Legal fees plus Covid doomed poultry business

Pullets: Poultry business facing major legal claim

A family run poultry business was pushed into administration because the impact of Covid-19 meant it could no longer afford the legal fees for defending a £1.6m claim and running a counterclaim.

W Potter & Sons in Warwickshire – which both rears pullets (young hens) and supplies poultry and agricultural equipment – was sold in a pre-pack to a separate company, Potters Poultry, owned by its directors, who are the grandchildren of William Potter. This saved 38 jobs.

According to the report from administrators Begbies Traynor, the company received a claim in August 2018 from a customer who claims the equipment it supplied was defective.

DWF is acting for W Potter and to date has been paid £250,000 in defending the claim, with the firm advising that costs up to the hearing at the end of this year or early next were likely to be a further £350,000.

The company has a potential counterclaim against the supplier of the equipment, however, and has brought the supplier into the proceedings. DWF advised that, as a result, the future costs would exceed £350,000.

The administrators reported: “The company had managed to maintain payments to suppliers, the bank and HMRC during this time, however due to the Covid-19 situation in the country, they received a significant number of cancellations for orders of equipment and minimal new orders coming through, resulting in cash flow difficulties.”

They said that, in isolation, W Potter could have managed the legal claim and Covid-19, but continuing to trade was “unrealistic” when they were combined.

The purchasers paid £830,000 for the business, whose secured creditor, Barclays, is set to see a “shortfall” on the £1m it is owed.

Unsecured creditors, who are owed £1.8m will have to share out just £215,000 between them. They include DWF, which is owed £49,000.

Some £43,000 of the £205,000 pre-administration costs went to Pinsent Masons as solicitors to the administrators.

Leave a Comment

By clicking Submit you consent to Legal Futures storing your personal data and confirm you have read our Privacy Policy and section 5 of our Terms & Conditions which deals with user-generated content. All comments will be moderated before posting.

Required fields are marked *
Email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.


17 December 2020

What do arbitrators know?

How does the Supreme Court’s analysis of ‘inside information’ in Halliburton align with other opportunities for unconscious bias, such as determinations on the admissibility of illegally obtained evidence?

Read More