Please visit http://www.companyrescue.co.uk/ for confidential help and insolvency advice or email keiths@ksagroup.co.uk

Friday, 30 September 2011

Insolvency rate reaches a 5 month low

The latest Insolvency Index from Experian  has shown that the rate of insolvencies dropped to 0.08 per cent in August, its lowest point since February.   This should be seen in the context of the insolvency rate in the first quarter of 1992 when 0.82% of businesses were failing.  So 10 times as many! The highest insolvency rate so far recorded, post credit crunch, was 0.24% in the construction industry in the first quarter of 2009.

The North East and West Midlands had the highest rate of insolvency in August at 0.11 per cent. Yorkshire and the East Midlands were the most improved with an insolvency rate going to 0.13 per cent from 0.10 per cent and 0.09 per cent to 0.07 per cent respectively.  The best performing region with the lowest insolvency rate of 0.06 per cent was the South West.

The North East is perhaps more dependent on public sector spending than other areas which may go some way to explain the differences.

If your business is based in the North East and you are struggling then speak to Eric Walls our Director of Turnaround and Insolvency based at our Gateshead Office 0191 482 3343.  We will go through all your options.

Thursday, 29 September 2011

Alexon pre pack administration likely

News has leaked that Sun European Partners are the most likely to buy the assets of Alexon Group plc in a pre-pack administration.  This morning Alexon's shares were suspended while the company clarifies its financial position.  However, there are other possible buyers in the frame who will have submitted bids by September 16. 

Alexon Group plc has suffered on the High Street, issuing a profit warning on September 5. Earlier this month we blogged that prepack administration was an option for Alexon and that it had appointed KPMG to advise on its restructuring options.

Alexon operates 78 shops and 1,071 concessions and it employs 2,800 staff.  In the event of a prepack administration is used the contracts of the staff will most likely be taken on by the new owner under the Transfer of Undertakings (Protection of Employment) or TUPE rules.

We will keep our readers informed of future developments.

Wednesday, 28 September 2011

Begbies Traynor reports trading in line with expectations

Begbies Traynor, the insolvency and restructuring specialist, said its first quarter trading has been in line with expectations.

Begbies Traynor, who are based in Manchester, make 90% of revenues from insolvency and restructuring activities, said it expects to see some margin improvements throughout the course of the year as the benefits of cost saving measures filter through.

It seems that insolvency revenues are not rising for Begbies Traynor as the insolvency market is still very flat. This is in part due to low interest rates and the continued time to pay support from HMRC.

The firm is still keen to sell its Red Flag Alert service. The Alert service is a credit risk database with 6 million records on businesses in the UK, from sole traders through to limited and quoted companies. It reports quarterly on how many companies are facing "critical", or "significant" financial problems. The last report on Q2 showed a fall of 48% in the numbers of companies with "significant" financial problems compared to Q2 and year on year only an increase of 1%. However, those with "critical" financial problems increased by 12%. Without knowing the exact amounts of "critical" and "significant" distressed companies it is hard to make comparisons.


It is our view that the market will remain flat for the foreseeable future and when the recovery comes in ernest we will see the expected rise in insolvencies, as the weaker companies lose business to stronger rivals and run out of cash.

Tuesday, 27 September 2011

Making Employees Redundant in a CVA

Having to make employees redundant is probably one of the hardest part of any turnaround plan but it can be done at low cost as part of the CVA process in order to save the business. 

Please read our new page on employees redundancy in a CVA

Sony Centre Owner in Administration

The High Street electronics retailer, Sonex Communications, which operated 15 Sony Centre stores in the UK, has been placed into administration. The company made a pre-tax loss of £2.7m in the 12 months to March on a turnover of £23.8m. The firm has cut costs by withdrawing its concessions from 13 Debenhams stores.

In a statement the company said, "The company is faced with an increase in competition, particularly via the internet and major retailers on the high street, the company's gross margins came under pressure during the financial year."

Sony Europe confirmed that it was "business as usual" for the Sony Centres and said that all orders and warranties relating to Sonex will be honoured.

However, administration can  terminate lease obligations and allow the company to move out of premises.

