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Tuesday, 31 July 2012

Latest winding up petition case study

At KSA Group we have been able to help companies that have had winding up petitions served on them.  This is usually the last resort option of a creditor looking to recover a debt.  It is best to ACT BEFORE it gets to this stage but in the event of your business receiving one we can help - IF you contact us immediately.

Please look at our case studies page which shows that we can stop or challenge petitions to wind up your company.  However, mainly we persuade creditors to accept our rescue plan using a CVA or by obtaining Validation Orders.

Winding up petition case studies

The latest case study about a media firm with £2.2m turnover and £600k of debt highlights the fact that if you act quickly the costs for saving the company can be lower.

Mouchel looking at pre pack administration

Update.  1st August 2012.  Mouchel go for a debt for equity swap

Mouchel Group,  one of the country’s largest support services groups employing 8,500 people and
which manages traffic on the UK's motorways through roadside screens  has been  in last minute talks with its bankers, according to reports.  This in a bid to stave off administration as it groans under a debt pile of £180m.  Talks with the major lenders to the group – Royal Bank of Scotland, Lloyds and Barclays – have been underway for months.

Mouchel, has seen its value fall in the past 12 months. The company is now worth under £3m. This is a dramatic fall having been valued at more than £500m in 2008 and rejecting a £330m takeover bid from VT Group in 2010.

A ‘ pre-pack administration ’ is being looked at, but a debt-for-equity swap with the banks, where the lenders take a stake in the group is the most likely option.  At an operating level the group is seen as being profitable, and it is a sizeable business, so it will have a future in some form or another.  Mouchel has an order book of £1.1bn.  However it is the onerous terms on the company debt that is causing the problems.

Monday, 30 July 2012

Retail insolvencies buck the improving insolvency trend

According to a report by PricewaterhouseCoopers, the retail sector is suffering a big rise in insolvencies in the last 3 months when compared to last year.  This is not surprising considering the weather and the dampened consumer confidence.  426 retailers collapsed in the second quarter compared to the 386 a year ago.  Of course, Clinton Cards was the biggest company to fail but a number of these have been bought.  
Across all the other sectors there has been an improvement in the insolvency rate with, 15.5% fewer construction firms had gone bust than in the previous quarter, and 8.4% fewer manufacturers.  This has led to an improvement across all sectors of 3% to a total of 4000.  It should be noted that this is an insolvency rate of less than 1%.  In the early nineties the insolvency rate was some 2.5%.  
Again though, this construction data is not looking at the year on year figure.  Construction is having a hard time this year with the cutting back of infrastructure building and new house starts.  As such it does appear to be dragging down the GDP figures.
If you are struggling then you should seek to act early.  Take a look at our cost cutting guide pages and how to get  time to pay your VAT or PAYE bill 

Friday, 27 July 2012

The Olympics have started today

So let's get into the spirit of it all and get behind Team GB!  The flame has passed through Berwick-upon-Tweed and our office manager, Marie Moody, has held the torch!  See this blog for pictures

I would have liked to have put on a picture of the Olympic Rings but we don't want to upset anyone...

Trip into London so far was easy and roads quiet as people heeded warnings to not drive.

Wednesday, 25 July 2012

What is happening in retail?

For anyone in the retail sector these last couple of years has bee a difficult time to trade through.  Consumer confidence has been low, input costs quite high ( although there has been some relief as inflation falls back ) and sluggish pay settlements for the average shopper. 

The BBC have a good page that is being updated on all the latest retail collapses.  You can read it here

If you are a struggling retailer then perhaps a CVA can save your business. Take a look at our retailer rescue pages or give us a call on 0800 9700539

GDP figures show 0.7% decline

It wasn't a huge surprise, but GDP fell by 0.7% in the second quarter of the year. However, analysts expected a fall of just 0.2%  Extra bank holidays are said to have played their part and it is only an estimate at this time. This will put pressure on the Bank of England to increase the measures to stimulate the economy known as quantitative easing. The coalition will also be facing pressure to find ways to stimulate growth which seem to be very elusive at the moment

The GDP figures have been widely criticised as being misleading and not accurate.  Unemployment has fallen and business confidence has held up reasonably well. What is more the insolvency statistics are showing an improving picture. However, the general consensus is that the economy is flat.

