Moorhouse & Mohan has been placed in administration after a costly legal battle left the company facing unmanageable six-figure bills.
Shareholders placed the fresh produce supplier into voluntary administration yesterday (20 September), with meetings scheduled for this week to discuss the future of the business.
A spokesman said it was too early to say whether the company would continue to trade, or what would happen to the 50-60 members of staff. He emphasised, however, that Worldwide Trading Team and The Worldwide Farming Partnership are continuing to trade normally.
Moorhouse & Mohan’s struggles centre around two ongoing legal cases, one involving Barts in Belgium and another with Ambient of Israel.
According to the company’s most recent accounts, for the period from 1 January 2013 to 30 June 2014, Moorhouse & Mohan was involved in a contractual dispute related to a claim from one of its suppliers – understood to be Barts – for failing to take delivery of produce from early December 2012 until March 2013. Directors said an initial non-binding arbitration was held and the amount determined was “£172,491 in excess of the amount included within creditors.”
Moorhouse & Mohan made a counter claim of £393,000 over quality issues related to the produce, with both parties challenging the non-binding arbitration.
A spokesman told FPJ that a second case, related to the Israeli supplier, involved some £80,000 of liability.
“Neither case has been finalised but the costs of continuing to contest matters cannot be justified in the present trading environment,” he explained. “In both cases the directors feel that the company’s position is fully justified but the company does not feel it is in the interests of creditors to continue.”
He added that the company faced a legal bill of in excess of £100,000 to fight the cases, without the certainty of an appropriate return, and therefore the decision had been taken to place the company into administration.
A further factor in the struggles of the March-based business, which has an annualised turnover of £22.3m, has been the difficult trading conditions in the fruit and vegetable sector generally, the spokesman added.
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