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The Innovate group of companies, comprising 15 separate businesses, collapsed with an estimated deficiency of a staggering £54m, of which nearly £19m is owed to trade creditors, while staff are owed around £1.6m. Creditors of Innovate Corby Chilled Distribution can expect just 8p in the pound. Unsecured creditors of a dozen of the other businesses can expect no return.

Of that £54m deficiency, a considerable amount is accounted for by inter-group trading and the amount owed to its Icelandic  parent Eimskip. However, as MT went to press, neither amount could be confidently estimated. The statement of affairs (recently filed at Companies House and prepared by joint administrator Shay Bannon at BDO Stoy Hayward) reveals how close the Innovate group came to collapsing just two months after Eimskip took over full ownership in June 2007.

According to Bannon, the first signs of trouble were in September 2007, when cashflow issues became evident. Eimskip injected funds and these, combined with profit from property deals, kept the group afloat. However, as the credit crunch began to bite at the end of the year, the group could no longer rely on the cash from these property deals.

On 7 May, Eimskip withdrew support due to the level of cash required to keep it going. The Innovate group became insolvent on both a balance sheet and cashflow basis. On 12 May, Pricewater-houseCoopers (PwC) was engaged to conduct an accelerated sale process. On 11 June, Eimskip revealed  to shareholders its plans to divest itself of Innovate and write off its then-current book value of £58.7m.

Meanwhile, the sale process had become protracted (rather than "accelerated"), and on 17 June BDO was appointed to handle the sell-off. At this point, the Innovate group was spending £27m per annum on rent on 57 properties. On 20 June, landlords of four of the group's businesses presented winding-up petitions.

In the week commencing 23 June, Innovate had difficulty "finding sufficient funds to meet the companies' payrolls and other trading costs" and could not pay its rent, according to Bannon. The inevitable complete collapse of the group followed in week commencing 30 June, with Stobart picking up the chilled arm, Yearsley the frozen business for £2m, and Corus the rail division for £5m.

Joint administrator Shay Bannon notes in his statement the "complexity of the structure of the group and the trading relationships" and that such a significant deficiency "requires further investigation".

He adds: "Concern has been expressed by creditors and the parent company in relation to the management and operation of the businesses by previous management. We will be undertaking a forensic investigation. We have made full copies of the group's financial computer records and email system to assist in future investigations."

But Robert Montague, executive chairman of Axis Intermodal, has questioned Eimskip's behaviour: "I have never known a public limited company to step away from its subsidiaries' obligations." Eimskip was unavailable for comment as MT went to press.