Creditors are owed approximately €7 million by Doherty Advertising but the company's books show trade debtors owing only close to €3.23 million. The estimated deficiency is €3.7 million.

The former managing director of the company, Mr Mark Beggs, said last night that "sadly" no one apart from its bank, Ulster Bank, was likely to receive any money. The Irish Times is among the company's creditors.

Ulster Bank, which provided funds for the takeover of the advertising firm just over two years ago and which operated an "invoice discount" scheme for it, is owed €3.46 million. It has specific pledges on a debtors' book with a stated value of €3.2 million and on assets valued at €55,000. This leaves it with a shortfall of approximately €176,000, according to a statement of affairs prepared by the company.

The statement of affairs is for August 25th, 2003, with creditors' balances given for July 31st, 2003. Some creditors told the High Court in September that they were owed amounts that are in excess of those contained in the statement of affairs. These amounts are understood to refer to a later date.

The Revenue is owed €628,000 and employees €137,500, according to the statement of affairs. Unsecured creditors are owed approximately €2.7 million, including directors' loans of €280,000. The directors are Mr Beggs and Mr Antony Martin.

The former owners of the advertising firm are understood to be owed approximately €700,000 still due to them from the 2001 buyout deal. Approximately €300,000 of this is understood to be guaranteed personally by Mr Beggs. This debt does not form part of the creditors' total. Mr Beggs said last night that he would be able to pay this money. "I don't guarantee loans I can't repay," he said.

The firm was sold to Mr Beggs and Mr Martin, along with a third investor, Mr Liam Gaskin, for €5.9 million. The consideration included the firm's former premises at 105 Lower Baggot Street, Dublin, and payments to be made after the sale date. The former owners were Mr Don O'Connell, Mr Peter Boden and Mr Dermot Nealon.

Up to its collapse Doherty Advertising was one of the largest advertising companies in the State, placing €7.9 million in ads in 2002. The company ceased trading in August and has since been placed in liquidation. It had 36 staff.

Mr Beggs said the main causes of the firm's collapse were the payments that had to be made to the original owners; the downturn in the economy; and the collapse of the Dublin Daily. He said the company was profitable up to the time of its collapse.

Invoice discounting is a scheme whereby a bank loans money to a company on foot of invoices produced by the company in connection with work done. The bank forwards money to the company on foot of the invoices and the company, when it is eventually paid by its client, places the money with the bank.

It is standard practice as part of such deals that the company agrees to lodge all payments on the relevant invoices to the bank operating the scheme. In the case of the scheme involving Ulster Bank and Doherty Advertising, Mr Beggs said the company paid daily interest and an annual fee. He said funds that came from sources other than the invoices on which discounts were paid, could be lodged to non-Ulster Bank accounts.

Sources said Mr Beggs and Mr Martin brought very little capital to the deal when they bought Doherty Advertising. Mr Gaskin is understood to have invested in excess of €600,000.

The 2001 purchase of Doherty Advertising involved it being taken over by a holding company, Craigbury Ltd. The company is currently listed for strike-off from the Companies Register. Mr Beggs said audited accounts would soon be filed.