County Durham based road surfacing specialist New County is trying to strike a Company Voluntary Arrangement with local subcontractors and suppliers to keep the business trading.

A new management team at the firm is hoping to strike a deal by July 6.

Director Tony Spellman told the Enquirer that the only alternative to a CVA would be putting the company into liquidation with the loss of more than 100 jobs.

He said: “This is the least damaging way of maintaining jobs and keeping the company going.”

Under a CVA creditors agree not to chase their debts in the hope the company returns to profitability and eventually pays back part of the money it owes.

Spellman and his fellow directors Ian McDonald and Stan Miller bought the company for a nominal fee earlier this month when it plunged into financial crisis.

The company is believed to owe up to £1.8m to local creditors.

Spellman said: “It owes an awful lot of money – more than £1.5m. Some of the management decisions made previsouly were highly questionable.”

New County was set-up by local businessman John Smart in 1979 and has been run by the family ever since.

His son Jonathan Smart has been kept on by the new management team.

Spellman said: “Myself and the fellow new directors are from a manufacturing process background so we have retained Jonathan because of his market experience.”

The firm’s financial situation has angered local subcontractors who are facing unpaid bills.

One told the Enquirer: “A lot of people are furious round here. They are a big company locally and the Smart family are well known.

“They diversified into the utilities market recently and things started to go wrong.

“Once again the trade contractors will be left picking-up the bill for the mistakes of a bigger firm.”