The report from the firm’s joint administrators, Simon Plant and Daniel Plant of SFP, states that the Wyke-based firm owed HMRC £373,249 in PAYE and National Insurance contributions, and £335,920 in VAT.
Prospect had been experiencing financial difficulties under its previous owners since 2005, according to the report, and at the time of administration was described as being “insolvent on a balance sheet basis with a deficiency to creditors of £1,069,861”.
The business was acquired for a nominal sum by the Kevin Dunstall-owned Cogent B2B turnaround venture in October 2012, but attempts to rectify its historic issues proved “insurmountable”. Dunstall invited the firm’s invoice discounting company Bibby to place Prospect into administration. This took place on 11 November 2013, said the administrators.
Dunstall, via new venture Global Media Production (formerly St Ives Direct Bradford), subsequently made one of just two offers for Prospect’s business and assets, initially offering £360,000 and then increasing his offer to £400,000 to be paid in ten installments of increasing amounts, through to August 2014.
The deal was agreed on 22 November and is subject to a personal guarantee from Dunstall, and a corporate guarantee from Cogent. The same guarantees apply to the security over rental payments for Prospect’s leasehold premises.
Prospect’s trade creditors were owed just under £500,000. Among the major industry creditors were equipment maintenance and kit supplier Continua, which was owed £87,624; Royal Mail £44,788; Xerox Finance £20,480; Carousel Envelope Solutions £13,928; Alfaplas £12,949; Ruskin Press £12,000; and Oce £11,357.
The administrators have estimated that there could be sufficient funds to pay a dividend to unsecured creditors, which are owed a total of £1.4m, although the estimated amount likely to be available is £62,828.
At the time of administration Prospect employed 150 staff, with 124 based in Leeds and the remaining 26 working out of the Bradford premises of Global MP because machinery at the Prospect site "was incapable of completing larger orders without significant repair work". The administrators made 67 employees redundant during November.
