Beleaguered soft-fruit group AMS-WellPict European is going into administration.
As reported by freshinfo last week, the company has been battling cash-flow problems and has now filed notice of intention to appoint an administrator. No administrator has yet been assigned.
Jon Sopher of business-turnaround specialist MayBinghamSopher had been working with the organisation to find an alternative way out. He told freshinfo: “We have been trying to put a solvent solution in place by talking with the banks but we have been unable to do that. The notice of intention was filed last Thursday and the company has been continuing to trade. The intention is to continue to trade once administrators are appointed.”
Administrators will try to realise as much as they can from the firm in order to pay unsecured creditors but Sopher, who has previously been a director on the board of fellow soft-fruit firm S&A Produce, admitted it is “a distinct possibility” that many of them will not have their debts repaid in full.
These debts are estimated by trade sources to run into millions of pounds and are shared among disgruntled suppliers to the firm, which span three continents. One source told freshinfo that some Spanish growers supplying the group are owed payments dating back to December 2008.
Mike Parr of Perishable Movements Ltd, a creditor of the group, is extremely dissatisfied with the way the group has managed its cash-flow problems. He told freshinfo: “I have been lied to and told cheques are in the post when they have not been. When they have turned up some time later, the dates made it clear they had not been posted when I was told they were. I have been totally disgusted with the way this has been handled.”
Parr said the danger is that the demise of AMS and WellPict European will bring other, smaller firms down. He told freshinfo: “It won’t bring us down as their debt with us is not that large, but the directors knew what was happening and did not give us the opportunity to trade with them or not. It is unfair. They should not be able to carry on trading.”
WellPict European was able to use the WellPict name on revocable licence issued by WellPict Berries in the US to AMS. Legal counsel for WellPict in the US, Jim Thompson, told freshinfo: “The relationship between the US and UK companies was not a direct one. Some credit was extended by WellPict Berries and the licence provided to AMS. We are waiting to find out more about the financial situation of AMS, as clearly there is a value to the WellPict name in Europe.”
Meanwhile, some members of the industry say it has come as no surprise. One industry insider said: “The business had poor leadership and weak management. The whole set-up was a house of cards that was set to fall and now it has. They pulled the wool over the eyes of key clients and now their chickens have come home to roost.”
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