Thu, 19 Jun 2014 | ADMINISTRATION
Heart of England Fine Foods (HEFF), which supports small food and drink businesses in the West Midlands, is set to enter voluntary liquidation.
Initially backed by the government, HEFF has created and secured over 2,000 jobs since it began in 1998.
The company is now preparing itself to enter liquidation after it lost a contract with Shropshire Council three years early as well as suffering sluggish trading.
The contract was for running the Shropshire Food Enterprise Centre, promoting local foods, HEFF said. While a council review had discovered it had been “paying an excessive amount of money”.
The situation is also attributed to expected funding, allocated in January, “not materialising” from a government department to back HEFF’s international work efforts.
As a result of liquidation 15 jobs will be axed, but it may impact hundreds of other jobs in the food and beverage sector that were reliant on HEFF’s support.
The company is still financially healthy, but is trading at a loss. HEFF’s directors said: “We do not genuinely expect we will be able to trade out of our current financial difficulties in the short term.”
To avoid the possibility of entering Wrongful Trading the business has little choice but to enter voluntary liquidation.
“While over the next quarter, we would have liked to wind the business up ourselves unfortunately, this is not feasible due to cash flow issues,” they added.
A liquidator is due to be appointed after a shareholder meeting on 9 July. The directors are hopeful that a solution can be found before then.
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