A new company has been formed from WEEE recycling firm Reclaimed Appliances Limited through a Pre Pack process after the company went into administration last month.
The new company, Reclaimed Appliances (UK) Limited has been created after the former companys directors Robert Truscott and Sarah Truscott bought the assets including the rights, plant, machinery and stock – for a total of 260,002.
Following the sale 25 employees transferred to the new company while a further 57 were made redundant prior to the original company entering administration.
The Lincolnshire-based firm went into administration on April 24 2012 and put its difficulties down to some export problems. Administrator Bridgestones of Oldham was approached by Reclaimed Appliances on March 14 2012 and following a meeting Joint Administrators Robert Cooksey and Jonathan Lord were appointed.
Commenting on the creation of Reclaimed Appliances (UK) Ltd, Robert Truscott told letsrecycle.com: We were a very small family run business and we were growing every year. We tried to hold on but we couldnt. We have now committed ourselves again after a lot of discussions and have committed our own personal money and bought the assets back at a much higher price as what we wanted to do was act in the best interest of our creditors.
Pre pack
After consultation with the administrator it was decided that a Pre Pack administration process was the best route to take. A Pre Pack administration is a way of selling a business to a third party or the existing directors. This method can mean that the business and assets are sold but not the actual company and one advantage of this can be the continuity of the business.
A letter from Bridgestones to creditors explained: This was considered to be the best option in view of the offer received from Reclaimed Appliances (UK) Limited, as the company was under pressure from its landlord to vacate the premises and was at risk of its stock being seized.
Contracts
Reclaimed Appliances claimed it had lost contracts following an investigation by the Environment Agency. By 2010 the company had set up a recycling plant in Hong Kong. It approached the Prison Service in the UK to employ certain prisoners on day release to carry out the first stage of recycling before materials were sent for further processing at the Hong Kong plant.
In August 2010 Reclaimed Appliances had two of its shipping containers impounded by the Agency under the allegation of shipping illegal waste. The company denied any wrongdoing and was later told by the Agency that it would not be charged with any offences.
Mr Truscott claimed that by this time the companys reputation had been damaged and its largest contracts had been taken over by its main competitors, costing it hundreds of thousands of pounds and forcing it to close the Hong Kong plant and cease the contract with the Prison Service.
The letter from Bridgestones explained that by spring 2012 the company was falling into arrears with trade and crown creditors which led it to seek financial advice resulting in its administration.
Sale
The total figure paid for Reclaimed Appliances assets was 260,002 – 215,000 for plant and machinery, 45,000 for stock and 2 for goodwill and intellectual property.
The sale agreement is subject to a retention title clause which means that the assets will not pass to the buyer until the payment has been received in full.
Reclaimed Appliances (UK) Ltd is located at Warboys Industrial Estate in Huntingdon, Cambridgeshire. Mr Truscott said that the former company was in the process of relocating to the premises prior to the administration process.
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