Cash-flow difficulties to blame?
Rock Group Plc, a specialist notebook manufacturer based in Warwick, was once ranked as one of the UK’s fastest growing privately owned firms. After some 16 years of business, the company has now declared that newly appointed administrators, Dominic Wong and David Langton of Deloitte & Touche LLP, "are working closely with the management of Rock to attempt to secure a sale of the business as a going concern".
In an official announcement, Rock blames its failure partly on a former unnamed employee who is said to have created cash-flow difficulties as a direct result of stock misappropriation. As a result, Rock states that it had effectively ceased trading prior to the appointment of its new administrators.
Dominic Wong and David Langton are said to have kept a 'skeleton staff' whilst making attempts to sell the business and its assets at the nearest opportunity. In the meantime, Rock warns that it is "unable to maintain normal trading activities during this interim period, including fulfilling sales orders and undertaking service and warranty work."
The troubled manufacturer has provided the following warning to customers:
Equipment should not be forwarded for repair or warranty work at this time pending clarification of whether a going concern sale of the business has been achieved.
If a going concern sale is achieved
If a sale of the business and assets as a going concern is achieved, a purchaser of the business is likely to wish to fulfil outstanding sales orders, recommence service activities and complete warranty work.
If a going concern sale is not achievable
Should it not be possible to achieve a going concern sale of the business and assets the business will close. Rock will be unable to fulfil outstanding orders and current and future service and warranty work. In this eventuality:
• Should you have recently ordered and paid for equipment that has not been supplied, you will rank as an unsecured creditor. If your payment was made by credit card, you may be able to obtain a refund from your credit card issuer.
• In relation to warranty work, we understand that Rock maintained an insurance policy to cover the extended period of the warranty (years two and three following purchase). This policy did not cover warranty work arising in the first year following sale.
• In relation to the insurance backed period of the warranty (years two and three) we are currently liaising with the insurance company for confirmation of how they wish to handle claims arising.
• In relation to claims arising in the first year of the warranty, any claim / costs incurred represents an unsecured claim. If the equipment was purchased by credit card, it may be possible to obtain reimbursement from your credit card issuer.
Are you an owner of a Rock system? Are you suffering from sales, support or warranty issues? We'd love to hear your thoughts in the HEXUS forums.
HEXUS.channel editor, Scott Bicheno, will be bringing more news on this as we get it.
Source: rockdirect.com
