, had some initial success in improving turnover, but it was hit hard by the loss of a contract to supply Little Chef in 2010.
Credit insurers withdrew cover at the end of last year and management began to look for a buyer in March.
A key Ministry of Defence contract was sold to Vestey after administrators took control, while food supplier company Brakes bought an option to acquire some contracts. More than 160 jobs were saved as a result of the Vestey sale.
Unsecured creditors may be able to get some cash back if the administrators are able to sell four properties owned by DBC.
Dhaliwal and Walker declined to comment.