BikeBiz.com ran 37 stories on this sorry saga.
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It takes time - and money - to finalise the accounts for a liquidation with the amount of twists and turns that the Sturmey Archer liquidation had. Four years after KMPG was appointed as joint liquidator, the final accounts have been released and BikeBiz.com has been leaked a set.
The liquidators were paid £118 120 plus expenses. The valuer was paid £71 333 plus expenses.
Non-preferential creditors were first paid 63 pence in the pound and later a further 5.4 pence.
From the accounts it can be seen Sturmey had £1.14m in the bank, so what went wrong? Derby Cycle Corp, that's what.
Gary Matthews was the CEO at the time. He sold Sturmey's land to the University of Nottingham for £3.75m. Sturmey had to then pay big bucks to relocate. Instead of using the £3.75m to help Sturmey shift, Matthews sold the company to Lenark Investments, an operation headed by a self-styled professional gambler with a Las Vegas domicile.
This 'investment house' was involved in a string of failed business takeovers and any due diligence would have highlighted this fact. Despite saying he had ordered pukka due dliligence, BikeBiz.com found out no proper search had been carried out by Matthews.
Documents filed to the US Securities and Exchange Commission before the fall-out, showed Matthews' mindset at the time of the sale. He appeared euphoric to get rid of Sturmey Archer and said the company was sold "for cash", although 'we sold it for thirty quid to a bunch of cowboys' wouldn't have sounded quite as good.
"This was an exceptional transaction for us as we were able to sell an under performing, non-strategic asset for cash, avoid relocation costs and eliminate negative annual operating cash flows," said Matthews.
Matthews sold Sturmey to a company that had as prime mover a recently discharged bankrupt who had once been jailed for fraud.
This "executive" asked Sturmey MD Colin Bateman, now deceased, to be on the lookout for any weak bike companies which Lenark could purchase (Ten to twelve million pounds, not a problem, the exec told Bateman).
On the first day of IFMA in 2000, Sturmey stand staff learned that their company was insolvent because Lenark could not pay the £75 000 downpayment on the lease for new premises in Calverton.
The proceeds from the Sturmey land sale didn't help Derby. The company later went pop itself, although chairman Alan Finden-Crofts had jettisoned Matthews before that. Matthews, an MBA graduate, later went on to work for pharmaceutical company Bristol-Myers Squibb.
Some of Sturmey's machines, and all of its intellectual assets, were sold to Sun Race of Taiwan.
SA Realisations limited formerly Sturmey-Archer Limited
Income and Expenditure Account
To June 2004 INCOME (£) Misc income 1270.09
Freehold property 300 000.00
Intellectual property 20 001.00
Book debts 665 496.76
Plant & machinery 1 657 106.40
Fixtures & fittings 297.00
Motor vehicles 2360.00
Stock 200 530.34
Stock - Export sales 43 970.80
Tax refunds (pre-liq) 100.26
Cash at bank 1 148 699.82
Bank interest, gross 78 921.51
Bank/ISA interest 77 386.56
Sundry refunds 296.17
Work in progress 579 980.00
TOTAL: 4 776 438.71