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

Friday, 30 March 2012

Flash Incentives Limited s98 Creditors Voluntary Liquidation Notice

Flash Incentives Limited

A 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 12 April 2012 at 10.15 am

See full notice below

http://www.companyrescue.co.uk/insolvency-notices/flash-incentive-liquidation-notice

Kerry Foods is latest food company in difficulties

Following the sudden fall into administration of DBC Foodservice it appears that another food company has found itself in difficulties.

This time it is Kerry Foods, in Gilesgate Moor, Durham City, which has launched a consultation period with workers after a drop in profits.  They are looking to urgently cut costs and possibly close a factory.  346 jobs are at risk.  Any production will be transferred to other factories.  Kerry foods is the 3rd largest private sector employer in Durham.  

If a rescue plan fails, the business proposes to transfer production from Durham to other sites in the UK and Republic of Ireland.

A spokesman for the company said market conditions had become “highly competitive and intensely challenging”. In a pessimistic note he went on to say “While we have made significant adjustments to our cost base and have sought to win new business, to date we have not identified a plan or a strategy to restore profitability to a sustainable level,”   That is obviously worrying.

It is not clear what is happening as the company last reported profits of £24m on turnover of £576m.  However, These figures relate to the end of 2010 so not very uptodate.  Also lots of new board members were taken on at the end of last year and it has recently had a few county court judgements against it.  Looks like margins have suddenly been squeezed.  Could it have been the sudden loss of a contract with a major customer?  Seems a bit of coincidence that 2 large food suppliers have got into trouble so soon after Tesco announced its first profit warning for 20 years.

If you are an employee of Kerry Foods please see our help for employees pages

Thursday, 29 March 2012

Colliers International in pre pack administration

Colliers International, the property agency founded by Sir John Ritblat, has been sold in a pre pack administration deal to its major shareholder the Canadian Firm FirstService.  Colliers joins the list of humbled property consultancies such as DTZ that have seen their share prices plunge and eventually  be sold in pre pack administrations. 

The credit crunch hit the commercial property industry particularly hard when deal volumes collapsed.  Volumes have since recovered but as many firms grew rapidly on debt backed deals when the commercial sector was riding high they have been left with large debt overhangs.

So who loses out?

Many of the shareholders will be left with nothing and it is understood that Barclays have lost £18m.  The employees who had share schemes may also be hit although it very much depends on how they were structured. 

Bradford Bulls need £500,000 to avoid administration

It's not just football clubs that get into trouble with HMRC

The Bradford Bulls, the rugby league team, have to raise £500,000 by the 6th April in order to pay HMRC and avoid administration.  The super league team have struggled financially for many years as they do not have a wealthy benefactor.  However in a desperate plea to their season ticket holders they have already raised £100,000.   The club has blamed the Royal Bank of Scotland for pulling their overdraft facility without warning meaning they couldn't pay their tax bill.  Err but really the fact that they have racked up a massive bill for PAYE might be the real reason for their demise.  HMRC are expected to issue a winding up petition if it is not paid. 

We have recently put some pages up about why football clubs tend to get into trouble and the reasons that a rugby club is facing similar problems is not that surprising.  However, the Super league does not have the same power as the "football creditors rule" that ensures that all the players will be paid ahead of other creditors but it will have a big say in  any restructuring as it has the power to grant franchises to clubs that allows them to play in the league.

So what is the likely outcome?

The club is likely to go into administration if it can't pay the first tranche of money but if it can then it may propose a company voluntary arrangement to allow it to buy more time.  Even if the club does go into administration then it may exit the process by a CVA as a way to keep going.

Millionaire businessman and Guiseley AFC benefactor Steve Parkin has previously spoken to the Bulls and is understood to be on the club’s radar again as a potential investor.

Tuesday, 27 March 2012

DBC Foodservice in administration

I have been informed that DBC Foodservice, which recently put itself up for sale following a challenging trading period, has gone into administration with Baker Tilly as the administrator.

The firm had a last reported turnover of £300m but made losses of more nearly £5m upto March 2011. The company employs 1000 people in 12 different locations. DBC Foodservice was previously called The Danish Bacon Company but now supplies a wider range of products, such as egg and cheese. The firm has a major contract with the Ministry of Defence to supply the armed forces.

