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Monday, 31 January 2011

KSA Group takes on two regional managers

KSA Group are pleased to announce that Gary Weber and Malcolm Gray have joined us in 2011 to help us expand our services to struggling companies in the South East. Both are passionate about helping companies survive, rather than be closed as a first option, in these difficult times. Gary and Malcolm can give free and impartial advice on a meeting with any company director or professional.

Malcolm Gray - Regional Manager - London East.

Malcolm is passionate about helping companies having been a director of a
building company that found itself in difficulties when public sector contracts were hard to come by. Therefore, he knows what some companies are going through. He wishes he had better knowledge at the time of the rescue tools available for struggling companies. He now wants to inform and advise other companies facing similar problems.

Malcolm divides his time between his young children, work outs at the Gym and a little Golf. Malcolm covers the region East of London including Kent, Essex, East Sussex, Cambridgeshire, Hertfordshire and Suffolk.

You can call him on 020 7877 0050 or 07739 325 009
or email on

Gary Weber - Regional Manager - London West

Gary joined KSA Group in late 2010 to help us expand our services in the South East. Gary is passionate about helping companies having been an owner and a director of a number of businesses in industries including pubs, catering, road haulage, and retail. Therefore, he has a very broad business experience and will listen to directors with empathy and offer good advice on how a business could be turned around. He is particularly keen on the company voluntary arrangement mechanism and how it can help struggling businesses. Gary covers the region west of London including Surrey, Hampshire, Oxfordshire, West Sussex, Berkshire and Buckinghamshire.

Gary divides his spare time between walking his dogs and spending time supporting his son's rugby and scout activities.

You can call him on 020 7877 0050 or 07739 325 008
or email on

Sunday, 30 January 2011

CVA Case studies

Any company directors or professional advisory firm, looking for a reliable turnaround advisor should look past the often baseless marketing claims made on glossy websites and in media adverts. Look for substance, experience and free quality information. Can you, by reading the website, actually see who the company is? What professional bodies are they members of? Does the site give contact details of the senior people? If not it is probably not a reliable, regulated firm.

KSA Group works on rescues and turnaround projects every day, many of the websites purporting to do the same are in fact marketing "fronts" set up to convince people that there is a genuine firm behind the claims. ALWAYS ask what experience the principals have when making contact.

We recently published the 40th CVA case study on our main advice website; - the truth is we could publish many more if we had more time! All of our case studies are based on real rescues, real directors, real employees and real debts. We cannot publish the client's names very often because the CVA approach is discrete and the company doesn't want to have their name all over the internet. But we guarantee that every one of our near 50 online case studies is based on a real case.

If you or your client are looking at the company voluntary arrangement path as a possible solution we strongly recommend that you read as many of our successful case studies, as well as about our failed CVA case studies as you can. This will help you get a rounded picture from real life case studies.

Our aim in 2011, will be to publish 1-2 new CVA case studies every week, so we suggest setting up the following web page as a favourite in your web browser:

Posted by Keith Steven

Thursday, 27 January 2011

Successful CVA ends 3 years early for Midlands Engineering Company

A good news story in that one of our clients has exited their CVA 3 years early with a final payment of 30p in the pound. This is a good result and had the full support of the creditors.

For the full case study see below;

KSA Group rescues a Midlands engineering business and exits the CVA 3 years early

Tuesday, 25 January 2011

GDP figures show contraction of 0.5%

The latest GDP figures for the UK confirm the belief that many have held that we are not out of the economic woods yet and that 2011 will be a tough year.  We have seen a rise in the number of struggling companies contacting us which reflects these latest figures of a 0.5% contraction.  The impact of the December snow did weigh heavily however. 

The picture is mixed in that some regions are struggling more than others and some industries are fareing better.  Scotland in particular is struggling whereas bigger businesses are doing better.  However smaller firms in all industries are feeling the pressure.

About a year ago in the City business people would ask each other whether they were "double dippers" meaning, of course, do you believe that a second recession is likely.  So could that happen?  If we have another quarter of negative growth, Yes.

Richard Lambert of the CBI was berating the Coalition for concentrating too much on deficit reduction and not enough on growth.  Perhaps he saw these figures early...   It is easy to snipe as both of them are dependent on each other and it is politics, as opposed to economics, that determines which side of the coin is favoured. You can't have some growth without deficit reduction and you can't have some deficit reduction without growth.

