Staff made redundant after food business JC Rook & Sons went into administration last month were owed some £201,600 in wages, pensions and accrued holiday pay.
JC Rooks closed its 11 shops and factory sites, including in Ramsgate and Broadstairs, last month leaving 135 people without jobs. A further two employees stayed on to help administrators but have also since been made redundant. Staff were only told of the shock business closure the night before.
The firm went into administration owing more than £2million.
Documents published by joint administrators Neil David Gostelow and William James Wright of Interpath reveal that there are also more than 150 traders who are still owed money, including Thanet firms:
- Crusties Bakery in Broadstairs which is £4,357 out of pocket,
- Elec Sec Ltd from Ramsgate owed £931;
- Epos Group in Ramsgate owed £5,316;
- Kent Coffee Company based in Margate owed £3,055;
- Morgan Jones recruitment agency in Broadstairs owed £5,229;
- Miles & Barr/Pearson Gore in Ramsgate owed £12,832;
- Pioneer Quality Services in Ramsgate owed £1,594;
- SCS in Margate owed £25;
- Stonaco Fabrications Ramsgate owed £2,404;
- Thanet Commercials owed £1,295;
- Thanet Drainage owed £732;
- Thanet Waste owed £293;
- United Lift Services Ramsgate owed £438;
- Viking Heating Broadstairs owed £216.
The total, owed to around 150 businesses with almost half of those based in Kent is £1.07million.
On top of this there was £166,000 owed to Lloyds which has been recouped and £559,000 owed to the Financial Services Compensation Scheme and HMRC in relation to VAT, PAYE, employees’ National Insurance contributions (‘NIC’) and Construction Industry Scheme (‘CIS’) deductions.
This brings the total debt to £2,001,237.
Employees will be paid first but how much they get will be dependent on asset realisations, say the administrators.(Update) However, it is understood staff have been, or will be if still on notice period, paid out of government funds.
Administrators say all others owed money are ‘highly unlikely’ to be paid.
Operating loss
The administrators’ report says from May 2021 to January 2022 JC Rooks (and associated company Henry & Joseph) had revenue of £8.3million but an operating loss of £0.3million. The company also had an unsecured Coronavirus Business Interruption Loan Scheme with Funding Circle of £200,000.
The report says: “The company’s trading difficulties in the retail business began with the onset of the Covid-19 pandemic in 2020. With strict government measures in place, the company was unable to operate at pre-Covid levels. This was due to lower footfall on high streets and restricted numbers within stores to comply with social distancing.
“The directors made the decision to grow the food service side of the business from the Ramsgate site in summer 2020 and further expanded this through operations in the Shoreham site in May 2021. The company invested in both the sites to allow these operations to commence but were running with a very high cost base. The food service business was also impacted by Covid-19 as a result of customers (both wholesale and retail) having reduced supply as they were either closed or operating on a restricted basis.
“As a result, the company did seek government backed emergency funding in late 2020 and took out a Coronavirus Business Interruption Loan Scheme for a total of £200,000 to help the company with its cash pressures.
“Although the company saw improved trading in late 2021, the emergence of the Omicron variant of the Covid-19 virus impacted what is usually a peak trading period for both businesses over Christmas. The company usually builds up cash reserves over this period to allow them to continue trading through the quieter months between January and March. As a result, although the directors implemented a cost saving plan in early 2022 to reduce the impact of the poor trading over Christmas, they made the decision to seek legal and professional advice in March 2022.
“Following this, the Directors took the decision to close the company’s eleven retail stores and cease operating at the two foods sites.”
Trade ‘exceeded pre-covid levels’
Angry staff have previously said debts were accrued recently with a change of management and the last accounts for JC Rook’s said: “Since the end of lockdown, the food services element of the business has returned to and actually exceeded pre-Covid levels of activity.
“In the meantime the company has seen an increase in its retail trade outlets due to customers shopping more locally. This has been further bolstered by the company offering home delivery from each of these outlets. This service was launched to reach even more of the local community, particularly those who have been unable to leave their homes, and has been particularly well received.
“In addition to the increase in retail trade the company has seen a sharp rise in demand for their online offering particularly in the first few weeks of the pandemic.”
Assets
The company held five bank accounts with NatWest and £98,409 was transferred to the Joint Administrators’ bank account following appointment. Some £69,800 was raised from plant and machinery and just £12,250 from stock due to its ‘perishable nature.’
The Interpath report adds: “We are reviewing the affairs of the company to find out if there are any actions which can be taken against third parties to increase recoveries for creditors.
“In this regard, if you wish to bring to our attention any matters which you believe to be relevant, please do so by writing to George Berridge at Interpath Advisory, 5th Floor, 130 St Vincent Street, Glasgow G2 5HF, United Kingdom.”
Fees for Interpath up to 8 April 2022, are £173,159.75. These represent 415.05 hours at an average rate of £417.20 per hour.
Interpath say the most likely outcome will be dissolution of JC Rook & Sons.
I suspect that Rook’s were having financial problems well before Covid reared it’s ugly head but the arrival of the pandemic was the last straw.
Such a shame, a great butchers, used them often and they are missed.
Typical, banks get paid but loyal staff don’t
i suppose thats where the expression getting ” rooked ” comes from ?
The directors managed to take large sums out of the company before it went bust.
This should be illegal and should be taken off them.
There seems to be no mention of customers that have paid money onto there Christmas savings card.Rooks was still excepting payments into this scheme in March.
As a Rook family member who’s husband, father-in-law and brother-in-law started the business in 1965 and has been closely involved ever since I would like to say we are all utterly devastated for what has happened to the staff and loyal customers. We became known for our good friendly service and quality products. Things all started to go wrong as the .Rook family members retired and sold their shares to outsiders who quite patently were poor business people (their record at companies house is evidence). Their is a lot of misinformation in circulation. I, personally, am so angry that they owe suppliers so much money, they used our good name to get so much credit, disgraceful!
Just a comment on the demise of probably the best butchers in Kent ROOKS.Itappears that what monies were left in the business was eaten up by the administration of Interpath at £417+an hour costs they bled what was left of Rooks white , sury a government run administrator should be brought into context to help these companies suffering financial jeopardy at a lower cost than £417+an hour then to be told your bankrupt , very helpful ,I think not .