Monday, July 28, 2008
Banks withdrew support after poor financial reporting at online car retailer
An administrators' report into collapsed web-based motor retailer New Car Discount reveals its bank cut its overdraft facility shortly before it went into administration in May.
That move, by Yorkshire Bank, followed a similar reduction by New Car Discount's previous financier, Royal Bank of Scotland, towards the end of 2007.
Joint administrator Andrew Poxon said in the report that a relocation of the business in January from Ashton-under-Lyne to Nelson, Lancashire, in order to cut costs actually led to the loss of several key staff.
Co-founder Terry Hogan resigned in February, and in May Yorkshire Bank reduced the company's £250,000 overdraft facility "due to poor financial reporting", says the administrators' report.
Remaining director David Scholfield was informed that the bank had no appetite to fund the company in future, leading to him putting it into administration.
The collapse did not affect Motoring.co.uk, an online car advertising portal which was devised by Hogan, Schofield and colleague Chris Green while all three were at New Car Discount.
Green and Hogan bought out Motoring.co.uk in November 2007.
DATED: 28.07.08
FEED: AM
That move, by Yorkshire Bank, followed a similar reduction by New Car Discount's previous financier, Royal Bank of Scotland, towards the end of 2007.
Joint administrator Andrew Poxon said in the report that a relocation of the business in January from Ashton-under-Lyne to Nelson, Lancashire, in order to cut costs actually led to the loss of several key staff.
Co-founder Terry Hogan resigned in February, and in May Yorkshire Bank reduced the company's £250,000 overdraft facility "due to poor financial reporting", says the administrators' report.
Remaining director David Scholfield was informed that the bank had no appetite to fund the company in future, leading to him putting it into administration.
The collapse did not affect Motoring.co.uk, an online car advertising portal which was devised by Hogan, Schofield and colleague Chris Green while all three were at New Car Discount.
Green and Hogan bought out Motoring.co.uk in November 2007.
DATED: 28.07.08
FEED: AM