We shall have to see what happens.  Unfortunately for companies just "seeing what happens " is not really an option.  It is important to have a plan, incase you find yourself in difficulty, and so know your options. 

The longer you leave it the less options you have, especially if the bank or creditors start legal actions such as winding up petitions.

Monday, 24 January 2011

Herriot Safety by Design Ltd in liquidation

KSA Insolvency Notice

Herriot Safety by Design Ltd - Meeting of creditors

Level 7, Tower 42, 25 Old Broad Street, London, EC2N 1HN on 9 February 2011 at 2.15 pm

Business insolvencies predicted to increase

Begbies Traynor have published their Red Flag Alert that paints a decidedly gloomy picture for businesses going into 2011.  The report forecast a 10% rise in insolvencies in 2011, which would lead to 23,500 firms being affected.

Compared with the July to September quarter, there was an increase of 20% in the number of companies experiencing "significant" or "critical" financial problems according to the report.

This has been reflected in our enquiry levels.  However, the regional breakdown is of significant interest but Begbies Traynor are no longer publishing this data.  We are finding that Scotland is feeling the pressure at the moment.  This could be due to a whole host of reasons - More agressive creditors, actions of HMRC and perhaps the weather could have been the last straw. 

The role of the banks could come into the mix as it has been reported that the government's attempts to persuade banks to increase loans to small businesses is hitting trouble. The banks argue that lending targets for what might be weaker businesses could breach rules that say any decision should be in the best interest of shareholders.  Given that the shareholders are in many cases the tax payers, who are also likely to be affected by small business closures, then 2011 could be a very contentious time.

Thursday, 20 January 2011

More Scottish Firms Insolvent

The number of companies going into administration or liquidation in Scotland has reached a new record according to figures released by the Accountant in Bankruptcy, the insolvency service for Scotland. 1,098 companies were deemed insolvent which represents an increase of 45.8% on the previous 12 months and a rise of 21.2% on the previous highest figure of 906 from 2002.

Again, this may be due to the fact that there really is no rescue culture in Scotland. CVAs are not usually considered as there is a presumption against allowing the debtor a second chance and there is a mistaken belief that HMRC in Scotland will not support a CVA.

For more statistics and details insolvency in Scotland and help for Scottish based businesses then please refer to our Scottish rescue page

Wednesday, 19 January 2011

Dorin Construction in Administration

John W&S Dorin, which traded under the name Dorin Construction, along with four associated businesses, has gone into administration with the loss of nearly a 100 jobs.  The firm was founded in 1981 and was a major employer in the North East.  Last year the company had a turnover of £16m.

Following tight margins and the poor weather last month the directors of the group called in administrators at PricewaterhouseCoopers (PwC) on Monday.

Directors can appoint administrators directly.  For an explanation please take a look at our detailed pages on administration.

The company, had both public and private sector clients, specialising in care homes, rehabilitation centres, school and hospital refurbishments, social housing and commercial developments.

Only four staff remain at the firm, but the administrators have said that they are attempting to secure a buyer for some or all of the business.

We have expertise in the turning around of construction companies having saved one using a CVA.  Although administration can be the right solution as well.  For the details of this rescue and many more cases please view our case studies page

Tuesday, 18 January 2011

Further difficulties for HMV

With all the reports on the increase in inflation to 3.7% one piece of business news that was pushed down the agenda was the further troubles of the high street retailer HMV.

Robert Peston was brought onto the Radio 4 PM programme to "break the news" that 2 major music and entertainment suppliers had been denied credit insurance for any additional supplies to HMV. The withdrawal of this suppliers credit insurance has, in the past, been a precurser to more serious problems but this is normally because if the suppliers refuse to supply then a collapse is likely. This was a factor in the falling into administration of the Borders book chain.

However, HMV are not purchasing much stock at the moment and it is possible that the credit insurers have changed their attitude to risk. Importantly for HMV, current suppliers have said to Robert Peston, at least, that HMV is crucial for their business and so will continue to supply the retailer.

So, as far as the music and entertainment retail industry is concerned it appears that "We are all in this together"

Monday, 17 January 2011

Eurotek Furniture in administration

Eurotek Furniture Supplies, one of Bognor Regis's biggest employers, has gone into administration. The firm had a turnover of almost £10m and employed 130 staff. The company had recently open an show room in London as it sought to expand so the company's problems came as a surprise.

