[Uploaded to BikeBiz.co.uk on 23rd September]
By Richard Tresidder
Axed workers at Sturmey Archer today found out the first details of the fateful takeover deal.
The world famous Nottingham gears firm was sold for less than £50 to Lenark in June.
But the necessary investment failed to materialise and Lenark closed the Triumph Road factory last week.
Three hundred workers were given just ten minutes’ notice with no redundancy package. The Government now faces a bill of up to £2.2m for redundancy and notice pay.
The company’s future is in the hands of creditors who will decide whether to put it into liquidation at a meeting in Birmingham on October 2.
Lenark was formed in May, 1998, and is registered at 33A High Street, Heathfield, East Sussex.
Tony Murphy, of insolvency practitioners Smith & Williamson advising Sturmey Archer, said he believed Lenark had not invested any money.
The current site has been sold to the University of Nottingham and Sturmey Archer must leave by mid-December.
Mr Murphy said a number of redundancies had already been planned as a result of a proposed move to Calverton.
The cost of moving the business was estimated at £3m including buying the new site.
Mr Murphy confirmed in the eleven weeks Lenark had owned Sturmey Archer, it hadcharged the engineering group £120,000 in management fees.
A further £52,000 was transferred from Sturmey Archer’s account to support a sister company in the Lenark Group, he said.
A statement by Gary Matthews, chief executive of former owners Derby Cycle Corporation, said: "In carrying out due diligence on the capability of Lenark to make a success of Sturmey Archer, evidence was produced showing that they appeared to have more than sufficient resources to undertake the plans the management of Sturmey Archer had initiated to make a success of the business.
"We were just as surprised and concerned as anyone that it now appears that Lenark is unable to fund Sturmey Archer, and this has forced it to enter into insolvency proceedings: we are both a customer and creditor and will suffer from their insolvency along with others in the same position.
"We are very distressed that so many Sturmey Archer employees who served loyally for so many years under our ownership of the business will lose their jobs.”
No one for Lenark was available for comment.