No announcement has yet been made by the administrators but I have confirmed with Baker Tilly that they are appointed as the administrator. As such any enquiries should be directed to their Manchester office 0161 830 4000. When I know more I will update this blog.

update 28/3: Russell Cash from Baker Tilly has said ""We are in discussions with a number of interested parties, some of which are at an advanced stage. We are hopeful that we will be able to secure a future for certain areas of the business."

If you are an employee of the business then you can read our help for employees page

If you are a supplier to the company read help for suppliers

KSA Group Insolvency Notices

Oscilla Limited Liquidation Notice

 Meeting of the Creditors of the above named Company will be held at the Holiday Inn Express, Metro Centre, Claspers Way, NE16 3BE on 2 April 2012 at 10.30 am

See full notice below
http://www.companyrescue.co.uk/insolvency-notices/oscilla-limited-s98-creditors-voluntary-liquidation-notice


Vintage Trading Company 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 3 April 2012 at 11.15 am

See full notice below

http://www.companyrescue.co.uk/insolvency-notices/vintage-trading-company-limited-s98-creditors-voluntary-liquidation-notice

Monday, 26 March 2012

Game Group Closes 277 Stores as rescue bid fails

Game Group, which went into administration this morning, has announced that it is to close 277 stores with the loss of 2100 jobs.  The company had been trying to thrash out a deal to save the whole business over the weekend after the company filed a notice to appoint administrators last week.  When the sale fell through the business had little choice but to go ahead with the administration.  The administrators have said that they will concentrate on trying to sell the remaining 333 stores.

The Royal Bank of Scotland is trying to put a rescue package together with the other lenders but as always it seems strange that a public owned bank might be the majority owner of a video games business.


The writing has been on the wall with regard to Game Group and many people appear to have been waiting for the inevitable.  First of all, the firm had a terrible Christmas trading period, then suppliers refused to supply, the company announced an intention to appoint, a rescue or sale was mooted and then the deal failed.  This failure also has striking similarities to the collapse of Woolworths in 2008.  The staff appeared to have been left a little in the dark which may lead to some morale problems making the sale of the remaining stores more problematic. 


If you are an employee of Game Group please refer to our help for employees pages

Winding up petitions being issued by banks over interest rate swaps

It has come to light that there is a potential mis selling scandal about to break again.  This time regarding the selling of interest rate swaps as part of loan agreements offered to small businesses. The fact that these were sold to businesses as opposed to individuals means the scandal will perhaps not be on the same scale as the PPI scandal

However, that does not mean it has been any less distressing for small businesses that have taken on interest rate swaps without fully understanding what they are buying.  In essence the argument has been that these swaps were complex financial instruments and should not have been sold to small businesses.  For instance did the small businesses realise that if the interest rate went down then the payments for their loan went up.  Of course in 2007 when these were being sold many people never thought that interest rates would go down, but did they understand the risks?  In some cases, post credit crunch, the loan repayments have doubled...! 

In one instance we know of, the company has been issued a winding petition by their bank as well as the bank trying to enforce their security as a way to quickly kill this issue off. 

If you feel you have been sold an interest rate swap product that was not properly explained to you and the bank is aggressively seeking repayment then we know a solicitor who specialises in interest rate swaps misselling   They will give you a free initial consultation. 

The doubling of loan repayments because interest rates have gone down is definitely going to hammer cashflow!

USB toolkit for directors who are worried about insolvency

Worried about your business? Concerned it may be failing? Need help fast but dont want to meet anybody face to face yet? Get all of our best guides and expert advice on one USB Drive – FREE! 


This toolkit is available as a discreet USB device ( we do not mention insolvency on the drive itself ).  You do not need to be connected to the internet to read all the guides to your options.


What does it cover?


  • The tests for insolvency
  • Establishing if your business is viable.
  • How to ask for time to pay your debts to HMRC
  • Extensive guides on pre pack administrations, liquidation, company voluntary arrangements. 
  • A guide to all the legal actions that creditors might take and the issue of personal liability.
  • What is an overdrawn directors account and why does it matter.
  • How to raise finance to ease cashflow pressure.
  • Your duties as a director of an insolvent company.



  Just plug in the drive and you can easily navigate to all the menus.


directorstoolkit

toolkitimage



The USB drive also includes all the products that are on our shop - so free of charge.