Stuart Maddison, at PwC said: "The company has suffered as a result of the ongoing economic challenges facing the public sector which represented approximately half of its customer base. Due to a sharp decrease in sales, difficulties in meeting the company’s financial obligations, and having run out of alternative options, the directors of the company have placed it into administration."

The business is continuing to trade as a going concern and a buyer is being sought.

Given that half of its custom was public sector it is perhaps not surprising that it has found itself in difficulty.

The directors of any business that is exposed to public sector contracts need to have a long hard look at their business plan and be prepared. Some contracts may have long termination periods whereas others may be informal.

Business owners need to think about private sector clients or customers who are in turn exposed to the public sector. This is not always so easy as many businesses do not like to advertise that they have been making big profits on the back of government spending.

If the worst should happen make sure you have read our cost cutting pages to ensure that you preserve cash.

Friday, 14 January 2011

New Liquidation Report

A liquidation report contains the following; Notice of our appointment, a report to the creditors outlining the circumstances, a statement of affairs (SOFA), estimated deficiency account, summary of recent financial history, and a list of creditors.

These documents are sent out to all creditors as required by the insolvency rules 1986.

Please find below the latest published reports.

Tonys Bar Cafe Limited - Liquidation Report

British Bookshops in Administration

British Bookshops, the book chain with 51 stores across the country and employing 300 staff, has gone into administration following difficult trading conditions.

Administrators from Zolfo Cooper said the company would continue to trade as normal, and no job cuts have been announced.

British Bookshops' administration has taken many in the trade by surprise according to thebookseller website. The chain was thought to have had a very poor Christmas, a belief confirmed by its administrator. Its website stopped trading at the weekend.

The administrators are looking for a buyer. It has been reported that publishers have halted all supplies to the chain.

It is not clear who appointed the administrators at this stage or exactly why. However, their banks could have called in their debt and so appoint administrators. To see how the bank can do this have a look at our detailed administration guide page. Alternatively, they could have been served a winding up petition which could have mean't that winding up or administration was the only likely option. Although, no winding up petition has been advertised yet, which is usually the tipping point.

Was a CVA or company voluntary arrangement considered? A CVA will only work if the directors recognize the problems early and take appropriate action. A CVA may well of allowed the company to source books from the publishers going forward and multiple branches could have been closed if neccessary. Of course, a sudden collapse in sales over christmas is difficult to predict but we suspect that this may of been the last straw.

We blogged on the subject of retailers struggling recently here with some case studies of how a CVA can help retailers.

Wednesday, 12 January 2011

Haulage business uses CVA - A case study

A company voluntary arrangement (CVA) was used to rescue a haulage business in East Anglia. The CVA tool was the preferred choice of rescue tool over pre-pack administration because of the operator's licence (OL) issues. A CVA allows the operator's licence to remain in situ with the company, whereas in a prepack administration there would have been a major logistical problem getting the OL, especially for a new clean company - how would it show that it had sufficient working capital to satisfy the operator's licence rules?

For the detailed case study please refer to our page on KSA Group uses a company voluntary arrangement to rescue a Haulage business in East Anglia

Further examples that KSA has turned around or closed in the haulage sector:
Car transport and Caravan transport Company £2.5m sales; CVA and hands on turnaround management for 12 months
Cold Store and Logistics companies with group sales of £10m and 1m space under management CVA’s

Monday, 10 January 2011

Les Taylor Contractors in administration

Aberdeen-based Les Taylor Contractors and sister company J.G. Fowlie were placed into administration on Friday. Les Taylor Contractors specialised in civil engineering and quarrying work, but the company made pre-tax losses of £5.71million in 2009 in comparison to profits of £4.05million in 2008.

The firm employed 155 staff, and demolition contractor J.G. Fowlie had 37 workers. The majority of the employees have been made redundant with the remainder helping the administrators.

The firms were the main divisions of the Les Taylor Group and their collapse was blamed on a major downturn in demand for building-services work.

Administrators from accountants Ernst and Young said their work now was to realise assets on behalf of the companies’ creditors.

