Michael Mayes, which was put into administrative receivership by Barclays Bank on 3 March, is understood to be the biggest company affected by a decision that many claim will lead to the loss of thousands of jobs.
The receiver, Lindsay Denny of the accountants Touche Ross, said last night that if an immediate rescue could not be arranged, he would have to shut the company and sack the workforce or risk being personally liable for about pounds 200,000 in wages and holiday pay. Directors say they are 'moving heaven and earth' to arrange a management buyout because they fear a sale cannot be completed before next Tuesday, the effective 14-day deadline as strictly interpreted by the court.
The problem has been caused by last month's court decision that receivers and administrators will have to honour employees' contracts in full if they keep them on while trying to preserve the business. To change the contracts, they must be renegotiated within 14 days.
The threat to the Mayes group, which has a turnover of about pounds 2.5m and is seeking investment, comes as the Society of Practitioners of Insolvency is calling for urgent changes to the law.Reuse content