  • Dissolution programme with all the letter templates and resolutions. 
  • A time to pay programme with all the letters and information needed to ask HMRC for more time to pay VAT/PAYE
  • Daily cashflow spreadsheet to help you budget.


Order your free toolkit and start taking action to save your business now.  Please email robertm@ksagroup.co.uk to receive your complementary copy in the post.

Donns LLP in administration

Donns LLP, a personal injury compensation law firm, based in Manchester  has gone into administration.  PricewaterhouseCoopers are the administrators.  The firm had  offices at City Wharf, in Manchester.   The most recent accounts for Donns LLP said that the firm's liabilities exceeded its total assets by £5.5m. The firm was attempting to renegotiate its banking facilities at the time.         

Another Manchester based law firm, Irwin Mitchell,  has bought “several hundred” personal injury cases from the stricken firm in a deal with the administrators.  The firm can now write to all the clients and advise them that their cases can be continued.


So how come law firms such as Donns LLP can get into trouble?  The simple fact is cashflow.  Much work done by lawyers is only paid once the case goes to court and the outcome determined.  In no win no fee cases the firm has to take out an insurance policy to get paid if they don't win.

Also lawyers are notoriously bad at chasing debts for the simple reason that the time spent is not "billable time"  Consequently they can end up with huge amounts of work in progress but not actual money in.

So how can lawyers get help if they face cashflow issues.  Well, the first step would be to look at our help for struggling lawyers webpages.

Thursday, 22 March 2012

Retail volumes in surprise fall

Looks like George Osborne has his work cut out if he is going to stimulate some growth and consumer spending.  The latest figures from the Office of National National Statistics show that retail volumes fell by 0.8% compared to the previous month.  Now, we don't like to make too many month on month comparisons as last month the ONS reported a increase of 0.9%.  But wait, this month they have said they made a mistake and that the growth was only 0.3%.  The year on year picture is not too bad as sales volumes have risen overall by 1.7%  but the fall by 0.8% has taken the markets by surprise.  Some of the biggest sales falls were seen in clothing and footwear, where sales volumes were down 0.4% in February, the ONS said. Heavy discounted in earlier months were previously supporting volumes but this was unsustainable.  Note that these figures relate to volumes not actual spending which are published by the British Retail Consortium.  As such, they measure the size of the shopping bags as opposed to the amount actually spent as it were..  That said it is still a useful indicator.

Game Group plc is the latest large retailer to go into administration which has 1,300 stores in the UK. 

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

Wednesday, 21 March 2012

Game Group in administration today

Update: 26/03

Game Group has confirmed that it is going into administration today as the administrators have failed to find a buyer...  However there are rumours that its lenders, led by Royal Bank of Scotland, may buy the business out of administration.   See previous post below

Shares in Game Group plc were suspended this morning "pending clarification of the company's financial position"  This is the usual code for fact that the business is likely to call in the administrators. Earlier the company announced that there was little value in the shares and they fell 75%.    It should be remembered that the shareholders come last in any distribution of remaining funds should the business become insolvent.  As such, there is not much point being listed on the stock market.


The March rent quarter day, that is fast approaching, is often the catalyst for retailers collapse as the administrators do not want to find themselves with a liability of 3 months rent in advance being due.


Game Group has over 1300 stores and employs 6000 people in the UK and 10,000 worldwide.  It should come as no surprise that video game stores are suffering in the face of competition from the Internet.


The company has been in talks with its lenders and has also put the business up for sale.


If you are an employee of Game Group at this stage we do not know who the administrators are likely to be so please do not phone us up.  For help for employees please refer to our help for employees page.

Tuesday, 20 March 2012

Business Recovery Services From KSA Group

KSA Group can offer business recovery advice to struggling companies.  A formal insolvency procedure is not necessarily the only solution as an informal deal may be agreed with the creditors. 

Please see our new page on business recovery services from KSA Group.

Blogged by Robert Moore

Business Confidence Up, Inflation Down

Before the budget tomorrow it appears that there are some signs that the economy is recovering. 

