The company that won the rights to produce and sell official Isle of Man TT merchandise owes around £160,000 to the Government.
Minister for Enterprise, Tim Johnston MHK, said he was aware of other businesses on the island that Cube International owed money.
At the start of 2023, the Department of Enterprise announced that Cube International Ltd had won the contract to produce and supply all official merchandise for the famous Isle of Man TT Races.
But yesterday, the government revealed it had terminated the contract with the firm after it failed to fulfil its 'required financial obligations' as part of the deal.
Speaking on Manx Radio this morning, Mr Johnston said: 'Clearly there's been issues with the company (Cube International), they've been struggling.
'They (the company) owe about £160,000 now to TT Motorsport.
'We're also aware that some businesses on island have dealt with them and we want to make sure that we work hard to recover those funds both for those businesses and for TT Motorsport.
'That's something we'll be doing over the coming months.'
Cube International, a sports retail, e-commerce and licensing business replaced the Isle of Man's Motorsport Merchandise as the event's official merchandise supplier after winning a tender from the government at the start of the year.
The contract allowed Cube to design, source and sell official Isle of Man TT merchandise to retailers, official events shops and online.
Based in Worcester, the company had previously supplied official merchandise for the Rugby League World Cup, the Commonwealth Games, World Athletics, LIV Golf, Rugby League World Cup, Aston Martin and Williams Formula 1 teams among others.
In August, the firm said it was already developing a 'new range of Merchandise for the 2024 Isle of Man TT Races'
However the government announced yesterday that its contract with Cube International had been terminated with immediate effect due what it called a 'breach in terms', saying it had 'not taken the decision lightly'.
The Department for Enterprise says it will now run a full tender process for the appointment of a new long term partner with timelines that will ensure the production and licensed supply of Official TT merchandise ahead of the 2024 event and beyond.
The news marked another development in what has been a troubling few months for Cube International
Back in August, it was announced that a subsidiary of the company called Cube Partnership Ltd had gone into administration.
Records held by Companies House in the UK showed that Cube Partnership had debts of over £2m when it appointed liquidators back in July.
When news of the subsidiary firm's closure broke, Cube International Group's chief executive officer Andrew Graham said that its companies had managed to 'successfully deliver at the Isle of Man TT’ despite the partnership 'carrying too much debt'.
It also said that Cube International Ltd was continuing 'to trade through the historic challenges'.
In a statement issued yesterday, Mr Johnston MHK said: 'The Department has been required to take this action as Cube International Ltd have failed to fulfil their required financial obligations attached to this contract within the stipulated period and are in breach of their contract terms.
'The decision to terminate has not been taken lightly and is the result of circumstances that have rapidly become untenable, however the provision and supply of official merchandise plays an essential role within the TT’s overarching strategy and is also a key source of income for many retailers as well as the Department and it is our responsibility to act to protect the interests of all involved parties.
'It is acknowledged that the termination of this contract will be unsettling for many of the Island’s businesses and retailers and whilst the Department works to facilitate the essential supply and delivery ahead of the 2024 TT Races, the priority of the Department is to work closely with those that will have been impacted by the termination of contract.
'The Department has been in contact with all wholesale retailers and suppliers that have worked with Cube International Ltd prior to the contract termination being announced publicly and intends to continue to work collaboratively and transparently in order to secure the continued delivery of product ahead of 2024.'