The Croydon-based chain Children's Paradise, which catered for 111 children aged three months to five years at the time of its last inspection in May 2005, closed down on 16 December.
The south London company is not thought to have recovered from the loss in income incurred since July, when many parents were forced to find alternative childcare after Ofsted temporarily closed down the settings because of health and safety concerns.
Insolvency practitioners Kallis and Company are now in charge of sorting out the company's assets and getting parents the money they are owed from deposits and advance fees.
Mandip Phlora, the administrator working on the case, confirmed that both staff and parents were still owed money. But he said, 'At this stage it looks unlikely that parents will get it because there are insufficient funds in the company. Employees can get their money from the National Insurance fund, from the Government's redundancy office.'
A spokesperson from Croydon Council's Children's Information Service said that within the month of closure, they received more than 20 complaints about personal and council-funded fees not being returned. She said, 'We helped parents find alternative care and took the company off our list of recommended childcare.'
Tricia Pritchard, senior professional officer at the Professional Association of Nursery Nurses, said that although such a situation is not common, it's 'not as rare as you would hope'.
Ms Pritchard said, 'Last year we received an unusually high number of similar cases. Members from three different settings contacted us to say they were out of a job and owed money because their nursery had become bankrupt.
'The situation cannot be prevented but there are often tell-tale signs, such as not being paid, that should alert you to a problem. Because of the nature of this business, these signs are often ignored because staff do not want to let the children down.'
An Ofsted spokesperson said, 'All three nurseries called Children's Paradise are currently registered with Ofsted. If a nursery decides to close they are required to inform Ofsted immediately.'
The former owner of Children's Paradise was out of the country and unavailable for comment.
