Business
Statement re. Suspension
Statement re. Suspension.
About this update from Logistics Development Group Plc
[{"type":"text","content":"\n Legacy Distribution Group, Inc.\n31 January 2007\n\n Legacy Distribution Group Inc.\n\n (the 'Company')\n\n\n\n\n\nThis announcement is provided by way of an update to the announcement made on 8\nDecember 2006, which resulted in the suspension of trading in the Company's\nshares.\n\n\n\nBackground to the suspension of trading\n\nFred Gretsch was appointed as the Company's Finance Director on 12 June 2006.\nFollowing the publication of the Company's interim results on 28 September 2006,\nat the request of the Board of the Company (the 'Board'), Fred Gretsch commenced\na review of the Company's financial systems. During this process, Mr Gretsch\nexperienced difficulty in reconciling the management accounts for the 9 months\nto 30 September 2006 with the published interim results to 30 June 2006. This\nled the Board to question the appropriateness of the Company's financial systems\nand their ability to provide the Board with accurate financial results.\n\n\n\nAs a consequence, on 8 December 2006, the Company requested and was granted a\nsuspension of the trading in its shares pending further investigation and\nclarification of its financial position.\n\n\n\nPost suspension update\n\nSince the suspension of trading in the Company's shares, the Board, led by the\nNon-Executive Directors and Mr Gretsch, has continued its investigations into\nthe financial and trading position of the Company. Whilst the review process is\nstill ongoing and no firm conclusions have been reached as to the full extent of\nthe problems faced by the Company, it has become apparent that the Company has\nbeen trading unprofitably for some time.\n\n\n\nThis unprofitable trading has resulted in the Company breaching certain of its\nbanking covenants which it has not been possible to remedy. As a consequence,\nthe Company has received a demand for immediate repayment of all amounts\noutstanding to its principal bank.\n\n\n\nThe financial uncertainty surrounding the Company has meant that suppliers have\nbeen unwilling to provide credit terms to the Company to enable it to make\nnecessary inventory purchases. This has made trading extremely difficult.\n\n\n\nThe bank is currently undertaking its own detailed review of the financial and\ntrading position of the Company to establish the options available to it to\nmaximise the amounts recoverable by it. In addi...