The liquidation of a north Fife engineering company has been blamed on a property leasing dispute by a prominent Dundee industrialist who tried to rescue the ailing firm.
Hermann Twickler, managing director of PressureFab, the specialist oil industry equipment group, was commenting on the demise of Houston’s of Cupar whose creditors will meet in Edinburgh.
The Scottish Emerging Entrepreneur of the Year in 2012 and Business Leader of the Year in 2013 took over loss-making Houston’s in February.
He believed its subsea engineering experience would complement PressureFab’s steel fabrication capabilities and help win more orders.
Houston’s which was to be renamed PressureFab Subsea was in financial difficulties at the time, and Mr Twickler arranged emergency funding to pay the wages of the 25 personnel and some of the bills.
The subsidiary began to recover until Mr Twickler said he learned that the lease for the Cupar Muir premises was not due to run out until 2019, four years later than he had understood.
Negotiations to find a new tenant Houston’s workforce were moved to the Riverside factory in Dundee failed, and the landlords sued for breach of contract.
Robert and Carol Kay, who owned Houston’s factory premises, claimed unpaid rent from Mr Twickler for the remainder of the six-year lease.
“It became clear that this could add a total of up to £480,000 to the recovery budget, a sum that was impossible for Houston’s to raise,” Mr Twickler said.
“The landlord got a court order for a winding up petition and a provisional liquidator was appointed.”
Mr Twickler continued: “Some creditors may feel that I or some of my companies should sort out the debt of Houston’s, but we provided nearly £400,000 of support and paid down debts of £500,000 to less than £140,000.
He believed he and his companies had been the biggest creditors of Houston’s and had suffered the biggest loss.
With the exception of the landlord, most of the other creditors were claiming for goods and services delivered before his failed takeover.
“This was a turnaround deal that failed due to the landlord exercising his full rights to future rent in accordance with the lease agreement,” he stated.
The Cupar Muir premises now has a new tenant, and Mr Twickler said he was fully cooperating with the liquidation process.
Provisional liquidator Johnston Carmichael of Edinburgh yesterday declined to comment on the situation.
Graham Dudgeon, managing director of Axyz Engineering of Glenrothes, said: “We are owed about £7,000 by Houston’s and are a small company.
“This is not the first time that this sort of thing has happened to us and we are very disappointed.”