Creditors are expected to be left out of pocket to the tune of more than £7.5million following the collapse of waste management firm Alex Smiles Ltd.
The company, based in Deptford in Sunderland, fell into administration earlier this year with the loss of about 80 jobs.
Alex Smiles Ltd who had previously been a council waste disposal contractor did not submit a tender.Coun Michael Mordey
The firm had also been served with three legal notices by the Environment Agency after bosses allowed mountains of rubbish to develop at the site.
Insolvency company Baker Tilly was brought in to restructure the company and market it to potential buyers.
However, no suitable bids were made.
Alex Smiles had previously won a Sunderland City Council contract although when the contract was due to be renewed, bosses did not bid for it.
Portfolio holder for city services at Sunderland City Council Councillor Michael Mordey said: “A formal procurement exercise for 2014 waste treatment contracts began in 2008.
“Alex Smiles Ltd who had previously been a council waste disposal contractor did not submit a tender.”
Creditors of the firm were expected to meet at Baker Tilly’s Newcastle offices yesterday.
Baker Tilly’s report in the business’s finances state that non-preferential creditors are now owed £7,535,522.
Among those owed money is Sunderland City Council, City Hospitals Sunderland, Sunderland AFC’s 1879 Events Management Ltd and Lloyds Bank.
The company was created by the late Alex Smiles in the early 1970 and remained based in Wellington Lane until the turn of the century, moving to Deptford in 2002.