A meeting has been called for 7 October 2011, at which creditors will be offered 44p in the pound. There is also a profit ratchet built into proposal to distribute 50% of excess profits over forecast to be passed on to creditors.

Reflections managing director Luke Hastings told PrintWeek that he had spoken to a number of creditors already and was hopeful that the proposal would be accepted.

He said: "I think 44p in the pound is quite a high figure for these type of arrangements, you don't always see that. I have already had good feedback; our creditors seem to be supportive."

Reflections' move comes after what Hastings described as the toughest of the company's 18 years.

"We had the stuffing knocked out of us between January and June," he said. "We were hit by £250,000 of bad debt. Every time a company appeared in PrintWeek pre-packing or going bust it seemed that we had supplied them.

"Around May time the banks started to make life difficult for us, then we got into arrears with HMRC. We tried to agree a Time to Pay agreement but they refused and said if we didn't pay them in two weeks they would wind us up, so we had to act."

The company has been the subject of widespread rumour for several months, with many in the industry speculating that the company would be sold in a pre-pack administration deal.

However, Hastings said that he did not want to go down that route.

"Hopefully it will be seen as refreshing, we aren't just pre-packing the company," he said. "We need some time to restructure the cost base of the business and we are trying to work with people. We are not looking to hide, not looking to do anything dodgy; we are just looking for people to give us a chance to get through this."

In total Reflections' creditors list totals £5m, with £1.3m owed to secured creditors and £2.6m to unsecured creditors and £882,000 to contingent creditors, which provide services or financial products.

A further £31,000 is owed to directors Paul Hastings and Luke Hastings.