A supplier has spoken of feeling “betrayed” as it is left £20,000 out of pocket due to the collapse of Carole and Michael Middleton‘s business Party Pieces. The party supplier firm founded by the Princess of Wales‘s parents went under with a shortfall of about £2.6million to suppliers, lenders and the taxman, administration filings show.

Party Pieces Holdings was founded by Carole and Michael Middleton in 1987, but fell into administration in May.

The company was immediately sold to entrepreneur James Sinclair in a pre-pack administration deal. Party Pieces blamed the impact of the Covid pandemic on the party market and pressure from the cost-of-living crisis for its failure.

It is a collapse which has left small suppliers stunned and out of pocket when they might have expected with the Middletons’ royal connections that outstanding debts would have been addressed.

Kent based Sultani Gas, which supplied Party Pieces with helium for its balloons, is owed £20,430, according to the administrator’s report.

A spokesman for the company said this week they felt betrayed by Mrs Middleton.

He added: “What hurt me the most was that I trusted her as the mother-in-law of the future King and she just betrayed me. It is absolutely unacceptable.”

Party Pieces has been based on Lord Iliffe’s Yattendon estate for a number of years, but it is owed £57,480.

Agent James Hole told MailOnline the estate faces “severe financial consequences”, adding: “They have been long-term tenants. We were astonished about the amount of money owed to others.”

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Party Pieces saw its revenues shrink to £3.2m last year from £4.5m in 2021 and slid to a £900,000 net loss before tax as a result.

A report from administrators at Interpath Advisory said they were hired and oversaw the rescue sale after previous takeover attempts could not be agreed.

The report said the firm had an estimated £197,739 worth of assets to return to preferential creditors. However, Party Pieces was £2.59m short of what it needed to pay off its long list of debts, according to the filings.

The company, which had only a dozen employees at the time of its administration, owed £612,685 in tax. Its debts include an outstanding debt of £218,749 to Royal Bank of Scotland related to a coronavirus business interruption loan.

Meanwhile, trade creditors – which included Royal Mail, Google and Solihull Moors Football Club – were owed a total of £456,008.

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But because Party Pieces is a limited company, the Middletons have no personal responsibility, from a legal standpoint, to repay any of the debts.

This means ordinary Britons are on the hook for the failure of a business founded by the Middletons and which made them millionaires.

Will Wright, head of restructuring at Interpath and joint administrator, said last month: “Party Pieces is a well-established brand with a proud British heritage, but like many other companies across the retail space, had been impacted profoundly by the effects of the pandemic and the ensuing restrictions on social gatherings.

“We’re pleased to have been able to conclude this transaction which sees the business acquired by James Sinclair. We wish him all the very best for the future.”

A friend of the family has said Mrs Middleton has tried hard to find a solution to make sure creditors get paid and continues to make efforts to do so.

The friend told MailOnline: “The truth is Carole had stepped back from the business over three years ago, trusting the day-to-day running to a new management team.

“Sadly, the business took a turn for the worse and by the time she realised, it was just too late.

“Carole believes in accountability and accepts she had been a little naive to step back and trust someone else to run the business she had spent decades nurturing and it’s been desperately sad to see the company sold off in this way.”

Kate, Princess of Wales, used to work for her parents’ firm, but left to prepare for her life in the Royal Family.

She was featured on the Party Pieces website in March 2010 when she posted some comments about her childhood.

A keen photographer, Kate also took pictures for the business.

The princess’s sister Pippa has also worked for Party Pieces, on its online magazine The Party Times.

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