Marketing Gloucester owed companies £1m before it went bust

Marketing Gloucester owed nearly £1million to companies when it went bust last month, it can now be revealed.

Marketing Gloucester owed nearly £1million to companies when it went bust last month, it can now be revealed.

Liquidator firm Bishop Fleming, which was chosen to manage the insolvency process after organisation collapsed, wrote to the company’s 53 creditors and revealed the amount owed by Marketing Gloucester, totalling £995,174.36.

It is unclear whether Gloucester City Council, which owns the arms-length company, will be liable for any of the outstanding public funds, Punchline Gloucester reported.

Documents sent to the LDRS by Punchline Gloucester show the amounts owed by Marketing Gloucester range between £5.99 to one individual and £400,000 to the UK Digital Retail Innovation Centre in Eastgate Shopping Centre.

And Gloucester City Council was owed £352,327.76, Gloucester Rugby was owed £6,056 and the debt to Gloucester Quays stood at more than £21,000.

Earlier this month the company had gone into liquidation and ceased trading due to having ‘untenable’ debt, and all seven of its staff lost their jobs.

The city council had proposed firm Bishop Fleming as Liquidator to begin investigating the scale of liabilities, Marketing Gloucester’s financial position and why it failed, and to inform its creditors.

A spokesman for Bishop Fleming said it is not able to comment on the total debt due to not officially being in post yet.

A separate report sent by Bishop Fleming to the creditors details the financial problems Marketing Gloucester had since its inception in 2008.

It summarises the company’s failings into three points:

• Gloucester City Council cut Marketing Gloucester’s core funding by £217,000 in the last three years
• The company ‘failed to deal with the reduction in core revenue’.
• ‘Too many high-risk projects were entered with insufficient business and financial planning’.

WHAT HAPPENED TO MARKETING GLOUCESTER?

Gloucester City Council stripped Marketing Gloucester of its right to run events such as Tall Ships and the carnival last month.

Its former chief executive, Jason Smith, was sacked in December after a review into the company’s governance and operations, and his interim replacement, Steve Brown, was appointed last month.

An independent review, by consultants Grant Thornton, was ordered by the city council as part of a deal which saw it loan Marketing Gloucester £240,000 of taxpayers’ money to get to the end of the financial year in March.

Earlier this month the company’s board announced its financial position was ‘untenable’ following a review of its finances and declared the business insolvent immediately.

The city council had proposed firm Bishop Fleming as Liquidator to begin investigating the scale of liabilities, Marketing Gloucester’s financial position and why it failed, and to inform its creditors.