Insolvent car sales firm faces wind-up
A prominent Northern Ireland car business could go into liquidation within weeks after borrowing heavily from one of its sister companies.
Prentice Cars, which is based at the Armagh Road in Portadown and has held a franchise to sell Suzuki vehicles since 1990, ceased trading late last month with the loss of 10 jobs.
It was run by Paul Prentice, the third generation of a family of car dealers operating in Northern Ireland for more than three decades.
The Prentice BMW and Mini operations at Carn Roundabout in Portadown, run by David Prentice Jr, are unaffected.
A meeting of Prentice Cars' creditors is due to take place at the offices of Belfast business advisory firm Harbinson Mulholland later this month.
A spokesman for Harbinson Mulholland said that the meeting would take place "with a view to putting the firm into liquidation".
Accounts for the year ended 2009, filed in September 2010, showed that an investment by Prentice Cars in a subsidiary company, Paul Prentice Properties Limited, was fully written off resulting in a loss after tax of £389,777.
The write-off, described in an independent auditor's report as "exceptional" meant that liabilities exceeded assets by £236,188.
The report said that Prentice Cars met its day-to-day working capital requirements through an overdraft facility which was due for renewal on June 30, 2011.
In addition, it said the firm relied upon the support of a connected company which was owed £282,820 as of December 31, 2009.
The company took advantage of an exemption in financial reporting standards from the requirement to produce a cash flow statement, on the grounds that it was a small company.
The total amount of creditors for which security was given amounted to £874,037.
One of two company directors, Esther Prentice, resigned in March 2011.
The other director and company secretary was Paul Prentice.
As of December 31, 2010, there were three shareholders in Prentice Cars - Paul Prentice, the Prentice Pension Fund and Ardlocke (NI) Ltd, another Prentice family company.
Ardlocke held 300,999 shares, the Prentice Pension Fund held 121,500 and Paul Prentice held one share, amounting to £422,500 in total.
At the end of December 2009, a report showed that creditors of Paul Prentice Properties were owed over £4m, with losses of just under £2m.