The paper merchant, also known as Ebb Paper after its trading logo Mr Ebb, is owed 275,000 by the London SE25 company, after it was placed into administrative receivership last week. It is unlikely that it will recover any of the money.

Elliott Baxter managing director Tim Elliott said: We have seen it coming [the closure] for some time and had been working to reduce our exposure at the company.

The debt is fully provided for in our accounts last year. We are a very strong company. We had seen this coming and had prepared for it.

It is believed that Elliott Baxter does not insure itself against bad debt, preferring to build up close relationships with its clients.

Elliott said: Yale Press is a management buy-in that went wrong. Its as simple as that. When the present managing director Michael Bennett bought the company from the former owners he effectively remortgaged the equipment to pay for it.

It meant that a formerly solvent company became insolvent, almost overnight.

Elliott said there had been some talk of Bennett forming a new company, effectively a phoenix operation. If that happens we will not be supporting it, he said. But he refused to lay the blame for the collapse with Bennett himself. He was inexperienced. He lost a lot of staff and customers. Practically everything hes done has gone wrong.

The full list of creditors has not yet been released by Tenon Recovery, but it is believed that other paper companies have been hit, although for much smaller sums.


By Tony Brown