Ossett-based Eric France Metal Recycling went in to liquidation after a creditor’s meeting on Tuesday.
The company, which was rapped by advertising watchdogs in 2011 for some advertising posters featuring scantily clad women, has ceased trading with the loss of 18 jobs.
KPMG and pwc have been appointed as joint liquidators of JKL (Wakefield) Ltd, which trades as Eric France Metal Recycling.
A KPMG spokeswoman said that according to the directors’ statement of affairs, £21m of the company’s total debts of £22m relate to unpaid VAT.
David Standish, joint liquidator and partner in KPMG’s restructuring practice, said:“The company has ceased trading and unfortunately all 18 employees have been made redundant.
“The insolvency is due to significant historic debts owed to HMRC. (Her Majesty’s Revenue and Customs.)
“I would now welcome hearing from anybody with information about the company and I can be contacted at KPMG, 1 The Embankment, Neville Street, Leeds, LS1 4DW.”
A Wakefield Wildcats spokesman said: “It appears highly unlikely that Eric France Metal Recycling will be able to fulfil their commitment of a significant six-figure sum as the Club’s main sponsor.
“Whilst this is a hole to fill in the Club’s budget, the areas of sponsorship available are the most prestigious with main shirt sponsor, East Stand sponsor and the back of the playing and replica shirts, making it an attractive proposition to a number of companies.
“The Club is active in the market in its attempts to find a replacement sponsor and when such a time comes that this is achieved, supporters will be consulted about the range of replica merchandise that carries the Eric France brand.”
Meanwhile Dewsbury Rams said its Eastern Terracing project would continue despite the announcement.
A spokesman said: “As most supporters are aware the club’s Main Sponsor, Eric France, is no longer trading and is in Liquidation and our sympathies go with those employees who have now lost their jobs through this action.
“Consequently, the Sponsorship deal signed in late 2012 has ceased with immediate effect resulting in a significant shortfall in the budgeted income for Seasons 2013 and 2014.
“The Directors and Shareholders of the club have been working with Eric France as well as potential new sponsors of the club for some weeks to try to alleviate the situation and secure the medium term future of the club.
“Unfortunately this has come hard on the heels of the failure of the club’s lottery arrangement with the Bradford Bulls which became unsustainable due to a significant drop in membership particularly from our area. The club has already launched a new lottery to revitalise this part of the business but until this lottery is up to full strength there will be a negative financial impact on the club.”
Eric France ran a controversial advertising campaign for a number of years.
The campaign featured posters of scantily clad women which were plastered on billboards and on buses.