Ray of hope for creditors of bust £10m-sales VAR

Administrator says an unknown amount of funds will be available

Creditors of defunct reseller Hutchinson have been given a ray of hope from the firm's administrator, which expects a dividend to be available.

Hutchinson went bust last May, owing nearly £3.6m to unsecured creditors, including £2m to trade suppliers.

Distributors Arrow and Ingram were listed as the largest, owed £274,000 and £617,000 respectively.

In a report filed last year administrator KPMG said it was unsure whether unsecured creditors would see a return, but has now claimed it expects a dividend to be available.

In a document filed with Companies House, dated 6 December but only made available to view more recently, the firm said: "Based on current estimates, we anticipate that unsecured creditors should receive a dividend.

"We have yet to determine the amount of this, but we will do so when we have completed the realisation of assets and payments of associated costs.

KPMG said it continued trading Hutchinson's network operation centre for a month after it was appointed, after which it sold the business to Dublin-based PN21 for £50,000. In this month of trading it generated £225,000 in revenue.

All remaining staff were transferred over to the new company. Of Hutchinson's 109 staff, 94 were made redundant as soon as the administrator was appointed.

The firm also said that secured creditor Clydesdale Bank has been paid in full, from the £1.95m received from Hutchinson's debtors.

Preferential creditors are expected to be paid their £150,000 in full.

Hutchinson had harboured lofty ambitions in the year running up to its demise, having boosted its funding and received private equity backing.

But increased overheads meant it reported an EBITDA loss of £1.8m on sales of £11.1m for the year ending 31 December 2018.

The firm had been close to securing additional funding last year, and expected sales to climb to £17.5m if this had been the case, but the deal fell through.