The YouGov's "Heat Index" poll which is based on thousands of interviews each month has found that confidence amongst consumers has risen to levels not seen in the last 18 months.  The survey found that respondents felt more secure in their jobs and that confidence in the housing market was high and they even said that the confidence in the government's handling of the economy was growing.  This last one seems a bit too convenient just before the budget but then again Labour do not appear to have made major gains.   In other good news it appears that inflation has fallen to 3.4% due in the main to falling energy prices although analysts had hoped that it would fall to 3.3%. 

All this is not really surprising considering how dire things appeared late last year.  Public sector job cuts underway, inflation high, big retailers failing, stock market falls and the Eurozone crisis looking dangerous. 

So if things are improving how does this affect the chances of companies facing insolvency.  In fact, as the economy does better the insolvency rate tends to goes up. So why is this.   There is a risk of what is termed "overtrading".  Please see our previous blog on overtrading which illustrates how a businesses can run out of cash as orders improve.  Also as conditions improve the banks and other creditors start to call in loans as they feel they can better supply credit to companies that are taking advantage of the upturn and are not simply treading water.

Monday, 19 March 2012

Worldspreads in administration

Worldspreads, the spreadbetting firm, is the latest FSA regulated business to enter the Special Administration Regime (SAR) after a £13 million shortfall in client money was uncovered. This follows Pritchards Stockbrokers.  In an announcement posted on the stock exchange this morning the board said there was a hole of some £13 million and the shares in the company have been suspended.  The firm has around 5,000 clients. 


The High Court has appointed Jane Moriarty and Samantha Bewick of KPMG LLP as joint special administrators.

So what is the Special Administration Regime?
Following the collapse of Lehmans Brothers it was felt that the current legislation under the Insolvency Act 1986 was not sufficiently robust to deal with the complications of investment firms and their financial products. The issues of multiple cross liabilities, trusts, determining assets, valuation and the stability of the financial system raised additional challenges. Consequently, the Special Administration Regime or SAR was set up in 2009. It comes under the Banking and Finance Act but takes as much as possible from the Insolvency Act.

The Financial Services Authority has the power to appoint a special administrator if it feels that client's money is at risk.

Friday, 16 March 2012

Director disqualified for not keeping adequate records

Paul William Sharpley, a director of Property 360 Limited in Suffolk, has been disqualified from acting as a company director or controlling a company for 7 years after an investigation by The Insolvency Service.  The firm provided Home Information Packs and other marketing services for estate agents.  The director's disqualification was for the company not having adequate accounting records.

This was principally because Property 360 operated through Mr Sharpley’s personal and other bank accounts, and without proper records it was not possible to ascertain the financial position, income and expenditure or the use of company funds at any point during its trading.  At one point  the computerised bank report showed £76,098 as being in the bank at 2 March 2010 when in fact the balance was £22.  It was also not possible to establish how much VAT or PAYE was owed.  Although at liquidation it was estimated to be at least £59k.

Claire Entwistle, Director of Company Investigations North, said: “Failure to adhere to the basic requirements of business practice by keeping full records, ensuring company funds can be clearly accounted for and properly complying with taxation liabilities will be severely dealt with by The Insolvency Service.

Amazing milestone; 10million .uk websites, What is more amazing? Many businesses don't have a site

Huge milestone of 10m UK websites ending in dot UK has been achieved. The web is so powerful a marketing tool that you would expect that EVERY single business would have a website? Yes? Well actually no. We have daily enquiries from companies in difficulty, when we do some rudimentary searches online, their name comes up in general search directories, but they do not have their own website!

Many small engineering, services and retail businesses DON'T have a website, this is madness. One day the fax machine will not spit out orders, the orders will have gone to a more organised competitor either around the corner or across the globe. Retail customers will dry up and move on.

What is more, many websites are no more than static one pagers or they seem to miss the point. My wife has recently booked us on a short stay in a hotel/spa. The website has a picture of chairs and tables in the restaurant, but no menu.

The bar has a lovely vista it says, local produce served it says, no menu and no prices. The golf tariff link does not work. So you cannot see how much it is to play golf. At least 30% of the links do not work. No this is not a small one-off hotel, this is part of a national 4 star chain.

The message is, if you do not have a web site, get one, even a simple web page will be a start. If you do have a site, when did you last check it, update it or get some customers to give you feedback on it?

Free and very cheap software is available to build a website; there are thousands of freelancers, students and friends who can build it for you. So get cracking and join the 21st Century business world. Then make sure you use the site, test it and get feedback.

