VAR collapse triggers creditor waiting game
Creditors left guessing as new firm rises from ashes of Garingdell Systems Ltd
Struggling VAR Garingdell Systems Ltd has gone into administration after more than 20 years in business, leaving debts believed to be running into seven figures.
A statement from joint administrator, the accountancy firm Moore Stephens, said: "On 27 May, Steven Draine, a licensed insolvency practitioner and partner from Moore Stephens, Watford, was appointed joint administrator of Garingdell Systems Ltd, a company involved with the resale and maintenance of IT hardware products and components. As part of the administration functions we will be writing to all creditors of the company in due course."
CRN understands that the major creditors include Computacenter Distribution, ETC, Ingram Micro, Computer 2000 and Dell.
One creditor, who asked to remain anonymous, said it was 'doubtful' it would recoup any money. "The only way would be if the creditors got together and launched a case in the courts against the directors. I can't see that happening," he said.
However, in a surprise move, Moore Stephens confirmed that another company has already risen out of the ashes of the Berkshire-based VAR. CRN understands this firm will be known as Maypace Systems Ltd.
The Moore Stephens statement added: "The administrators have successfully implemented a restructuring strategy which involved a going-concern sale of the company's business to a third party investor."
All 36 employees have also retained their jobs, Moore Stephens confirmed.
Alastair Edwards, senior analyst at Canalys, said the only way for would-be creditors to avoid similar situations would be to reduce risk.
"Credit management is a balancing act and we are seeing a number of distributors rethinking credit facilities. The market recovered very well last year, and many resellers invested in new technology and in growth areas such as wireless and security. But the first quarter this year represented a downturn in the market and has probably left a number of these VARs overstretched financially, which leaves distributors at risk," he said.