Osmosis' battle to stay in business has ended with the appointment last week of administrators Pannell Kerr Forster (PKF).
The directors of the distributor applied to the High Court last week and PKF was appointed as the administrator on 13 May.
Osmosis was negotiating an informal arrangement with creditors to pay off most of its debt in the next four to five months, following its withdrawal from the hardware PC business at the end of April (PC Dealer, 5 May).
Sources suggested the company's debt was between £4 million and £5 million.
John Fenton, managing director of Osmosis, said: 'The main creditors knew it was a bold, positive initiative but the smaller creditors didn't support it. My job is to aid the insolvency practitioners in getting money back to creditors while ensuring other businesses are not affected.'
Eddie Pacey, credit manager at Ideal Hardware, told PC Dealer: 'It became clear from the balance sheet that an informal agreement was impossible.
The company had failed miserably in terms of credit management and a significant amount of the trade debt was uncollectable insolvent debt.'
Following the closure of Osmosis Technologies and the sale of the Irish operation to its management, Osmosis was running on a skeleton staff of just 19.
Des O'Carroll, OEM channel sales manager at Microsoft, said that because of the administration, Osmosis will lose its DSP status effective from 31 May when its contract runs out. 'I think things would have been different if Osmosis had been able to show it could trade its way out of debt,' he said.
O'Carroll conceded that the decision not to renew Osmosis' contract 'raises the opportunity' for candidates such as CHS Electronics and Computer 2000 to achieve DSP status (PC Dealer, 12 May).
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