Almost £16m was owed by a medicine manufacturer when it collapsed into administration and made nearly 100 people redundant, a new document has revealed.
Bolton-based M&A Pharmachem, which specialised in manufacturing and selling paracetamol and opiate medicines, entered administration towards the end of January, with more than 80 jobs being lost straight away.
The remaining employees lost their jobs on February 1.
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Sale of the majority of the company's assets was completed on February 1 to Crescent Pharma Group for £5.4m.
According to a new report by administrator FRP, secured creditors were owed in the region of £14m when the company entered administration.
Maken Investments' outstanding indebtedness totalled approximately £8m, which has since been reduced by £4.9m after it provided a loan facility to Molin to buy the M&A Pharmachem's property. C.D Medical was owned £5.8m.
The joint administrators said it is currently uncertain whether there are sufficient funds to return the money to both parties.
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The report adds that it us currently estimated that preferential creditors are owed a total of £45,000 while HMRC is owed about £1.8m.
The joint administrators said it is anticipated that there will not be enough money to pay the secondary preferential creditors.
The FRP report said: "The company had recently been funded by its parent company, via Yakub Patel, in order to fund continued operations.
"It had also continued to dispose of residual stock, in some cases at a loss, to generate funds.
"To obtain ongoing funding and cashflow, in February 2021, Lostock Pharmachem, an associated company by virtue of common ultimate beneficial ownership, purchased the company's marketing authorisation, for £845,000 pus VAT.
"This was utilised to continue funding working capital, whilst legal title remained with the company.
"During 2021 the business generated significant losses as production was limited to paracetamol pending the validation of other test batches and submission to the MHRA.
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"Progress in restarting production was slower than had been anticipated and the business had exhausted all of its cash and available funding.
"In the weeks prior to the appointment of administrators, the company had effectively ceased to trade; the company had insufficient cash reserves to settle future liabilities, including wages."
According to documents filed with Companies House, M&A Pharmachem's turnover fell from £15.5m to £3m in the 12 months to January 31, 2021, while its pre-tax losses widened from £3m to £6m.