Tuesday, 24 July 2012

KSA Group Insolvency Notices

Innovate Care Services Limited Liquidation Notice

Meeting of the Creditors of the above named Company will be held at the offices of KSA Group Ltd, Tower 42, Level 7, 25 Old Broad Street, London, EC2N 1HN on 7 August 2012 at 12.15 pm

See full notice below

Unite Security Limited s98 Liquidation Notice

Meeting of the Creditors of the above named Company will be held at the offices of KSA Group Ltd, Tower 42, Level 7, 25 Old Broad Street, London, EC2N 1HN on 1 August 2012 at 2.15 pm

7 day warning letters being issued by HMRC

We are hearing about more companies that are not able to keep up with their time to pay payments and HMRC are beginning to issue 7 day warning letters of a winding up petition.  However, all is not lost if you have been refused time to pay VAT or PAYE.

Just because enforcement say you have to pay all the tax this does not mean to say that HMRC will not negotiate.  See our page on HMRC Enforcement and the Voluntary Arrangement Service or VAS

A CVA can be used as a rescue tool to allow a proportion of the unsecured debt to be paid off over time, the remainder is written off. If you start to make more money than envisaged then in the CVA proposal a higher dividend can be paid the creditors. So basically you are not "pulling a fast one" over your creditors and your reputation should not be damaged. Besides, in order for a CVA to be approved you will need the backing of 75% of the creditors (by value) anyway. Another plus is that there is no statutory requirement for you to tell your customers that you are in a CVA, which is not the case with administration

What about tendering?

We can arrange for a hive down that allows the company to tender for contracts. See this page on hive downs

Monday, 23 July 2012

Company Rescue Cookie Policy

So we have to do as we are told and have put a cookie policy on our website.  We simply use cookies to track visitors and returning visitors. We have a simple cookie policy that can be read here. 

The EU I think has other more important things to worry about now but there you have it.

The Green Drinks Company looking to exit administration via a CVA

The Green Drinks Company is looking at a company voluntary arrangement (CVA) as a way of exiting from administration it has been reported.  The company supplies a vending machine system using pouched beverages.  The system needed much investment in order to establish themselves in the market and key investors were not in a position to invest in the business. Administrators at Milsted Langdon in Bristol were appointed on 24 May 2012. The crunch came when there was a "health and safety issue" with the vending machines that were in place and they would have needed addition parts fitted.  Given the financial restrictions it was deemed that this was not feasible and the business had to cease trading.  A total of £3m has been invested in the company.

An estimated outcome statement reveals that, on 16 July 2012, the syndicate which provided bridging investment is owed £100,000 as the company's secured creditor.

Preferential creditors are owed £12,205. A total of £2,724,568 is owed to unsecured creditors, including £606,889 to trade creditors, £93,000 to employees and £24,679 to HM Revenue & Customs. A £2m loan is also owed to Finasucre.

Despite this report we are unsure how this could work as if the company has stopped trading then  it will need to start up again and generate revenues to pay the creditors. Of course, we do not know the exact position of the company but it may be that the "health and safety issue" has been resolved at minimal cost. 

Read about how a company can exit and administration via a CVA

Thursday, 19 July 2012

2000 law firms at risk of insolvency

According to R3, the insolvency trade body, over 2000 law firms are at risk of insolvency in the next 12 months.  They have come to this conclusion by analysing the "fame" database which holds financial and credit rating information on UK businesses.  At the end of July, Limited Liability Partnership (LLPs), Partnerships and Sole Practitioners who are not directly assessed for tax on the business’ profits have their second on account payment due.

Legal firms have various challenges ahead most importantly from the new Legal Services Act that allows non solicitors to own legal practices.  This was dubbed the "Tesco Law" as predictions  of lawyers offices in supermarkets emerged.  The LSA will no doubt lead to increased competition especially for small high street firms.

Traditionally law firms have not been particularly good at collecting cash in as much of the work is in progress and a focus on billable hours sometimes means that debtors do build up.