Wednesday, 14 March 2012

Unemployment rate reaches 8.4%

Unemployment is now running at 8.4% which is 0.1% higher than the previous month.  The unemployment rate one year ago was 7.8%.  This rise is not as bad as many had expected following the credit crunch where predictions of 3m unemployed seemed to be taken as inevitable.  The figures are no doubt due to mixed fortunes in the different sectors of the economy.  There have been large cuts in the public sector but some industries have been doing quite well, such as manufacturing. 

The low interest rates have kept a lid on any real sudden loss of confidence but there are still many risks for UK plc. Of course, as usual, there are large regional differences with areas such as the North East under pressure due to a shrinking public sector.

However it is worth putting it in perspective when compared with some of our European partners. 
Greece - 23%, Spain 19%,  France 9.4%

Tuesday, 13 March 2012

Distraint by HMRC

At KSA Group we are seeing increasing instances where HMRC has tried to recover tax using distraint.  In some instances they are turning up without warning over an historic debt.  This can be unnerving and damaging to your business especially if your staff have to deal with the field officer. 

If you want to know more then see our page about HMRC distraint actions

If you are being threatened by distraint all is not lost. There is still time to act.

Monday, 12 March 2012

What is a Provisional Liquidator

In Scotland they do things a bit differently when it comes to insolvency.  Read our page about the role and responsibilities of the Provisional Liquidator.

Game Group up for sale

It is no secret that Game Group has been finding it difficult recently with some of its suppliers unable to supply as they have had credit insurance withdrawn.  This is what happened to Woolworths before it went into administration.  The rent for the March Quarter is due in a couple of weeks and if it fails to refinance or be sold then the chain of computer game stores may be forced into administration.

The company has launched a sale of pre-owned hardware and software over the past few days, which some referred to as a ‘firesale’, although a ‘raise-quick-cash-to-pay-the-landlord-sale’ might be more apt.

Following a statement by the company this morning saying that they have not been able to source new products from suppliers the shares fell 73.8 per cent to 0.92p in early London trading.

They went on to say "It is uncertain whether any of the solutions currently being explored by the Board will be successful or will result in any value being attributed to the shares of the Company."

Sounds pretty serious for Game Group and it looks like the looming March Quarter Day could be the critical point

Game Group has over 1,274 stores worldwide.

Blogged by Robert Moore

Friday, 9 March 2012

Pritchard Stockbrokers in Administration

Pritchard Stockbrokers has today entered the Special Administration Regime (SAR) according to the Financial Services Authority after it was revealed that the firm had used client's money to pay its own expenses. 

Timothy Ball, Roderick Weston and Alistair Wood at Mazars LLP have been appointed joint special administrators.

So what is the Special Administration Regime?

Following the collapse of Lehmans Brothers it was felt that the current legislation under the Insolvency Act 1986 was not sufficiently robust to deal with the complications of investment firms and their financial products.  The issues of multiple cross liabilities, trusts, determining assets, valuation and the stability of the financial system raised additional challenges.  Consequently, the Special Administration Regime or SAR was set up in 2009.  It comes under the Banking and Finance Act but takes as much as possible from the Insolvency Act.

The Financial Services Authority has the power to appoint a special administrator if it feels that client's money is at risk.

Last month, WH Ireland announced it had taken on Pritchard's assets and its client book, which included some 8,000 accounts. following the FSA's intervention to prevent it carrying out any regulated activities

Mr Whyte of Glasgow Rangers fame is company secretary of Pritchard...

Thursday, 8 March 2012

Rangers in Liquidation Threat

The administrators at Rangers are hoping to secure a buyer for the club.  Duff and Phelps said that time was running out and dramatically said that the club may not be able to finish the season and there are worries that the club may be forced into liquidation
Negotiations over the payment of players are ongoing and the club needs to save £1m a month to keep going.  The players are looking for a deferral of wages which will be paid by the new owners if they materialize.  Although the wages of the players are small in relation to the total tax bill owed of £45m.

There may be new company formed that can continue to play football and the oldco be put into liquidation.  Joint-administrator David Whitehouse told Rangers TV: "The preferred scenario from our perspective both in terms of the return to creditors and a platform for retaining an ongoing continuous business is through a CVA.