Monday, 26 September 2011

Company Rescue Website Now Online Again

Please accept our apologies for the outage on our website http://www.companyrescue.co.uk/ today.  This was due to a network issue at the server centre and it appears to have lasted some 75 minutes.

We can now start showing you solutions to casflow problems again!

Friday, 23 September 2011

Truro City FC Served Winding up Petition

Truro City Football Club have been served with a winding up petition from HMRC  The hearing date for the petition is the 31st of October.  The owner Kevin Heaney, who is part of a consortium to buy Plymouth Argyle FC, has said there is "no problem whatsoever" with the tax bill, which was "less than £100,000".

The advertisment of the petition will be a problem for the club as not only will it be bad publicity for Truro City FC and Kevin Heaney but it is likely that their banks may freeze their accounts. 

Football club's tax affairs are going to be back in the spotlight as HMRC are challenging the "football creditors rule" in November.  The rule is whereby the players, the leagues and the FA ie certain "football creditors" get preference over other suppliers and the HMRC.

Wednesday, 21 September 2011

KSA Group Launches Insolvency and Cashflow Advice Pages Specifically To Help Law Firms

If you are a law firm, do any of the following apply?


  • Is your practice experiencing cashflow problems?
  • Are you worried that insolvency may affect your ability to practice in the future?
  • You don’t want to risk the SRA Intervention
  • Are you concerned about paying your professional indemnity premiums?
  • Could Legal Services Act (LSA) be a threat to your business model?


If so then you should take a look at our Help for Lawyers Pages

On these pages we will help you distill all of these problems and the options available into a recovery plan. It will set out the preferred non insolvency route and a one or two pronged back up approach. 


We have specific options set out if you are LLP, Partnership or Sole Trader.

We are currently advising 4 law firms, types ranging from LLPs to Partnerships, on how to restructure for recovery.  We have also launched our dedicated telephone number for law firms 0845 519 4930 

Highland Toffee Makers in Administration

New McCowans Ltd, which produces the Highland Toffee bar, has been put into administration despite selling more than 140 million bars a year.  103 jobs, based near Falkirk, have been put at risk but the administrators at Grant Thornton have said that it has received interest from potential buyers.

McCowans as it was known In March 2005, collapsed, but was saved a year later after a deal was struck with an investment company.

If you need advice on how we can rescue a Scottish company then see our Scottish Company Rescue page or give us a call on 01289 309431.

Administration or liquidation are not the only options available to distressed businesses!  Come along to our Seminar on the 12th October and find out.

Tuesday, 20 September 2011

Peacocks lenders ask KPMG to review business

The lenders to Peacocks have appointed KPMG to carry out an independent review of the business amid concerns that it might breach its bank covenants.  Surely it is no coincidence that this has been done a week before the September quarter day when its rents will be due. However, rent is not its main concern as the company has reported borrowings of £647m! and it made losses last year to April of £56.7m.  Most of this was as a result of finance charges. 

Peacocks has been feeling the downturn on the high street and has found it difficult to pass on any increases in costs in cotton.  What is more there has been aggressive discounting from traditionally more expensive outlets that is squeezing the mid-market.

Obviously the lenders can appoint administrators if they feel that it is the best way to protect their secured debt.  If a CVA was proposed then the secured debt would not be compromised but it would mean that the unsecured debtors would receive a dividend on their debt but Peacocks would be able to shed loss making stores for the good of the group.

Pre pack administration for Alexon Group?

Alexon the womenswear retail group is so short of cash it does not have sufficient to stock up for Christmas! 

This is our intepretation from the company's carefully worded statement; The company is "operating with limited headroom against its existing facilities and accordingly there is a clear requirement for additional funding in the short term as it enters the seasonal peak in working capital requirements".  Net debt for the company currently stands at £12.9m.
Alexon has invited proposals to acquire one or more of the Group's brands. Currently the board is considering one offer and it is understood that it is at a "significant" discount to share value.

Brands at the group include:  Anne Harvey, Dash, Eastex, Kaliko, Minuet Petite and Lazy Lu They can be found in 990 stores around the world according to the corporate website.

Is pre-pack administration looming for Alexon Group?

