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Fabb Sofas ceased trading in June
DFS founder Lord Kirkham is the biggest single creditor of Fabb Sofas, the nine-store sofa chain he advised which ceased trading and entered administration last month.

 

A statement of affairs document signed by Gary Pitchford, one of eight Fabb directors at the time of its closure, reveals an investor loan of £10.7 million was the company's largest outstanding debt.


Lord Kirkham was not a shareholder in the business and the loan to the company was unsecured. His grown-up children — Julie Cross and Michael Kirkham — owned 60 percent of the business between them with other directors owning the majority of the remaining shares.


Fabb ceased trading June 7 after failing to find a buyer following an accelerated sales process initiated in May when it became apparent to decision makers that future funding was to be no longer available.


The company's 197 employees were made redundant, all bar eight on PwC's appointment as administrator. Employees claims total more than £430,000, with nearly £190,000 of that preferential claims that will be paid in full within six months.


Other than consumer creditors (see related), suppliers and landlords form the bulk of the remaining sums owed by the Fabb business. Premier, the Far East sofa maker, is listed as being owed four times as much as any other one supplier, with around a dozen UK and overseas sofa makers owed five figures or more (see related).


PwC cut a deal with six unnamed suppliers for them to contact consumers directly with a view to them completing outstanding orders. Supplier debts will also be mitigated through retention of title claims with some warehouse landlords agreeing for suppliers to collect their goods from their properties.


In all, Fabb assets could raise about £1.8 million. That would leave a shortfall owing to creditors of up to £37.3 million. This figure includes future landlord claims and about £400,000 owed to HMRC in VAT, though not money invested by shareholders, which totalled around £10.6 million.


PwC's report to creditors said it expects unsecured creditors to receive up to 2 pence in the pound. There are no secured creditors.


Related Stories
— Debt Report: Who was owed what by Fabb Sofas (Omnia)
— Deposits repaid to one in six Fabb customers with outstanding orders



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