So if your practice is, or you are

  • experiencing cashflow problems?
  • You are concerned about paying your professional indemnity premiums?
  • worried that insolvency may affect your ability to practice in the future?
  • You don’t want to risk the SRA Intervention
If so then you should read our new pages on help for lawyers with cashflow problems

Wednesday, 18 July 2012

Ethel Austin in administration for the fourth time

500 jobs are at risk after Ethel Austin went into administration today following an unsuccessful attempt to sell the business. The administrators at Duff & Phelps are trading the 48 store chain while they seek a buyer. Altrincham-based Ethel Austin was bought for £1.6m by london businesswomen Sue Townsend from the administrators of Life & Style in 2011.

Ethel Austin, has suffered a "marked downturn" in the recession, according to the administrators at Duff & Phelps.

The homewares and fashion retailer has previously become insolvent three times – in 2008, 2010 and last year.

Ethel Austin has suffered from tough competition from the likes of Primark and Zara.

If you have been affected by the administration then look at our help for employees pages and help for suppliers

What are the advantages and disadvantages of a CVA

The company voluntary arrangement is the best rescue mechanism out there but it does have some disadvantages when compared to administration.  However, these can be managed/mitigated IF the right advisers are chosen and the CVA is well drafted and is appropriate for the circumstances of the company.

Read our new page on the advantages and disadvantages of the CVA mechanism

Tuesday, 17 July 2012

Insolvency rate falls by 6.1% across UK in June

Despite the continuing recession, small business insolvencies have reduced significantly in the month of June compared to June 2011 according to Experian. There was an overall fall of 6.1% in the insolvency rate for all businesses in the UK.  Although we are only looking at one month, the year on year statistics tend to be the most telling.  These figures are good news for UK plc.

Insolvency Rate Breakdown by Region

North West -       down 11%
South East -        down 20.7%
Wales -               down 12.1%
London -             down 11.6%
West Midlands    up 18%

West Midlands is obviously the odd one out but it may be because the insolvency rate for larger companies employing in excess of 100 people has gone up from 0.08% to 0.16% so 50%.  If these companies were based in the West Midlands then it will skew the statistics.

Max Firth, managing director for Experian Business Information Services UK and Ireland, said: “Although the overall figures for June show a fairly stable environment at the moment led by smaller firms, the higher insolvency rate at the top end of the business world will have an impact on the supply chain."

So if we stripped out the larger companies from the statistics it shows a considerable fall in the insolvency rate amongst smaller firms.

The reasons for this fall in insolvency appear to be that HMRC are not putting much pressure on smaller businesses at the moment as they concentrate on tax evasion and are somewhat under resourced.  However, this will no doubt change as the pressure to collect in tax increases again in the autumn.   Larger businesses are being put under pressure by their banks that have the power to call in the administrators to protect their position.

So what should you do if you supply a business that goes into administration.  Click on the link to find out.

Monday, 16 July 2012

The partnership voluntary arrangement as a flowchart

If the partners believe in the fundamental viability of the business and are determined to fight for the business to help survival then a rescue mechanism exists that can be a powerful tool or framework for the restructuring of the business.

The best way to think of an partnership voluntary arrangement (or the very similar CVA) is as a deal between the debtor (the partnership that owes the money) and the creditors; the people or businesses to whom the money is owed.

Who should use a PVA?

It is imperative that the PVA is only used where a partnership’s business is viable or where it has disposable assets that can be turned readily into money in the short to medium term. Using the PVA can allowed time to sell such assets for better value than a liquidator can obtain.

See below for a flowchart of the process

Friday, 13 July 2012

Small businesses suffering from late payments

Britain's small and medium enterprises (SMEs) are owed a total of £35bn in late payments.  Yet only 1 in 4 of the UK's biggest companies have signed up to the prompt payments code which has been set up by the Institute of Credit Management  (ICM).  It is not as if the code is binding or anything. 

Companies can comply with the code simply by paying bills when they said they would, not seeking to change payment terms retrospectively, and by ensuring a clear system is in place to deal with any problems or complaints that do arise.

The fact that many small companies are reluctant to get heavy with their biggest customers for fear of losing them goes someway in explaining the increase in factoring whereby businesses sell on their invoices for a discount.  This can help ease cashflow problems

Companies should be vary wary of allowing even larger companies build up large lines of credit as it maybe that they themselves are in trouble and are just delaying payment.  Credit ratings of businesses are not always very up to date and don't always give piece of mind.

