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News 09.9.15

Insider Media: Collapsed PVCu windows maker enters liquidation

News 09.09.2015

A Hampshire-based PVCu windows manufacturer and installation company which ceased trading with more than 70 job losses has entered liquidation.

Dorwin Ltd had a turnover of almost £9m in its 2013/14 financial year and had traded in the Alton area for more than 40 years. John Dickinson, partner at accountancy firm Carter Backer Winter (CBW), was appointed as joint liquidator of the company, together with CBW director James Snowdon on 21 August. Dorwin entered liquidation after failing to gain the support of its major customers for a company voluntary arrangement (CVA) process, which could have ensured its survival, CBW said. On 2 July, the company embarked upon a CVA but by 28 July, it was unable to meet its obligations and ceased trading. “Dorwin’s problems culminated in 2015 as the impact of storms to the supply of a critical product from a sole supplier in 2013 snowballed,” Dickinson said. “The slow progression of projects together with increasingly long contractor payment terms and reduced levels of stock, put a squeeze on cash flow despite a strong order book.” He added that the combination of a delay to the petition being dismissed by the court on 16 July, along with restrictions imposed by NatWest on banking facilities during this period which prevented payments to suppliers or wages, resulted in a “fatal loss of confidence”. Orders and potential sales valued at £1.8m, which had been included in the CVA cashflow forecasts, were now lost. Prior to CVA approval, Dorwin’s tender receipts were about £2.8m. Since the CVA started, these receipts have totalled £96,000. Dickinson added: “When companies face pressure from creditors, in particular where it gets to the point of a winding-up petition, they must act quickly. As can be seen the repercussions can be fatal. “In this case, despite a workable and practical CVA, the damage caused by the freezing of the bank account and a period without trading was irrecoverable. If the company had acted earlier, there Is every likelihood that it could still be trading today.” The company’s value to creditors is more than £2.9m.

John Dickinson is Head of the Corporate Restructuring and Insolvency team at CBW.  To email John please click here or for more information please contact us.