LIVERPOOL public relations firm Paver Smith collapsed with debts of £1.3m when it went through a pre-pack administration last month, LDP Business can reveal.

According to an official document filed last week at Companies House, the collapsed agency’s management paid £303,000 to administrator Parkin S Booth to buy back the assets, goodwill and intellectual property of Paver Smith. This enabled them to restart trading as a new limited liability partnership, Paver Smith LLP.

Managing partner Jon Brown said: “The new business continues to work with the vast majority of the old company’s suppliers, who have been happy to support us in our new structure.”

In their statement of administrator’s proposals, Parkin S Booth say they expect to generate £210,000 from the debtors of the collapsed company, although that will be almost entirely swallowed by invoice discounters Bibby Financial Services.

More than £760,000 is described as unrecoverable, including £140,000 owed to shareholders, £360,000 to HM Revenue and Customs and £105,000 to trade creditors.

Merseyside Special Investment Fund were owed £448,500, although the capital element - which accounts for more than half – will be repaid as part of the purchase price.

Three factors were blamed for the company’s demise. A bad debt of £113,000 arose from the European Former Footballer Players Association conference last year, which was affected by volcanic ash which largely grounded European air travel.

The proposals describe the firm’s acquisition of Manchester-based Stripe Communications in 2009 as “poor”. It served only to increase costs, but missed revenue targets.