Bespoke furniture manufacturer Showcase Limited has been sold in a pre-pack deal following its administration.
Andrew Pear, Richard Keley and Suzi Andrews, of Moorfields Advisory, were appointed as joint administrators on 23 May 2022.
Detailed in administrators’ documents, Showcase was trading profitably until the last two years when projects were either cancelled or postponed due to the Covid-19 pandemic. This resulted in six redundancies back in August 2020 as the company looked to reduce costs. It posted losses of more than £176,000 during 2021, with turnover at £1m.
In addition, the business fell behind on debts owed to the HMRC at £276,000, while also beginning to accrue rent arrears, totalling £120,000. Despite the business picking up during 2021, it was insufficient to sustain the company’s operations.
Furthermore, the business had to relocate from its Guildford premises after the landlord embarked on a full refurbishment project, which required them to leave. Showcase was not in a position to cease its operations and find alternative accommodation.
After discussions with the landlord to surrender the premises, in turn for all outstanding and future liabilities owed by the company being written off, Showcase relocated remaining stock to a facility in Petworth.
Administrators said: “We considered the underlying business to be profitable based on a lower cost base, however, it was not appropriate to continue to trade in administration.
“It was therefore considered that an accelerated marketing process followed by a pre-packaged sale would likely achieve the best outcome for creditors and avoid significant redundancies and associated claims from employees.”
The administrators completed the sale of the business and assets to Showcase Design Limited, a connected company owned and managed by Christopher Ezzard, for a total sum of £100,000.
Of this fee, a sum of £60,000 has already been received with the balance to be paid over two monthly instalments.
Administrators said that the pre-pack sale was the best outcome for creditors than if the company had folded, while also confirming that it would allow a secured distribution to be made to Lloyds bank, owed £50,000, and the HMRC.
It is understood that Lloyds will receive a distribution that will reduce the indebtedness to £42,000. Other creditors included Funding Circle, owed £215,000, Barclays Bank, owed £20,000, and Santander, owed £21,000.