At KSA Group we know several good companies that collect in debts.  Please see our debt collecting page for advice on how to collect in money to ensure you survive.

Thursday, 12 July 2012

South London Healthcare Trust in administration

South London Healthcare NHS Trust, which was created by the merging of three hospitals - The Princess Royal in Orpington, Queen Mary's in Sidcup and the Queen Elizabeth in Woolwich has been put into administration.  The Secretary of State has the power to appoint administrators to trusts.  The appointment process is known as a "special administration"  The FSA also has power to appoint special administrators to financial institutions.

Mr Lansley who made the appointment said: "I have decided it is in the interests of the health service and, in particular, of the patients the trust serves."  The trust was only created in 2009 and is millions of pounds in debt.  When  the hospitals were merged the annual deficit was c.£21m.
The trust cut costs, to reduce debt, by £47m in 2010-11, but still posted a £40m deficit.

The special administrator's role will take effect from 16 July and he will "assume full control of South London Healthcare NHS Trust, replacing the functions of the trust board and assuming the role of the accountable officer", the health secretary said.

KSA Group rescues haulage and logistics business

The Heathrow-based logistics firm appointed turnaround firm KSA Group to devise a CVA to enable the business to carry on trading while it repays its debts over five years at a rate of 38.3p/per pound owed for unsecured creditors.

The creditors unanimously voted to approve a company voluntary arrangement (CVA).  The company had suffered as a result of the harsh winter of 2009/10, the rise in diesel prices that increased more than the company's fuel surcharge, and the Icelandic ash cloud.

The turnaround plan will see the firm’s Bristol and East Midlands airport depots closed, wages and recruitment frozen and the chief executive inject £300,000 into the company.

Click the link to read the full case study - CVA rescues haulage and logistics company

The Chairman is happy to provide references for KSA Group to any director looking for advice.

For more case studies on how we have rescued companies using the CVA route see our case studies page

Wednesday, 11 July 2012

KSA Group Insolvency Notices

The Affordable Bathroom Company Limited Liquidation Notice

Meeting of the Creditors of the above named Company will be held at The Hubworking Centre, 5 Wormwood Street, London, EC2M 1RQ on 3 August 2012 at 11.00 am

Please see the full notice below

Cartridge Solutions Limited Liquidation Notice

Meeting of the Creditors of the above named Company will be held at The Stratford Manor Hotel, Warwick Road, Stratford-upon-Avon, Warwickshire, CV37 0PY on 7 August 2012 at 1.00 pm

Tuesday, 10 July 2012

Bradford Bulls face liquidation

Bradford Bulls that went into administration recently faces liquidation unless an offer for the club is forthcoming.  The administrator, Brendan Guilfoyle set a deadline for today to avoid liquidation. However he is confident that an offer will be made by a consortium of Bradford businessmen.
Guilfoyle said "They're giving it serious consideration - they're bringing in more and more people into their consortium, so hopefully by spreading the losses amongst a few people they'll come up with a model that might work for them. And if it works for them it'll work for me, that's for sure."
The Bradford team did their bit to appeal to potential investors with a committed 44-12 victory over the visitors. The win also keeps alive hopes of a play-off position for the first time in four years.

A week ago Guilfoyle made 16 full-time staff redundant in a desperate attempt to slash costs and Sunday’s game only went ahead after most of them volunteered their services.

Monday, 9 July 2012

Wet weather bad for some businesses

The soggy summer is unfortunately going to have a knock on effect on businesses with some sectors going to be hit harder than others.

The revival for the high street maybe short lived as poor weather has led to a fall in footfall for the last 3 months when compared to last year.  Clothing shops have ordered summer wear earlier in the year but there seems to have been a surge in demand for wellies and brollies rather than light summer dresses!  BBQ's and outdoor goods have suffered falling sales. Most of these outdoor goods are stocked by large out of town outlets so they can absorb this fall quite easily.

Festivals have been in the news but organisers sold most of the tickets when it was warm and sunny in the Winter...!  Next year might be different especially as some observers have said the outdoor festival market is peaking and some tickets have not been sold. 

Camping and day tripping
This industry is certainly suffering and sales in Wales have been very poor.  This is most likely to be the hardest hit industry.

Sports events
Again this part of the economy is likely to suffer but many tickets are sold long in advance.  It is the small businesses that rely on visitors spending in the venues that may suffer.

