The CVA's supervisor BDO Stoy Hayward's Tony Nygate said Karran was "discussing options" but denied reports that the company had gone into receivership. "I can confirm the CVA was rejected but it is not the case that the receivers have been called in," he said.

The Karran Group was unavailable for comment as PrintWeek went to press. It emerged at the meeting that there was a 1m debt owed to the Inland Revenue, which dated back to 2002.

Moore Stephens senior manager Michael Wykes, who represented several creditors at the CVA said: "Once matters came to light, including the Inland Revenue debt, [the CVA's] credibility was lost."

The direct mail company applied to enter into a CVA after what it described as a "disastrous summer" (PrintWeek, 6 October).

Story by Andy Scott and Philip Chadwick