Collapsed builders’ merchants A Thompson & Sons will not be able to repay a £1.6m debt to the brother of the former managing director who bought his 50% stake in the firm five years ago, an administrators’ report shows.
KPMG was called in to the business and sister company TAPS (Thompson Associated Plumbing Supplies) plumbers merchants, based in Hendon, Sunderland, in March after the firm fell into difficulties after two years of losses.
Managing director Anne Ganley, the daughter of the firm’s founder Albert Thompson, had hoped to save the company but a winding-up petition from HM Revenue and Customs forced it into administration.
Weeks later KPMG announced the sale of the businesses and certain assets to Grafton Merchanting GB Ltd and a progress report lodged by the administrators in Companies House has revealed the amount received for the sale of the business and certain assets from Grafton totals £752,000 – a 10th of the firm’s turnover a decade ago – and that unsecured creditors are likely to be left empty-handed.
The report, by joint administrators Mark Firmin, Howard Smith and Paul Flint, shows the estimated value of unsecured creditors is £5m, but states they don’t anticipate any distribution will be paid out “including by way of a prescribed part”. It also shows that Albert Thompson, Anne Ganley’s brother, has a debt due from the company – renamed ATS Realisations Ltd by KPMG – of around £1.6m but that “it is anticipated that Mr Thompson will not receive a distribution in respect of his debt.
Thompson ran Thompsons Building Centres alongside his sister Anne for more than 25 years until April 2008, when his sibling bought out her brother’s half of the business, after they decided the deal was the best way to accommodate their different approaches to business.
The document also tells how the administrators sought to continue trading, but that it swiftly became clear that this would not be possible, as stock levels were so low and after two days of trading just £12,118 was taken across the firm’s stores. A deficit of £5,000 was recorded over the two days and KPMG took the decision to cease trading.
The company was also owed £1.59m by debtors when it ceased trading and it is still owed £973,000, a figure book debt collectors said it does not anticipate collecting in full.