Administrators for electrical distributor Bridisco Group have written to retailers telling them to pay ‘in full’ for new goods regardless of anything they might be owed.
Ernst and Young the administrators for the group, also known as the British Distribution Company (BDC), wrote to suppliers on 24 November following the firm’s collapse on 21 November.
The letter said the firm is continuing to trade “as normal” but went on to ask retailers to: “Confirm all goods and services supplied … will be paid in full without deducting or setting off any monies you may be owed.”
In other words write off any outstanding claims for damaged or returned goods, a request, that not unpredictably, hasn’t gone down well with the trade. This is a shocking way in which to handle such matters, effectively asking retailers to pay twice for goods that should have been returned or that were faulty. It is a shock as the Sale Of Goods Act applies to trade sales as well as to consumers and, if the goods were deemed as being not fit for purpose then the buyer has a claim against the seller. Since there is virtually no chance of being refunded for these goods then withholding payment for them is the only option and the one that we would suspect most retailers would take.
If this policy is enforced it may well cause other businesses to come under threat and seems poorly thought out on the part of the administrators. We would suspect that most retailers that have returns or credits due from BDC will simply tell the administrator to take them to court and argue the case in front of a judge.
A spokeswoman for Ernst and Young was tight lipped on their plans for the firm, refusing to be drawn on whether it was being sold as a going concern or split up. She also declined to comment on what firms, if any, had displayed an interest.
Meanwhile, Outkey Distribution Limited trading as 247 Electrical and through the website www.247electrical.co.uk was forced into administration as a result of Bridisco’s collapse.
A statement from the firm read: “Following a major supplier entering administration, the company has had to cease trading.” Begbies Traynor, of Brighton, has placed the firm into creditors’ voluntary liquidation.
No doubt these companies have been adversely affected by the current trading conditions and, probably, by the removal of trade insurances on debts.
But they aren’t the only ones being affected like the large media grabbing company failures such as MFI and Woolworths.
We have heard that kitchen cabinet maker, Bernstein, which entered administration a few years ago is apparently once again in the hands of a receiver.
Mark 2, a kitchen supplier to MFI has announced that up to fifty staff are to be laid off.
And, we hear that Delphi Distribution, an appliance and kitchen distributor based in Bonnybridge, Central Scotland has also entered into administration.
It seems that almost daily companies are entering administration with the most at risk, or so it seems, being those that are directly linked to the building or new kitchen side of the business although there are notable exceptions from that arena also being adversely affected.