Freedom Technology goes into liquidation

Midlands-based firm cites loss of two major client contracts as reason for its demise

The bleak economic backdrop has claimed another victim in the shape of west Midlands-based VAR Freedom Technology Solutions, which has gone into voluntary liquidation.

Channel sources understand the Cisco, Webroot and Kaspersky VAR laid off its 16-strong workforce at the end of last month without paying their final month’s salary.

Birmingham-based insolvency practitioner, Sanderlings LLP, was appointed as the company’s liquidator on 14 March.

According to documents filed with Companies House, in the 12 months to 14 March 2011, the firm made a loss of £45,000 and had a turnover of more than £610,000. Conversely, during the previous year, the firm made a profit of more than £203,000.

The company’s creditors meeting report reveals the company lost a number of “large and small contracts” over the last 12 months because of the economic downturn.

However, it was the loss of two major client contracts in December 2010 that resulted in the company seeking the services of an insolvency practitioner.

The document states: “One of these customers announced that they had invited other companies to tender for their ongoing business and we had been undercut and lost the work.

“Our largest client then advised us that they were facing substantial financial hardship and needed to make immediate cuts in all areas of their business and their IT spend reduced to less than half the previous amount.”

Ian Moyse, EMEA channel director at Webroot, said the case was symptomatic of the financial pressures most resellers are finding themselves under.

“Resellers are feeling the pressure from all sides,” he explained. “There’s the economy, the public sector cutbacks, customers delaying payments and suppliers becoming stricter on collections.

“They need to take stock and plan for change and take action on that path, because doing what they always did will no longer bring the same results.”