There is an update to this blog post in April 2013 here.
There is another update to this whole sorry Direct Fruit Supply saga re Michael Marcus, the MD growing cannabis and getting caught here 6th September 2013.
You heard it here first.
Second business in what, three months to have problems; first Bruce Oliver and now Direct Fruit Supplies (DFS).
I am pretty angry with Direct Fruits Supplies, Leeds, as I have been chasing our money fairly hard. The last time I spoke to someone in accounts, they said, ‘you haven’t been shouting loud enough’. I could not believe it and was hopping mad.
Today, I chased again, only to be told that the business was in a bit of a mess with its accounts and they were going to write to all the creditors to enter in to a CVA, but that the business was solvent and still trading. How do you know, I asked, if your accounts are in a mess? I was then bamboozled.
Here is a bit of info about CVAs:
A Company Voluntary Arrangement CVA is a procedure which enables a company to reach an agreement with its creditors about how debt is to be repaid. The CVA may provide for partial or full repayment depending on what the company can reasonably afford to pay.
Creditors do support CVAs if the alternative is liquidation with little or no return to creditors. The Proposal must, however, be reasonable and achievable.
A CVA can only be proposed by a company if it is insolvent or contingently insolvent. The CVA requires the approval of 75% of the voting creditors. If approved, the CVA binds all creditors irrespective of how they voted and allows the directors to retain control of their company.
A CVA aims to serve the best interests of the creditors while allowing the company to continue trading and to keep the work force in employment.
The are several components that are vital to a successful CVA proposal. There must be a business plan to return the company to profitability, in other words directors must accept there is a need for change. The proposal must be viable and be likely to be considered favourably by the creditors. Working capital in addition to a review of credit repayments need to be arranged.
Here is a response from Michael, the MD at Direct Fruit Supplies in response to the above:
Firstly thank you for letting us reply to the blog you’ve posted on us (Direct Fruit Supplies (Leeds) Ltd).
We completely understand your anger towards us – you feel exactly the same way we feel and have felt towards customers who either owe us money or fail to pay their debt to us.
The only difference being is that we do plan on paying our debt to you, this is the reason we have chosen to go into a CVA. We had been advised to ‘dump our debts’ and start a new business – effectively closing it on a Friday night and reopening on a Monday, same premises, same staff, same customers. We have chosen the somewhat harder route in that we have chosen to complete this CVA to return to our suppliers their money and in turn hopefully regain their understanding and support.
We were also completely appalled by what our (now ex) in house accounts lady said to you, not only was that totally unprofessional it was insulting as well and for that we can only apologise and hope you accept this apology as wholeheartedly as it is intended.
We also appreciate your comment of how do we know that our business is solvent and still trading if the accounts are in such a mess and the answer to that is purely down to the fact that we have loyal customers who are also supporting us through what has been an extremely difficult 8 months. This ‘situation’ all began back in September 2010 and whilst we don’t want to bore you with the details, basically our in house and external accountants were incompetent – both positions were immediately refilled with more dedicated and knowledgeable staff. Staff who we feel are better suited to the roles they are in and who are working incredibly hard to turn around this horrendous situation.
So, I hope that this puts across our side of the ‘story’/nightmare a little more. And we would like to reassure, not only Ribblesdale, but any of our suppliers reading this that we are doing everything in our power to continue trading to repay the debts. We would also like to reassure our customers that the family run business of Direct Fruit Supplies (Leeds) Ltd is going to be here for a long time yet and to thank them all for all their support and custom.
Many thanks and kindest of regards
Michael Marcus Managing Director Direct Fruit Supplies (Leeds) Ltd T: 0113 2670089 F: 0113 2300605 M: 0775 3570472 E: email@example.com