Friday, 16 September 2011

Two businesses for sale

By way of sales of the assets
A Retail Mail Order Business and a Complimentary Fulfilment Business

Based in Kent

Established businesses with excellent client base
 
For further details please see our business and assets for sale page

Winding up petitions advertised increases in August

Our research has shown that the number of winding up petitions advertised in August 2011 was 541.  This is up 8% on the total of 501 in August 2010.  The majority of winding up petitions are advertised "not less than 7 days" before the hearing" which can be a month or so since the petition was served.  A creditor can advertise the petition 7 days after its issue if they want to but that may be counter productive.   The most common petitioner is HMRC for unpaid tax.  They will have sent a 7 day warning letter that they intend to issue a petition.

If the petition is heard in court then the company can be wound up or, to use another term, put into compulsory liquidation.    The Official Receiver (OR) appointed by the court  has a statutory duty to investigate the behaviour of the directors. 

So don't let it get to that stage!  If you have been served a winding up petition then you must act because if the petition is advertised then the bank will freeze the account to prevent "disposition of the assets"  They freeze it because any transaction after the petition can be reversed by the court.  In order to unfreeze the account you will need a validation order which is expensive and takes time as documents will need to be put before the court explaining why you should be allowed access to your account. 

A CVA draft can be presented to the court to stop the petition, but again this can take time. If time runs out  admininistration can be the end result with higher costs and the damaging effect this can have on reputation and goodwill.

Wednesday, 14 September 2011

Economy and Insolvency Statistics

There is much gloom and doom around at the moment. Inflation has risen to 4.5%,  the unemployment rate has increased to 7.9%, house prices have started to fall in the regions, the Eurozone problems are unresolved, and uncertainty about the strength of the growth in the US has persisted.  All this has lead to stock market gyrations and a loss of consumer confidence. 

However,  there has not been any recent large corporate failures.  This time last year Connaught went into administration and people were worried about insolvency.  This month has seen few big cases, if any.   Perhaps many of the weaker companies are fallen already or finding it easier to make cost savings. 

The most likely area where large corporate failures may occur will be in the consuming facing sectors such as the retail, leisure, and travel sector.  The rent quarter day is approaching again and the last one saw Habitat, Moben Kitchens, TJ Hughes and others to become insolvent.

Tuesday, 13 September 2011

KSA Group's New Website

KSA Group announces the launch our new corporate website which outlines how we can help professionals advise their clients on the best strategies to survive these difficult times.

We describe our rescue techniques, our team, our ethos, case studies, and a list of testimonials from happy clients.  More sections will be added over the next few months.

If you feel you can work with us to help get the message across that cashflow problems can be alleviated with expert advice and proven techniques (if dealt with soon enough) then please get in touch.  We will send you our complimentary KSA Group's Insolvency Toolkit as well.

Navyblue to go into liquidation

Navyblue, the fashion designer, which has UK offices in Edinburgh and London, has announced that it is to go into liquidation.  Only in 2010 the firm won an award for Agency Designer of the Decade. 

The consultancy says in a statement, ‘Despite continued support from our bankers to address current economic and trading pressures, our recent “internal” problems have proved too difficult to overcome.’

These internal problems relate to the sudden departure of one of the founder Douglas Alexander who was suspended due to a "breach of company policy"  No doubt the details will come out of the liquidation report which will be published once a liquidator has been appointed. 

The directors have said that the company has gone into liquidation.  However, in most cases, what has happened is they will have instructed an insolvency practice, like KSA Group, to act as liquidators.   This formal appointment will be made at the creditor's meeting, notice of which will be published once a date as been decided upon. 

Navyblue also has offices in Oman and South Africa which it is understood will be unaffected by the liquidation

CVA Seminar in Scotland

Our Company Rescue Seminar in Scotland is now on the ICAEW Calendar for 12th October. 

Come and learn how the CVA mechanism can be used in Scotland. 

KSA Group propose the highest number of CVA’s in the UK and we have a success rate of over 90% creditor approval. As such, we would like to involve Scottish professionals in promoting this excellent rescue technique.

Monday, 12 September 2011

Sutcliffe Furniture in Administration

James H Sutcliffe and Sutcliffe Furniture, that have been family owned for almost 125 years, have been placed into administration.  The firm based in Todmorden employed over 100 people and only 10 people have been left on to help the administrators BDO .

