Lenders and suppliers to ModelZone could lose up to £11m after the retailer fell into administration last month.
Administrator Deloitte said that the toy and model retailer owed more than £9m to Lloyds Banking Group, including its private equity arm LDC, according to The Telegraph.
The collapsed retailer also owes £1.5m to suppliers, including around £200,000 to model train marker Hornby, which had concessions in ModelZone’s stores. Hornby described ModelZone as an “important business partner” and has written off the debt.
Deloitte estimates in the report that the sale of ModelZone’s stock could make £4m available to creditors. However, the sale of the stock would still leave creditors facing a loss of £7m.
ModelZone had been a profitable business but it posted losses over the last two years due to loss-making new stores and growing online competition.
Earlier this month, Deloitte revealed that it would kick off a store closure programme. Some 45 jobs will be lost following the closures.