Collapsed Dundee charity Dovetail could have debts in the millions, according to a new report from the administrators.
Dovetail Enterprises went into administration on March 31, with the immediate loss of 47 jobs.
The charity, which provided employment for disabled people, manufactured doors, beds and mattresses at Dunsinane Industrial Estate.
A new report by administrators Interpath said it has been unsuccessful at trying to find a buyer for the company.
Dovetail Enterprises’ debts
The administrators are working to establish the level of debts in the business.
Claims of £3,540,000 from the Department of Work and Pensions, £273,000 from Dundee City Council and £162,000 from Scottish Enterprise have been received.
These bodies are secured creditors since they gave financial support to Dovetail.
This amount, totalling almost £4 million, is much higher than the £930,000 listed as being owed to secured creditors in a statement of affairs prepared by company directors.
Interpath notes: “The sums claimed by the secured creditors and ranking is yet to be adjudicated upon. We note the company records includes a lower value for the secured debts.”
Meanwhile, claims from staff are around £59,000 while HMRC is due £182,000.
More than £500,000 is due to unsecured creditors who the administrators say are “highly unlikely” to receive a dividend.
Selling Dovetail assets
Interpath approached 22 companies about buying Dovetail but there was no interest in taking on the company.
The administration also meant certain certification held by the business lapsed, preventing the safety certification of fire doors.
The administrators have lined up a buyer for the premises. Other priorities are chasing debts and disposing of stocks.
If the building sale goes through, it is expected that only secured creditors – the Department of Work and Pensions, Dundee City Council and Scottish Enterprise – will receive a portion of the sums they are due.
Dovetail employed a total of 51 staff of which 47 were immediately made redundant. Of four workers retained to help the wind-up process, three were subsequently let go.
Increasing losses
Accounts paint a picture of an increasingly tough trading environment. Losses were £103,000 in the year to March 2023; £144,000 in the year to March 2024 and £235,000 in the 11 months to February 2025.
The report states: “Its revenues have not been able to sustain rising costs, including energy and raw material cost inflation.
“This combined with its large overhead base, principally because of the substantial owned manufacturing facility which the company operated from, resulted in trading losses.
“These losses, in turn, led to cash flow pressures.
“The board of directors worked closely with key funding partners over the last few years to secure funding to manage the trading losses and working capital requirements.
“At the same time, efforts focussed on implementing operational improvements and reducing costs.
“Unfortunately, despite these efforts, the company continued to incur losses with it latterly becoming clear that significant capital investment was required.
“Despite exhaustive efforts… the board was not able to secure the necessary investment funding.
“It concluded there was no option other than to seek the appointment of the joint administrators.”
Dovetail staff have begun the process of making a protective pay award byconsulting with solicitors.
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