The company has ceased trading and 100 of its 110 employees have been made redundant.

The administrators said that they are continuing to seek a buyer for the company's assets but they had to close the business due to difficult market conditions and cashflow problems.

Todmorden Town Councillor, Anne James (Lib-Dem, Cornholme) said the firm’s demise was a big and sudden shock.


“It’s one of the biggest employers around here and will have an impact on other businesses and the community,” she said.

Winterhill Largo Expands In London

Winterhill Largo has moved to larger premises in London's Percy Street to facilitate expansion of its asset recovery and insolvency support group the company which has its head quarters in Yorkshire, has relocated and expanded its London office as the firm seeks to grow in the capital.

KSA wishes Andrew  Dunbar who heads the London office, Neil Duckworth and Paul Snook all the best with their new venture.

KSA has used the firm for pre-pack administration valuation / support work and for debt collection work recently.

Friday, 9 September 2011

HMV sales still sliding

HMV has put out yet more disappointing results today showing that like for like sales are down 15.1% in the 18 weeks to September 3.  They are pressing ahead with six "Fast Forward" stores - where up to 25% of floor space is devoted to gadgets such as iPods and tablet computers - In the same period HMV recorded a doubling in like-for-like sales in these stores.  This is a good thing but it is perhaps too little, too late.  The writing on the wall for the current business model has been around for at least 3-4 years.

Argos and Homebase owner Home Retail Group, PC World and Currys parent Dixons Retail and chocolatier Thorntons have all recorded falling sales this month in what is turning out to be another tough time for retailers.  Internet sales have continued to rise month on month though.

Back in April of this year HMV said that it had not ruled out the possibility of a CVA to help it restructure.

Healthcare Locums rescue funding deal collapses?

Seems that sacked former executive Kate Bleasdale has voted against rescue funding of Healthcare Locums plc. Toscafund has offered to inject £33m to dilute the shareholders and take 40% of the equity.

Other investors have put proposals forward. Meanwhile the accounting irregularities have yet to be resolved. Allegations are that invoices were issued that pre dated the contract start point.

One can't help wondering what this public airing of dirty washing, the very public sacking of Bleasdale and the long term suspension from AIM is doing to the sales line?

Would you do business with this company if you were a buyer for the NHS?

Thursday, 8 September 2011

Small Legal Firms likely to struggle in wake of "Tesco Law"

The Legal Services Act will come into effect by October.  This will mean that legal services will not have to be provided solely by law firms.  It has been known as the "Tesco Law" as observers have predicted that Tesco will move into the market having made inroads into insurance, estate agency, and banking already.  There are already companies waiting in the wings which is putting pressure on solicitors.  The proliferation of comparison based sites has put further pressure on margins as customers look for the cheapest services and lawyers fear losing out on work.


In addition, by October each of the 10,000 or so law firms in England and Wales will have to renew their mandatory professional indemnity insurance.  It appears that the premiums for cover have increased as there is not much competition in the legal insurance market.

The economic slow down has meant that some of the bread and butter work such as conveyancing has been drying up.  In addition, the further cuts to legal aid that are being proposed means even less work out there.
Some lenders are even culling the firms they already approve to carry out mortgage work, making it almost impossible to act for a house buyer if the law firm is not on the lenders panel.

Be prepared is the watch word in all this but if your law firm is already feeling under pressure then you need to
know your options.

These may be the following,  A CVA if you are a LLP,  A Partnership Voluntary Arrangement or PVA if you are a partnership.  Or the firm can have multiple simultaneous IVA's for partners

Our firm did the first CVA for an LLP Law firm in 2008.  Read the case study on this.

Blogged by Robert Moore

Wednesday, 7 September 2011

Menzies launches new business recovery arm

We note from the company website that Menzies LLP, the accountancy firm, has launched a new business recovery arm with the acquisition of the insolvency specialist Benedict McQueen, the London office of Benedict Mackenzie. The acquisition brings to Menzies two partners and their team. Benedict Mackenzie’s other offices remain unaffected by the move. The team will be based in Menzies’ London office and will focus on insolvency and recovery work for SMEs as well as forensic investigation and litigation support.

