KPMG administrators dealing with collapsed work provider Accident Repair Management Services (ARMS) are confident that its creditors will get all their claims settled in full.

However, their job is made difficult by a paper chain of poor accounting information at both ARMS and its principal customer, insurance broker Endsleigh.

In a report that was issued last week, joint administrator Mark Orton says there will be enough cash to cover creditors claims, currently totalling £500,000.

KPMG says ARMS failed with total debts of £2.2m. But Orton says it is owed about £1.4m by Endsleigh, of which is outstanding from as far back as 1997.

The business also has £1.2m in the bank. The situation is made complicated by a claim by ARMS directors that £400,000 of this is held in trust for Thomas Harper Ltd, a vehicle damage assessment company also under its directorship, which still trades.

“Creditors should note that the paper trail and background accounting information available to the joint administrators has been less than perfect. This is exacerbated by a similar situation prevailing at the main customer,” states Orton.

Endsleigh disputes the amount, which leaves administrators with the task of tracking down documentation to prove their case. Sources say KPMG isn’t considering legal action at present, but hasn’t ruled it out.