The director of a city-centre restaurant has insisted it is 'business as usual' and local suppliers will not miss out despite the company behind it going into liquidation.
The Library Restaurant, in Guildhall Hill, Norwich, will continue to trade under the management of original directors Nigel and Jayne Raffles after they formed a new company, Raffles Restaurants, to take on the business.
Holding company Jangus Limited is in the process of being wound up with debts of £400,000 after a petition in the High Court.
But Mr Raffles has said the business will carry on, preserving 15 jobs, and suppliers will be paid.
He said: 'We are carrying on: it is business as usual.
'We have had to reorganise everything, which goes back to when we had the [group of] four restaurants.
'All the local or smaller suppliers are going to be paid – we have spoken to them and they are continuing to work with us.'
He said he had been determined for the business to succeed.
'Being so involved in the business, you try to make everything happen and you work hard, whereas maybe if you are a businessman you can see when there is no more you can do.
'I still believe The Library has a future and it is certainly doing well at the moment.'
Insolvency experts Leading Corporate Recovery said Jangus owed £177,000 to HMRC and the directors were the other major creditor.
Jamie Playford, director of Leading, said an unexpected tax bill and £90,000 of energy bills due to incorrect meter readings had contributed towards the financial difficulties.
He said: 'The company experienced several unexpected issues between 2012 and 2014 which, although the directors managed to address at the time by refinancing and injecting their own personal savings, resulted in the build-up of interest charges and a drain on cash flow which the business in its current state cannot sustain.'
In the year to April 2014 Jangus had a turnover of £728,373 which fell to £634,094 in 2015 – its last filed accounts.
The Raffles have run eateries in the city for more than 25 years, including St Benedicts Restaurant, Pinocchio's and vegetarian cafe Pulse. They have now sold all but The Library.
How can this happen?
The new firm formed to take on the assets of an insolvent business is often known as a 'phoenix company' – so called because they rise from the ashes.
UK company law allows for the directors of the insolvent business to carry on running the new entity as long as they were not responsible for the original business's demise.
The aim of this is to encourage entrepreneurship and improve the chance of continued trading where there was no misconduct by directors.
If a director is disqualified or adjudged bankrupt then they cannot become a director of the newly formed company.
While the trade, staff and directors can all be transferred, the name cannot and a director is unable to run a business with a similar name for five years after it has been liquidated.
The assets of the company also have to be purchased for the best possible price, after being marketed and advertised.
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