The DTI Insolvency Service's initial report to the creditors of In-a-Flap Envelope Company Limited has found an estimated total deficiency of 3.25m.


The report may be of little comfort to creditors. It states: "It is not possible to estimate the likelihood of a dividend being paid to preferential and non-preferential creditors and to
contributories."


The official receiver was appointed to compile a report on the Surrey-based company after it was wound up at the High Court owing creditors over 1m (PrintWeek, 25 August).


The report estimates that In-a-Flap Envelope Company Limited has total realisable assets of 780,000, but owes creditors 3.9m.


The action was initially brought by DPS Envelopes, now known as Nova Envelopes, along with supporting creditors Visionglobal, Alfred Ahlers of Germany and Van Stolk & Reese, based in Rotterdam.


In August, the Insolvency Service's official receiver appointed managers from Moore Stephens Booth White and KPMG to act as joint liquidators.


A spokeswoman for the DTI said: "The official receiver now has 10 months to compile a report on the failure of the company and the conduct of its directors."


She added that if the directors were found to have acted with impropriety further action could follow.


Story by John Davies