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Paver Smith debt hit £1.3m before LLP 'rebrand'

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By The Drum Team, Editorial

March 29, 2011 | 2 min read

Paver Smith is understood to have been left with £1.3 million of debt to suppliers last month, when it announced a ‘pre-pack deal’ to become Paver Smith LLP last month.

The company was forced to rebrand with debt of £360,000 owed to HM Revenue & Customs alone.

The directors of Paver Smith were due £141,000, while £448,500 was owed to Merseyside Special Investment Fund, and another £325,000 due in capital.

Agreements have now been made with most of the agency’s creditors through client payments.

John Brown, managing director for Paver Smith, commented: “The old company was hit by a perfect storm of circumstances, two of which will be very familiar to others: the downturn in the economy and the rapid contraction in public sector spending.”

Brown continued: “We were also hit by a bad debt of over £100,000 which was directly caused by the Icelandic volcano and which removed, at a stroke, any comfort in our business plan.

“Paver Smith LLP is on a stable and secure footing, delivering great work for its clients and with very positive plans for the future.

“I am delighted that the new business continues to work with the vast majority of the old company’s suppliers,” he added.

Upon announcing the change in name, the agency announced that former manager director Dougal Paver was to take on a senior partner role alongside director Rachel Smith and Martyn Best. Earlier this month it also said that it had won over £300,000 of business for 2011 already.

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