Courts calls in administrators

THOUSANDS of Courts customers could be out of pocket this Christmas after the furniture retailer called in administrators.

The troubled firm moved after its banks and lenders refused to provide it with any more cash. The administrator could seek a buyer for the company or close it down and sell its assets to repay creditors.

Customers who have goods on order are unlikely to get their money back if the administrator goes for the latter, unless they have paid by credit card, when they can claim from the issuer if the goods purchased were over £100.

Thousands of shareholders could also lose out as the company's bankers will get first bite of any revenue from an asset sale. Shares in the company were suspended on the London Stock Exchange at 13.5p.

A company spokesman said: 'Obviously, they have some stock in place but until we know what the administrator plans to do we can't say what will happen to existing customers.'

The spokesman had no firm figure for the number of orders on its books.

A statement read: 'Following further discussions with the Company's principal lenders under its £280m Revolving Credit Facility, the Board has been informed that the principal lenders will not grant waivers for the covenant breaches likely to occur shortly, nor will they provide immediate additional funding required.

'The Company has applied to have its shares suspended from the Official List of the London Stock Exchange with immediate effect, pending clarification of its financial position.‘

On Monday afternoon, the company‘s website was down and customer service numbers jammed.

Courts said earlier on Monday its lenders would not waive conditions of minimum levels of financial performance attached to the firm's loans and would not stump up any extra cash.

The stock crashed earlier this month when Courts forecast a bigger-than-expected year loss and said it was in talks with its lenders.

Courts has suffered this year from the devastation of its Caribbean businesses by Hurricane Ivan, and a costly restructuring programme.

The company, which has 98 stores in England and Wales, reported sales of £286m in its last set of full-year financial results. Its shares have fallen by 95% since the beginning of the year as its financial woes unravelled.