We have often complained about the lack of a rescue culture in Scotland as virtually all the businesses that are in difficulty are put into administration or liquidation. Has a company voluntary arrangement been considered? If not why not! This is something we are hoping to address. Please take a look at our pages on the company voluntary arrangement or CVA process for information on what a fantastic rescue tool it is.

If you are a struggling Scottish business there are other options! Contact our Berwick upon Tweed office on 01289 309431.

Administration for Fridays Property Lawyers

A legal firm which said it was the UK’s fastest growing conveyancing company, has gone into administration. The firm was Fridays Property Lawyers which was a conveyancer and provider of the Home information Packs (HIPS). Ironically, Which? said that it was the cheapest provider of HIPS, at just £189, some £300 cheaper than the most expensive offering. Their website has been purchased by a new company and it is in the process of being updated.

The administrators said in a statement “The company has closed down their operation following a period of rapid contraction resulting from the abolition of Home Information Packs. The company initially grew rapidly as a result of its HIP offering and became reliant on HIPs as a primary generator of new business. We are working with the Regulator (CLC) to ensure that all live cases have been transferred and will be completed with no delay or disruption to clients. Clients have been contacted and notified of the situation. " Given that this firm was undercutting the market by a huge amount ( it was offering conveyancing at a fixed price starting at £89 it seems that the business simply ran out of cash )

The abolition of HIPS was a big U-turn for the government but given they had not consulted with the property profession properly before introducing them it should not come as a surprise that they were a disaster.

Sudden changes of government policy can have a big impact on business and are not conducive to a stable economic environment.

If your business has been badly affected by legislative changes, all is not lost! Contact us if you need help.

See Enterprise in Liquidation

KSA Insolvency Notice

See Enterprise Limited in Liquidation - Meeting of creditors at the offices of KSA Group Ltd, C12 Marquis Court, Marquisway, Team Valley, Gateshead, NE11 0RU on 27 January 2011 at 11.00 am.

Friday, 7 January 2011

Growzest Limited in Liquidation - Meeting of Creditors

KSA Insolvency Notice

Growzest Limited in Liquidation - Meeting of creditors at the Holiday Inn, Emerson Road, Washington, Tyne and Wear, NE37 1LB on 28 January 2011 at 11.30 am.

Nortel Networks and the Pensions Regulator: is CVA the answer?

In the recent case of Nortel Networks and the Pensions Regulator, Mr Justice Briggs has ruled that meeting Financial Support Directions (FSDs) and Contribution Notices (CNs) from the Pensions Regulator are an expense of the administration.

An FSD is a direction by the Pensions Regulator that a company within a group has to support the pension of another company in the group, if that company doesn't have the financial resource. The case is important as the company that was subject to the FSD went into administration.

This could mean that any company that is connected to another company with a defined employee benefit pension, that has a shortfall, could be in the event of becoming insolvent (and enterring administration) required to have that shortfall as an expense of the administration.

Time will tell if this ruling stands, or a different decision is reached on appeal.

What does this mean for the rescue culture and our preferred tool the company voluntary arrangement (CVA )?

As a CVA is not subject to the same rules in relation to expenses in administration, this ruling may make a CVA a more attractive insolvency procedure. An administrator may be reluctant to take on an administration if they felt that there was a risk of the liabilities of an FSD being paid as a cost of the administration, prior to their own fees.

So how should this potential liability be treated? Could it be a contingent creditor?

A contingent creditor would be allowed a vote at the creditors meeting worth £1 but what if, post CVA, the company was made subject to an FSD what would be the affect on the dividend? Given pension deficits can be substantial then the dividend could go from being 50p in the pound to 5p. There would then need to be another creditors meeting and the creditors may reach a different decision. Of course the Pension Trustees may also wish to support the revised CVA scheme and with a large vote this may see the CVA approved once again.

The question should also be asked as to why anyone would wish to issue an FSD to an insolvent company. However, it could still happen as in a large corporate group with some solvent and insolvent businesses the financial health of the parts might difficult for the pension regulator to establish.

In summary the ruling seems likely to make some rescues by administration much more difficult and the CVA, in our view could become the attractive option.

Thursday, 6 January 2011

Retail sales falling - What can retailers do?

With high street sales expected to fall in the coming months retailers are unsurprisingly nervous, especially following a poor Christmas trading period. Recently Clinton Cards and Mothercare have issued profits warnings and HMV and Next have reported lower sales.

