keeps a convention promise.
We are now able to confirm that the rumors are true: i-Kore has gone into receivership.
Cowan and Partners in Edinburgh, a chartered accountancy firm, are liquidating the assets of the company. The contact person is given as David McFarlane, on 0131 554 0724.
i-Kore had first run into cashflow problems in 2003, when a manufacturing error led to delays with their VOID Gamebox product. (Masters for plastic figures are usually sculpted 3-time-normal size, with the diemakers reducing the size for actual production. In this case, Chinese workers made the error of producing the figures as sculpted - 90mm scale!) The delays made critical inroads in the company's Christmas season sales.
Three of the principals in the company provided short-term financing (in at least one case, mortgaging a home) to keep i-Kore operational. They had a great deal of confidence in the ongoing product lines, as well as great enthusiasm for an upcoming line of 10mm pre-painted figures for a mass-combat game. To provide longer-term stability, i-Kore made arrangements to obtain additional financing.
Before a company receives an infusion of capital, there is a "due diligence" phase in which the financial situation of the company is verified. It was during this process that i-Kore discovered a series of financial discrepancies involving Accounts Receivable (which are the outstanding orders for which a company expects to receive payment). A number of the orders were "phantoms" - no such orders had actually been placed.
Other problems now came swiftly to light. Some distributors complained that they had been sent items they had never ordered, or more than what they had actually ordered. Management learned that sales staff had been directed to conceal information from management, and "to lie" to distributors.
The final straw came when management received a tip that a company employee was operating several unauthorized eShops on eBay, disposing not only of i-Kore product, but also of other company's products obtained from distributors. Based on an initial assessment of eBay records, it was estimated that the eShop had done £60,000.00 GBP in sales.
When presented with the evidence, i-Kore Sales Director Felix Garzon allegedly admitted to running the unauthorized eShops.
The problems with the company's books made the planned business expansion untenable. It became nearly impossible for the company to function, since it was unclear what its financial situation really was. Consequently, the Board of Directors voted to voluntarily place i-Kore into liquidation.
Receivership does not necessarily mean the end for the Void and Celtos game systems and product lines, as those assets will be distributed as part of the liquidation.
A Creditors Meeting is scheduled two weeks from now, when i-Kore management will meet with the company's creditors.
Several i-Kore employees reportedly hope to "reconstruct" the company through a purchase of the assets from the creditors. They are said to have a "solid plan," but it is not known what other parties might be interested in bidding on the assets.