Punch Taverns reported at the end of June like for like sales falling by 6% with the weather partly to blame.

Debts that might have built up as a result of unexpected circumstances, and a month's worth of rain in 24 hours could be classed as such, could be dealt with in a CVA.  As long as the business is viable then creditors should be supportive of a proposal that allows the business to spread out some of the debts over a year or more could be the best option

Contact us for details of how a CVA could help you.

Friday, 6 July 2012

Begbies Traynor sees declining insolvency sales

The recent results from Begbies Traynor plc, the listed insolvency specialist firm, shows that the market for helping companies that find themselves in difficulty is not growing as fast as expected.  This is mainly due to the fact that many businesses are currently still being supported by their banks and HMRC despite carrying huge debts, plus interest rates are very low said executive chairman Ric Traynor. 

After exceptional write downs, the company reported a loss of £5.7m.  The insolvency department has seen 40 insolvency staff made redundant as costs are cut.  The firm has sold off the Red Flag Alert service, its offshore companies and is seeking to concentrate on its core insolvency activities. 

Some argue that the shares at 8% yield are cheap and historically the  market for insolvency work expands as the recovery gets underway.  This seems illogical but banks are more willing to call in loans when the economy is growing as there is a market to sell distressed assets into.  In addition companies are more likely to start overtrading causing cashflow difficulties.

Pre exceptionals the company made an operating profit of over £5m on declining sales of £58m.

Thursday, 5 July 2012

Sumo Salad file intention to appoint administrators

The Japanese salad bar, Sumo Salad, has filed an intention to appoint administrators yesterday.  The full notice can be seen below;category=corp-insolvency-administration;subcategory=appointments

No information has been released as yet.  The firm started in Australia and has opened 3 salad bars in the UK, with two in London and one in Norwich. 

Sandwich bars are a competitive business and there has been an explosion in Eastern orientated outlets recently - Pod, Itsu, Wasabi, to name a few. 

Are they in administration yet then? 

Well not quite,  Resolve partners have filed an intention to appoint administrators.  This is where the company files, at court, a document that outlines that they intend to go into administration if a solution cannot be found to their immediate financial problems.  Once this is notice has been sent to the court a moratorium is created over the company preventing any creditor from starting any legal action or continuing any existing legal action against the company without express permission from the court.

Tuesday, 3 July 2012

London phones now working

Following the disruption to the power in Tower 42 our London phones have now been restored.  Apologies for any inconvenience.

So you can now call us on  020 7877 0050 if you need help for your London-based business.

Julian Graves in administration

The June Quarter day has claimed its first victim in the retail market with the health food store chain, Julian Graves, going into administration.  The retailer employs 755 people and operates 189 shops.  NBTY Europe owns Julian Graves and reported that the store had lost £2m every year since they bought it in 2008.  NBTY Europe also owns Holland and Barratt (H&B) which ironically is making good profits. Last year its profits jumped from £47.5m to £57m. 

So what went wrong at Julian Graves?

The administrators at Deloitte said that low consumer spending and high nut prices were mainly to blame for the firms difficulties which would have affected H&B as well.   Julian Graves was bought out of administration back in 2008 so perhaps there were issues with the business that were not fully addressed.  In the end a business needs to change significantly to survive.

The administrators are looking for a buyer for the business.

If you are a retailer that is worried about the future and needs to vacate unprofitable premises then please refer to our retailer rescue page.

Employees can get information on our help for employees pages

Monday, 2 July 2012

HMRC to fine companies if they do not do online PAYE returns

In a new initiative all PAYE returns will have to be done online by October 2013.  HMRC are currently working on the project that will see significant changes.

The biggest change is that all employers will have to file pay and tax details for their employees online when wages are paid – rather than at the end of the tax year.

Failure to file these returns online in "real time" will result in fines from £2000 for smaller businesses and much more for large businesses.

If your business is having problems paying PAYE then it may be that a "Time to Pay" arrangement can be agreed with HMRC to allow the paying off of tax over a short time scale of say 6-12 months.

It remains to be seen whether this will be easier to do than the usual PAYE filing but if the system is well designed and simple to use it should not be a larger burden on small businesses.  Here's hoping!

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