Folkstone Fixings (FFX) placed into Administration

[Sideways]

I've just joined this forum & trying to find out, as a supplier to FFX, if I have to write off over £4k of stock supplied to them or if I can get back that which they haven't sold yet!!

Be proactive. Everyone else will be.
Review your contract terms as @AJB Temple says. This is important.
Contact the administrators as @Noel says. State what you are owed and assert your rights over your property if title is still yours.
The administrators are required to follow the hierarchy of claims over the assets of the business. They'll be scambling to get control of it, lock it down and understand the mess that they have on their hands. Staff have to be laid off with urgency, so there isn't a functioning business there any more just the administrators, some key staff kept on for now and a bunch of people possibly working out their notice but totally distracted by the need to find other jobs.

 

[Newbie_Neil]

I've just joined this forum & trying to find out, as a supplier to FFX, if I have to write off over £4k of stock supplied to them or if I can get back that which they haven't sold yet!! As a small manufacturer this is a massive hit to our turnover & cash flow. I will survive but it's going to be more tough years ahead

Hi, I'm sorry to hear your news. If you don't have a 'retention of title' clause on your invoices then you will, probably, get very little from the administration.
You need something like this on your invoices, 'Notwithstanding the other provisions in these Sales Conditions, XXXXX shall retain ownership and title to the Products delivered to the Purchaser by XXXXX until the Purchaser has made full and final payment of all amounts (including interest, costs and penalties) that it owes to XXXXX under all Agreements entered into ...'.
The above should do the job, but I would get a solicitor to confirm the wording that you need.

 

[mg123]

There are other threads on this forum highlighting how we are being ripped off by suppliers.
Sorry but we can't have it both ways. You pays your money and takes your choice.

It's the convenience, you pop to your local hardware store but they don't stock what you need. You ask for an order, and it's either met with "ooooooh it'll cost you", or "it could take a few weeks". There was a small local place to me, 10 minutes walk, who I would visit first for all my hardware and timber needs. They were small so you couldn't get everything, but they had good service and a decent range. But once they went bust, it had to be amazon for a lot of my needs. I'll generally use Screwfix, Toolstation or Wickes now. Big players here, but the options are limited.

 

[Amplidyne]

It's the convenience, you pop to your local hardware store but they don't stock what you need. You ask for an order, and it's either met with "ooooooh it'll cost you", or "it could take a few weeks". There was a small local place to me, 10 minutes walk, who I would visit first for all my hardware and timber needs. They were small so you couldn't get everything, but they had good service and a decent range. But once they went bust, it had to be amazon for a lot of my needs. I'll generally use Screwfix, Toolstation or Wickes now. Big players here, but the options are limited.

50 years ago, as a young chap, I lived in a medium sized Midlands town.
If you wanted anything more specialist than a Phillips screwdriver, at most places you would be greeted, as you say, with a sharp intake of breath, followed by "About a month's delivery" and usually a huge price. We used to go into Brum to get stuff, adn even then the choice was limited.
Now you can go on one of the many internet sites, and basically get pretty well anything delivered "next day"
Sorry and all that, but I'm going to the internet. . .

 

[Phil Pascoe]

We used to buy locally. One place shut for lunch 12pm - 1pm, two 12.30pm - 1.30pm, one 1pm - 2pm. By the time you found what you were looking for (if you were very lucky) you'd have wasted half your working day, although often you wouldn't have - you'd get the standard response, we can get it for you (at an exorbitant price) a week thursday. Along came Screwfix. Very limited forty + years ago but expanding by the month.

 

[Sideways]

For interest. This is from the .gov website summarising the hierarchy of claims on an insolvent business. Cut and paste without edit :

"Distribution of proceeds​

The rights of a creditor who holds a fixed charge on assets (such as a mortgage) to sell the asset to recover their debt are not affected by insolvency. The chargeholder is the first to get paid when the asset is sold. Any surplus will be handed over to the liquidator. When all the assets available to unsecured creditors have been realised, the liquidator will distribute the proceeds in a strict order of priority as follows:

• the fees and charges of the liquidation
• preferential debts, which include wages owed in the four months before the date of the winding-up order and contributions to occupational pension schemes
• any creditor holding a floating charge over an asset, such as a debenture
• all unsecured creditors
• the shareholders

Therefore, unsecured creditors will usually only be paid when the fees and charges of the insolvency procedures and the claims of secured and preferential creditors have been paid. Where a company which is being wound up has assets subject to a floating charge, part of the net proceeds from their sale will, in appropriate cases, be set aside for distribution to the unsecured creditors.

If full repayment of claims is not possible, payments are made in proportion to the value of each claim"

 

[Nick.]

Hi, I'm sorry to hear your news. If you don't have a 'retention of title' clause on your invoices then you will, probably, get very little from the administration.

The other very important aspect is to be able to reference which exact products are held on retention of title by way of serial numbers etc.

When Tewkesbury Saw sadly went into administration there were enough Laguna display machines in the showroom to cover the debt owed but those older display machines had already been paid for and noted by the administrators so we couldn't just turn up and take them.

I was once locked in a building by police along with a few other suppliers about 20 years ago - anyone remember Woodcut down in Worthing? - we turned up (in a surprise to them) due to substantial admin rumours straight after a big weekend show to get our stock back & they called police on us - which in fairness was a legal route for them, despite the fact they planned the admin timing to maximise supplier stock up & cash takings knowing they were screwing people out of goods. I was back in Metabo's HQ office the next week explaining on the phone to customers I had sold to face to face at the show why they wouldn't get their machines delivered and giving them the administrators contact details etc. - that was hard.

 

[AJB Temple]

Just in case no one realises this, you wont get far just looking at the accounts of FFX on companies house website. The actual holding company is Trupanon Topco Ltd and that lost £8.9m in the last filing year to 30/9/23 and £3.2m in the year prior. When you delve a bit, the controlling entity was an offshore hedge fund. The balance sheet of topco (but not the P&L) might look OK to the casual observer who got as far as finding the holding company, but there are somewhat opaque lending arrangements and totally opaque intra group transactions. The balance sheet is propped up pretty much entirely with goodwill. Which is an intangible asset. The snag with goodwill is it can vanish like a puff of smoke in a strong breeze.

Too late now but if I were to be a supplier I would not have provided credit to FFX. I always check the accounts of companies I take any risk with. For me this one had big red flags. Hopefully retail customers will be covered by their credit card operators.

If you don't understand the control structure of a business then you don't know enough to risk any money with them. The administrators might be able to sell the brand name, though negative publicity will have damaged it hugely.

This may be personal prejudice based on my background, but I also take the view with hedge fund controlled businesses, if I've never heard of the auditors then I steer clear.