A class action has been launched against the administrators of Smart Cartridge, MLM Insolvency LLP.
Smart Cartridge entered administration in May 2008 after its backers refused to continue to support franchisees who proved unwilling to honour their financial obligations under the terms of their franchise agreements.
Shortly afterwards the administrators sold the Smart Cartridge assets for £20,000 to Lothian Trading Limited. Both companies are run by Graham Little, who has described the change in ownership as a restructuring.
The defunct company’s assets included the franchises and the action alleges that the administrators could have gained a better price on the open market than the price agreed with Lothian Trading Limited.
MLM Insolvency was unable to comment before we went to press. In an associated development one of the stores has unilaterally withdrawn from its franchise agreement, saying that the franchise model is unsustainable.