Pickfords sold in pre-pack to offload pension liabilities
BDO administrators sell Pickfords to management to offload its defined benefit pension
REMOVAL FIRM Pickfords has shifted its defined benefit scheme off its balance sheet through a management buyout following a prepack administration which took place at the end of November. Unsustainable pensions obligations and the economic climate were the reasons stated for the administration.
BDO partners David Gilbert and Danny Dartnail were appointed joint administrators, and they sold the firm back to directors Yogesh Mehta and Timothy Romer, Accountancy Age’s sister publication Professional Pensions reports.
A pre-pack administration entails the whole or part of a sale arranged prior to a business entering an insolvency process and sold immediately on appointment of administrators.
As a result, the firm’s pension obligations have been removed, but all of its 900 jobs have been preserved.
Administrators could not confirm if the Pensions Protection Fund (PPF) has been informed of the insolvency and subsequent pension scheme liabilities.
Usually, once notified, the PPF would undertake a validation of the scheme which could take 28 days or more.
A spokesman for the administrators said the pension obligations threatened the future viability of the business.
He added: “With the transfer of the business to the new company, the unsustainable pensions obligation has been removed, allowing the business to move forward on a secure financial footing.
“This was the only option available to ensure the continued viability of the business and preserve jobs.”