However, all is not lost for multiple outlet retailers as some stores maybe performing well and some underperforming. So, if you need to close down underperforming stores quickly for the good of the whole group this can still be done using a well crafted CVA.

Using a CVA to close underperforming stores and reduce employment and overhead costs can be a powerful rescue tool for small and medium sized businesses as well. Please see our example where KSA restructured a small retailer and led the closure of 5 furniture and gift stores in London.

For more details on how we can help struggling retailers please refer to our page for struggling retailers. We have used the CVA mechanism very successfully for a number of retail clients and one of them (a mid sized fashion chain with high street, mall and factory outlets) will be more than happy to talk to any prospective client.

Wednesday, 5 January 2011

HMV Group Sales Suffer In The Cold

HMV Group, the entertainment retailer, reported that its like-for-like sales fell 13.6% in the last 5 weeks.

In a statement the company said that it had experienced, "challenging entertainment markets, combined with the severe weather over the peak trading period". HMV Group admit that it was not just the weather but also a fall in demand for CDs, DVDs and Games, that impacted sales.

HMV Group said that it would be taking "aggressive action" to lower its costs and it expects to close in the region of 10% of its retail stores.

Several hundered jobs will be cut across the group with the closing of 40 HMV and 20 Waterstone's stores.

The firm also said in its trading statement - which was issued a week earlier than planned - that it was struggling to avoid breaching the terms of a bank loan. The banks again are the important players in the fate of the group. The bank has the power, as a secured creditor, to appoint administrators if it feels it is in the bank's best interest. It sounds as if HMV are taking drastic action which should hopefully avoid this scenario. Of course, some retailers such as Blacks Leisure have used a CVA as an alternative to administration. Blacks Leisure is now trading very well with sales UP 10.2% in December, and is attracting the interest of buyers.

Another retailer, Next, saw retail sales drop 3.1% between 1 August and 24 December.

In its trading statement it said it was hit by the extreme weather conditions and increased competitor discounting on the high street before Christmas.

"We estimate we lost £22m of full price sales as a result of the snow representing 2.2% of the season's total sales," it added.

In essence the health of the UK retail industry is always keenly watched by economists as consumer spending is such a driving force in our economy. The government will be watching retail sales closely to assess the impact of the VAT rise. This is not expected to have much of an effect yet as many retailers have said they will not put the price up of existing lines and stock.

Tuesday, 4 January 2011

Businessman's New Year's Resolution - Take Necessary Action!

If you think that your business is failing it does not mean that you are a failure!

Many wealthy entrepreneurs have had to start again after ventures have not worked out. The important thing is to learn from it!

We have created a new page on our site called - My business is failing what should I do? The most important thing you can do is ACT, and if necessary take professional advice. We have lots of tips on how to save cash and costs on our website but don't be afraid to give us a call if you need further help.

Business prospects in 2011

2010 was in many ways a good year for some businesses. Larger businesses faired quite well with listed company's shares ending on a high as the FTSE 100 rose to over 6000. Apart from a couple of high profile collapses in the building sector, large businesses have been able to cut costs and have benefited from low interest rates.

The outlook for small to medium sized businesses is more uncertain with discretionary spending perhaps being reined in. The recent poor weather has hurt fragile businesses that may not have sufficient resources to cope. Rises in VAT, employers National Insurance, and business rates will have an impact on small businesses.

In 2011 the most vulnerable sector looks to be the leisure sector as they have missed out on important christmas trading. If last year is anything to go by we may well have a snowy January as well!

The real test will come if there is a rise in interest rates this year to stifle inflation. People in work with mortgages have seen their disposable incomes hold up well but rising prices and an interest rate rise is likely to be a dose of reality.

We are helping an increasing number of businesses in the leisure sector to reorganise and recover.

If you have cashflow problems, as a result of the weather, then it may be possible that your creditors will be more sympathetic. Best to talk to them as they will have had problems of their own. Doing nothing is not a good start to the year! If you feel you cannot do this, or the problems too complex, then talk to us. We offer at least a 30 minute discussion with our professional advisors.

There are solutions such as; trading out, a company voluntary arrangement, administration, or in the event that the business is not viable going forward - then liquidation. There are many different options and we have lots of different pages on our website at to guide you through the process.
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