Algie Agencies, owned by Dunedin businessman Ken Algie, was placed in receivership by an Auckland finance company last week and continued trading.
However, after the potential buyer pulled out yesterday, Dunedin-based Deloitte receivers decided to lay off all the staff - understood to be a total of 45 at two Dunedin sites and six sales reps in Christchurch.
Receiver Murray Frost said when contacted the company would remain in receiver-ship but "the only real outcome was to sell the remaining assets", as it could not continue trading without staff.
There had been no application to liquidate the company, which would cause it to be wound up.
"There was the prospect of a purchase, but after the purchaser pulled out we then decided to close," Mr Frost said.
The staff, who were entitled to four weeks' notice and pay, now become preferential creditors within the receivership and Mr Frost said it "was likely they could expect to be paid", but that was subject to the sale of assets.
The receivers had several weeks to determine how much was owed to the finance company, staff and other secured and unsecured creditors before the first report was filed.
Algie Agencies bought Tamahine Knitwear last year after the latter announced it would close in June, making 50 workers redundant.
Mr Algie resurrected 22 jobs.
An employee, who did not want to be identified, said staff were told by management two weeks ago that everything was fine and, although things were slow, that was not unusual for this time of year.
The following Monday, the receivers arrived and told staff there would be two more weeks of work and possibly a further month of "tidying up".
At a meeting yesterday afternoon, the 22 remaining factory staff were told they would get their final pay next week but it would not include holiday pay.
"It really sucks right on Christmas. Any time's not a good time."
Mr Algie told the ODT he was "absolutely gutted".
"If the business was a bad one and it didn't have good margins and plenty of orders, then I'd understand it.
But we had lots of work, lots of orders on the books, very, very good staff, excellent staff . . . it just didn't have the funding.
It's easy to say that but that's the truth of it.
"It definitely had a future. It just lacked funding."
There is a total of 14 claims over Algie Agencies assets on the Personal Properties Securities Register, including multiple registrations by Westpac, UDC Finance and Motor Trade Finances.
