M2, the Hampshire reseller whose two directors were disqualified last year, has filed for administration at the London High Court, after creditors issued a winding-up order on the company.
The Court appointed Pannell Kerr Forster (PKF) as administrator to the dealer on 21 June and it will proceed to sell the business as a going concern. According to sources, the administrator has already received two offers for M2.
On the day before M2 filed for administration - last Sunday - the reseller held a cut-price, cash-only sale at its Portsmouth premises.
A co-administrator for M2 was unable to confirm the level of the reseller's debt, but industry sources said it was in the region of £900,000.
They also named German notebook vendor Maxdata and CHS Electronics' components unit Karma as M2's largest creditors. They are believed to be out of pocket to the tune of approximately £700,000.
Datrontech's Summit Peripherals is owed £31,000, but according to Keith Payne, group credit control manager, the debt was insured.
Neither CHS nor Maxdata were available to comment as PC Dealer went to press.
Nitin Joshi, director at PKF, said M2's administration was symptomatic of a business with large overheads and tight margins.
Administration for the reseller comes almost one year after former directors Mick Brown and Sebastian Ballan were disqualified from being directors for eight and six years respectively (PC Dealer, 2 September 1998).
Brown was a former director of Diamond Computer Systems, the failed PC retail chain that went into liquidation in 1993, with outstanding debts of more than £3 million. Ballan was a director of Diamond's main creditor, Direction Technology.
The two later became directors at M2, while also directors of other companies including Ricewood and Marstom. Their wives, Joanne Brown and Julie Ballan are directors of M2.
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