Cash blow for DCA creditors

Creditors stand to lose over £1m following the demise of networking reseller Data Communications Associates last month.

Creditors stand to lose over £1m following the demise of networking reseller Data Communications Associates (DCA) last month.

The curtain fell on DCA when it agreed to enter into voluntary liquidation after a meeting with creditors, which include 3Com Europe and Computer Sciences Corporation (CSC). Bristol-based accountancy firm Baker Tilly was appointed as liquidator.

"There will be payments made to creditors, but not the full amount," said Cedric Clapp, business recovery partner for Baker Tilly. "All customers should have been dealt with by receivers unless they are owed money."

The shortfall to trade creditors will be over ?1m, with just £132,000 available to cover debts of £1.168m once preferred creditors, such as the Inland Revenue and employees, have been paid.

DCA's downfall is a sad ending for a company which two years ago was described by John Redwood, former shadow trade and industry secretary, as a UK technology leader. In 1998 DCA won a £12m contract to support network hardware and software for 3Com and was trading profitably until September 1999.

The company said that a number of factors were responsible for its business downturn, including the adverse affects of the millennium bug. More damaging was the loss of a lucrative maintenance contract with CSC in the first quarter of 2000, a matter which is now in legal dispute. CSC declined to comment on the issue.

DCA's business downturn was worsened when retail chain Asda said that it would not be awarding it any further business following poor performance on existing contracts.

According to Dirk Bosmans, director for Europe, Middle Easy & Africa reseller sales at 3Com, DCA customers will be provided with support. "We will facilitate a relationship with a new 3Com reseller and will help the end-user as far as possible," he said.