Still afloat. South Yorkshire fish food firm rescued after US litigation nightmare
A South Yorkshire fish food company has been reborn after being sued by an American customer over its name.
New Era Aquaculture of Thorne spent a year fighting a legal action, but directors called in administrators at the prospect of mounting bills as a trial loomed.
Directors managed to obtain rescue funds and bought the company as a going concern in a ‘prepack’ deal, with the same 16 staff, assets and products - but a different identity: World Feeds Ltd.
Established in 2005, New Era enjoyed strong growth as it exported fish food to 35 countries. Clients included Dubai Mall Aquarium, Legoland and Sea Life Centres. But it hit trouble last year when a US customer launched trademark litigation over its name. Director Peter Kersh said it was “totally unforeseen.”
He added: “After 12 months the case became too costly to defend, it was dragging us down and we had to protect our creditors.
“We got rid of the old brand and started afresh with a different name and plans to expand. All the customers have been great.”
It is hoped the US litigant will drop its claim having achieved its objective. Whatever happens, any legal liabilities remain with the old firm, New Era.
The directors approached Finance Yorkshire and received a £440,000 investment to launch World Feeds.
Chief executive Alex McWhirter said it was an opportunity to save an exceptional company and a very strong exporter.
He added: “Our fund managers were confident it’s got a good future.
“Our investment has been vital in securing jobs in this strong Yorkshire business while at the same time providing it with the capital to invest in new machinery to facilitate continued sales growth in the UK and overseas.”
Nick Reed, of administrator Begbies Traynor, said: “Having established a name for itself it is great to see the business continuing. With the same experienced management team in place, prospects for the business look bright. It is good news for creditors, staff and suppliers that a deal has been concluded quickly.”
Products will be rebranded as Vitalis Aquatic Nutrition except in North America where they will be known as Balance Aquatic Nutrition.