Springdale Group’s administrator denies conflict of interest

Accountant Grant Thornton has rejected accusations it is unsuitable to act as administrator for the troubled Springdale Group.

Springdale’s former chairman and group founder Clifford Spencer said there was a conflict of interest in Grant Thornton’s appointment as administrator.

“Grant Thornton has had a material relationship with the business for four years. They shouldn’t have accepted the appointment.”

Springdale Group had received over £200,000 of consultancy work from Grant Thornton since December 2002, Mr Spencer added.

Springdale group entered administration on 4 April after prolonged cash flow problems. The Group, which developed contracts for non-food and fuel crops, began to founder earlier in the year, leaving significant debts to farmers and growers.

Springdale Group is believed to have bank debts in excess of £5m, with an additional £660,000 owed to farmers, seed merchants and hauliers.

But Joe McLean, one of two Grant Thornton partners handling the affairs of Springdale Group, Springdale Crop Synergies and Springdale Farm Ltd, denied any conflict of interest, adding that his firm was acting well within industry codes of practice.

“The appointment of Keith Hinds and myself as joint administrators of three companies within the Springdale Group was made by the group’s banker and filed in the High Court in Leeds on 4 April 2007.

“The Group’s cash flow problems were such that wages and salaries had not been paid since 30 November 2006, leaving employees and their families in positions of great financial hardship.

“In addition, there were long-outstanding and substantial arrears due to growers and other suppliers of goods and services, as well as significant monies owed to the Crown.

“The bank concluded that administration appointments were required to protect the position for itself and for the group’s creditors, and the appointments were supported by written requests from four directors of companies within the group.

“The efforts of myself and my colleagues continue to be focussed on protecting and enhancing value for the group’s creditors. In pursuing this objective I am actively seeking a potential purchaser for any of all or the businesses and assets on a going concern basis.

“Discussions and meetings are being held with a wide range of parties in an effort to achieve value for the group.”

Creditors could expect to receive a detailed report within four weeks, Mr McLean added, which would outline the events leading up to the administration, further information on the strategy adopted by the administrators, and comment on the prospects for the group’s creditors.

But Mr Spencer said Springdale’s entry into administration was a “hostile” move by four directors and that he and six other board members had resigned. Mr Spencer called the decision to enter administration “assisted suicide” for the group.

He insisted a significant investor was “in the offing” but that the administrators had refused to allow 14 days’ due diligence to examine the offer.

Read: Springdale Group in administration




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