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BLACK FRIDAY: EUK administrator calls in £106m Zavvi debt

Just minutes after news of EUK's demise – and the loss of around 700 jobs – it has emerged that the distributor's administrator Deloitte has called in Ernst & Young to restructure Zavvi's management team in a bid to claw back some £106m owed to EUK.

Zavvi, which previously traded as Virgin Megastores, boasts some 125 stores across the UK. It has used EUK both as a distributor and its buying team and has been unable to fully stock its stores since EUK went into administration.

With Ernst & Young in place, EUK is aiming to claim back the £106m that Zavvi owes the distributor. However, according to The Tmes, Ernst & Young will become the administrator at the entertainment retailer if it fails to pay back its debt.

The Times also reveals that Zavvi is just one of a number of major customers that owes money to EUK, claiming that both Tesco and Sainsbury's owes around £25 million each.

A statement from Zavvi is expected shortly.

Source: The Times

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Tags: euk

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