One of the oldest brass mills in the country, which collapsed with dozens of job losses, had run up debts of £3.8 million.
Aldridge-based McKechnie Brass – thought to be the UK's sole remaining brass bar producer – collapsed on December 30 last year with all but 15 jobs axed over the festive period.
The company, which counted established industrialists Lord Digby Jones and Jonathan Grove among its shareholders, called in administrators after struggling with fluctuating metals prices and heavy financial losses.
The company is set to be liquidated after an administrator's report showed it collapsed with book debts of £3.8 million, with unsecured creditors expected to see a significant shortfall.
McKechnie's history stretched back more than 140 years when it was founded by Duncan McKechnie in St Helens.
The company was bought out of administration with the backing of West Midlands-based industrial conglomerate Grove Industries, led by the late industrialist David Grove, in September 2011. However, a report from administrator Duff and Phelps shows that Grove, a secured creditor, will take a financial hit from the collapse.
McKechnie owed £3.79 million to Grove, but that is unlikely to be realised. Elsewhere, Centric Commercial Finance has been repaid £2.6 million.
The report states: "To date, collections total £3,254,126. Creditors should note that the majority of debtor receipts have been paid directly into the Centric facility bank account."
However, despite unsecured creditors' claims totalling £4.2 million, with a further £467,510 worth of claims from employees at McKechnie, they are expected to be left with a significant shortfall.
They are likely to be limited to the "prescribed part" – half of the first £10,000 and 20 per cent of any further funds available.
The report states: "Based upon the current information available, it is anticipated that there will be insufficient realisations to enable a distribution to the non-preferential unsecured creditors of the company, other than from the prescribed part, if any."
It adds: "The joint administrators believe the company should be moved to creditors voluntary liquidation in order to make a distribution to the unsecured creditors from the prescribed part, once all matter in the administration have been finalised including the book debt collections and paying all final costs from the period of occupation at the trading premises."
McKechnie Brass moved to Birmingham in 1894 and became an early pioneer of brass and copper extrusion.
It built its factory in Middlemore Lane, Aldridge, in 1954, and at one stage branches of the company were established in South Africa and New Zealand. It came to specialise in round rod, shaped rod, turned parts and stampings for the water, gas and electrical industries.
However, it struggled in recent years, including suffering a production breakdown in November.
Accounts for 2012 showed that while the firm turned over £16.9 million, its costs accounted for more than 91 per cent of that. It made a pre-tax loss of £1.2 million for the year, with almost no cash in the bank.
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