This is an interesting development. The Menzies firm originally “spawned” Menzies Corporate Recovery now known as MCR Corporate Restructuring. Wonder what the guys in Portman Square think of this announcement by their erstwhile partners.

Consolidation in the insolvency sector is likely to continue as there has been a lower than expected level of insolvencies following the recession.

Tuesday, 6 September 2011

Givemefootball.com in administration

Givemefootball.com, the football news website, which is a joint venture between the Professional Footballers' Association and marketing business Sports New Media called in the administrators on 24th August 2011.  The site was based in Manchester and provided news on the English leagues, the Champions League and the FA Cup.

Joint administrator Chris Stevens at FRP Advisory said: “Givemefootball.com was unable to fulfil its obligations to a supplier, resulting in the company becoming insolvent and entering administration."

It would appear that this particular administration came about following a court case where the firm lost a court dispute with an online betting firm in Australia over a £1m sponsorship agreement.   The sponsorship related to the Professional Football Association's Fans' Awards.  The judge in the case ordered Givemefootball.com to repay £340k of sponsorship + damages of £53k.

Monday, 5 September 2011

Rangers subject to arrestment order by HMRC

As per our earlier blog it seems that HMRC have paid Rangers a visit over unpaid tax.  The BBC has reported that an arrestment order has been made over a seven figure sum in their bank account which effectively means that they cannot touch that money until the dispute is settled.

HMRC turned up at their offices last week to deliver documents relating to the case, some of which leaked to the media.  In the documents they said that failure to settle could lead to an asset freeze or winding up.

Rangers, say they have already paid a six figure sum as part of the case in hand, and they are disputing the tax owed, which is £2.8m plus a £1.4m penalty, dating back to 1999.





Construction and Manufacturing Businesses Struggling

According to the Office of National Statistics, the volumes of new orders in the construction sector in the second quarter of this year has been the lowest since 1980.  In addition, the purchasing managers index (PMI) for August has shown a drop in activity to its lowest levels since the end of last year.  Construction activity fell in line with  expectations to 52.6 in August from 53.5 in July,  but lets not forget that this is still above the 50-mark that separates growth from contraction. The volume of infrastructure orders in the second quarter fell by 25.9pc compared with the previous quarter and fell by 44.2pc against last year, and is at its lowest value since the first quarter of 2006.  Some have suggested that the UK embarks on a large housebuilding programme to stimulate growth and help the imabalance between demand and supply. 


The survey followed evidence that Britain’s manufacturing industry is struggling after contracting for two straight months amid mounting fears about the stalling global recovery.  UK manufacturers have been doing well  by exporting and the global recovery is key to maintaining this momentum.  Today, has seen more big falls on the world markets as worries persist on the global economy. 

Construction businesses and manufacturing businesses are vulnerable to economic cycles as they cannot adjust their position quickly to ease cashflow problems in the way that some service businesses can do.  Capital can be tied up in plant or work in progress. 

If a debt is causing the company cashflow problems it is possible to use a company voluntary arrangement or CVA to allow the business to pay off the debt over time.

For expert insolvency advice call KSA Group on 0800 9700539






Thursday, 1 September 2011

Is Rangers Football Club plc being wound up by HMRC

Rangers fan forum "Follow Follow" reports today that HMRC has "briefed media sources" that HMRC has "frozen the clubs bank account".

In fact that could not be true but a winding petition in Scotland being advertised on the walls of the Court of Session could lead to the BANK freezing the bank account.

So far no comment from the press or the club.

Want to know more about winding up petitions in Scotland? Click this link http://www.companyrescue.co.uk/company-rescue/guides/winding-up-petition-in-scotland

Business bankruptcy - What does it mean?

The insolvency industry is full of misnomers like "company voluntary liquidation", "creditors voluntary arrangement", "going into receivership" (when they really should use phrases like administration, administrative receivership, company voluntary arrangement or creditors voluntary liquidation)



What about the word bankrupt and bankruptcy? This only applies to individuals, a company cannot go bankrupt. So when anyone talks about business bankruptcy what they really mean is that the business is insolvent. As such, it may go into liquidation. Where a personal guarantee is given for a lease or business loan then there is a possibility of the guarantor becoming bankrupt but this is unconnected to the company as an entity.

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