Creditor pressure forced Kinetics under
Plumbing and maintenance business Kinetics Group, which collapsed twice in the space of a month and left hundreds of people out of work in the region, was facing debts of more than £50m in the run-up to administrators being called in.
The business provided a 24-hour emergency service to more than 250,000 social housing properties, schools and public buildings across the UK and was registered in Sutton Coldfield.
But the group entered administration twice in the space of a month earlier this year after incurring "substantial liabilities" due to HM Revenue & Customs (HMRC) and its largest supplier.
Administrators from insolvency firm Zolfo Cooper were appointed on 9 June and subsequently sold certain assets to a new company called SCP Renewable Energy for £12.6m in a pre-pack deal.
But although the group continued to trade it ran into trouble again when housing clients pulled their contracts. There was also confusion regarding the solvency of subsidiary companies, delays in payments from key customers and from suppliers' refusal to continue trading with it after its credit insurance cover was removed.
Begbies Traynor was then called in on 13 July as administrators of SCP Renewable Energy and subsidiaries Sureway Gas, Kinetics Midlands and Kinetics South. The latter administration resulted in approximately 550 redundancies over five sites.
A new report published at Companies House has revealed Kinetics Group was facing considerable pressure from creditors in the run up to the first administration and subsidiary Seaflame had been issued with a £1.7m winding-up petition from HMRC.
Zolfo Cooper's update to creditors said the group collapsed owing Sovereign Capital £49m after the firm bought Kinetics' debt from Yorkshire Bank in April. It is now ranked as the group's only secured creditor.
The report added that HMRC was owed about £10m at the time of the pre-pack deal in June, while trade creditors were owed approximately £7m.
Kinetics Group was formerly known as DC Group and changed its name in 2006 following a management buyout. The business was founded in 1934.
