Walter Smith suppliers owed £1m
The deal that rescued the jobs of 200 staff at West Midlands butchers Walter Smith has left a string of supply firms out of pocket to the tune of more than £1 million.
The so-called "pre-pack" deal saw management and directors buy the business out of administration, leaving creditors out of pocket, including the company's pension fund.
The boss of one creditor business in the Black Country fears jobs could be lost at some unpaid firms.
Harry Scrivens, of Scrivens meat suppliers in Quarry Bank, Dudley, is among those owed money by the Birmingham-based chain of butchers. "When we found out we stopped supplying them straight away," said Mr Scrivens, whose company supplied bacon and cooked meats.
"They had built up quite a few unpaid bills, saying they would settle them up later. We have supplied them for a long time and had no reason to suspect anything untoward."
He added: "There is also concern that these unpaid bills could push some of the smaller meat suppliers or abbatoirs over the edge. Anything up to 200 jobs could be at risk."
Brian Hamblin, corporate recovery partner at PKF accountants and business advisers in Birmingham, confirmed that around £1.2m was owed to outside creditors and £500,000 to other companies within the Walter Smith group. There was also a significant deficit in the pension fund, which he said was by far the largest creditor.
Mr Hamblin said: "It is inevitable that creditors will be adversely affected in a restructuring exercise of this kind, whose purpose is to keep the business going and to protect jobs. Letters have been sent to all the creditors outlining the position and a creditors' meeting will be held in December to give a fuller explanation."
Walter Smith has 20 shops in areas including Wolverhampton, Bilston, Brierley Hill, Dudley, Lichfield, Stourbridge, and West Bromwich.
