Eighty-one jobs are to go in east Belfast after a printing company stopped trading after just five months in business.
The directors of C & R Print, which was set up in October, closed the Alanbrooke Road business on Friday.
The company bought the assets of Graham & Heslip in a pre-pack administration deal three months ago.
Graham & Heslip, which traded from the same premises, went into administration on December 2 after 83 years in business.
Two weeks later it was bought for £100 by C & R, which had been set up by Diarmuid McGarry, managing director of Graham & Heslip, and Adrian Glenn, director of Impression Print & Design.
However, it has emerged that suppliers owed large sums of money by Graham & Heslip refused to do business with the new company.
Insolvency practitioner John Gordon of Napier & Sons, who is advising the directors, said: “It is a very unfortunate. The new company bought the assets of Graham & Heslip and took over all its employees. But suppliers of Graham & Heslip refused to do business with them and effectively blackballed them.”
Mr Gordon said he had looked at the possibility of making around 40 of the workforce redundant and continuing trading but said an increase in the cost of paper was “the final straw”.
He said he was filing papers to enable the company to petition the court to go into liquidation.
It is understood the company owes around £900,000, including £500,000 in redundancy, pay in lieu of notice, arrears of wages and holiday pay.
The wage inspection team of the Department for Employment and Learning is expected to go into the company premises tomorrow to carry out an inspection.
The directors are also understood to have given personal guarantees over the lease on the Alanbrooke Road premises and over some of the machinery.
David Kerr, the chief executive of the Insolvency Practitioners Association, said the failure of C & R Print demonstrated the potential problems of a pre-pack arrangement.
“Pre-packs or any sale in administration can be a useful means of rescuing good bits of a company and of ensuring the preservation of jobs. But any pre-pack company, whether its management are the same as the old company or not, can only get going if the suppliers will do business with them. That hasn’t happened here.
“But at least an attempt is made at a rescue. If a pre-pack company goes into liquidation, employees and suppliers may be no worse off than if the original company itself went into |liquidation.”
Graham & Heslip went into administration owing £3.1m to unsecured creditors with the largest debt of £790,370 owed to McNaughton Paper.
Suppliers interviewed by the Belfast Telegraph hit out at the sale to C & R. One said: “The suppliers caught up in this mess have been left high and dry.”
First Minister Peter Robinson attended the opening of Graham & Heslip’s renovated £2.5m premises on Alanbrooke Road just two years ago, where he was met by Mr McGarry and chairman Ken Cleland.