Either way HMRC will need to vote in favour of the CVA for it to succeed but with a potential liability of £75m is the club viable in its present form...

Wednesday, 7 March 2012

Winding up petitions in sharp increase in February

In our latest analysis of winding up petitions we can report on a sharp increase in the number advertised in February of this year.  In February 2011 there were 537 winding up petitions advertised but in February 2012 this went up to 879!  This was the biggest increase we have seen.  As HMRC are the main issuer of petitions then this shows that they are beginning to take a hard line against companies who owe tax.

Interestingly the number of petitions issued in January was down on last year.  HMRC use a variety of methods to collect tax and we have also seen an increase in the use of distraint. Basically they tend to vary their collection methods no doubt to test and see what is most effective.


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.

We can get a lawyer to argue for the petition hearing to be adjourned and in many cases this can be for more than 30 days and delay any advertisement. This is more cost effective than having to seek a validation order.   This allows us time to draft a CVA and get the petition withdrawn.  Call us on 0800 9700539 for details

Tuesday, 6 March 2012

Port Vale Football Club is expected to go into administration today

Following the winding up petition that was presented by HMRC it looks as if Port Vale FC is to be put into administration.  An announcement was expected yesterday but was delayed as the club needed to get more information in order to apply for administration.  Stoke City Council, the clubs biggest creditor, has invested £600,000 to keep the club going after it paid back a large part of its loan to the Council.

The Valiants will lose 10 points, but administration will save the club from liquidation.

Read our new pages on "The effect of a winding up petition on a football club" and " The football creditor's rule"

Are you worried about your partnership becoming insolvent?

Of course, a business run as a partnership does not afford the same level of protection as a limited company or a limited liability partnership.  As such it is essential that you work out your objectives both business and personal. 

Take a look at our pages on partnerships.  Here we give the various options from stopping the partnership completely to keeping it going and advice if you are not sure.

Monday, 5 March 2012

KSA Group Insolvency Notices

Cahro Limited

In accordance with Section 140 of the Insolvency Act 1986, I, Eric Walls of KSA Group Limited, C12 Marquis Court, Marquis Way, Team Valley, Gateshead, NE11 0RU, give notice that on 8 February 2012 I was appointed liquidator of Cahro Limited. 

See full notice below

http://www.companyrescue.co.uk/insolvency-notices/cahro-limited-notice-of-appointment-of-liquidator


Digital Relevance Limited

A 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 13 March 2012 at 12.00 pm

http://www.companyrescue.co.uk/insolvency-notices/digital-relevance-limited-creditors-voluntary-liquidation-notice

Little Chef in Pre Pack Administration

We reported early in February that Little Chef were to close a third of its restaurants in a major cost cutting exercise.  What was not so clear at the time and went under-reported was the fact that it was done via a pre pack administration with Begbies Traynor acting as administrator.  At the time many other businesses were falling down especially on the High Street and Tesco had issued its first profit warning.  It looks like the media were not very interested in Little Chef at that time.  The Daily Mail was the only main stream publication that reported the pre pack administration. 

The fact that the chain was cutting a third of its outlets and had not given a timescale hinted at the move.  A pre pack administration and even a CVA can determine lease obligations leading to closure of premises. 

Charities in funding crisis

A leaked report at the weekend has suggested that charities are going to see a large cut in funding.  Although this has already been happening the scale of the cuts proposed has taken some by surprise.  The leaked report was compiled by the Association of Chief Executives of Voluntary Organisations (Acevo)  which helped to run the £100m transition fund set up by the government to help charities facing financial difficulties.

The report suggested that the 1,725 organisations applying to the fund faced losing 45% of their total income as a result of the government cuts.

It found applicants to the fund faced cuts of more than £520m in the current financial year, and estimated that the UK charity sector as a whole faced cuts of between £1bn and £5.5bn.

The government said that this report was not representative of the charity sector as a whole as this is not the only fund that charities can apply for.  In addition they stated that the applicants mostly came from the North East and North West.

So basically if you are a charity based in the North then it is likely that you will be hardest hit.  So what can you do if you face a shortfall in funding?  If the charity does not have any historical debts such as to HMRC then rapid downsizing will be necessary to avoid insolvency.  However, if you already have significant debts and the charity is limited by guarantee then you are able to use the same insolvency rescue tools as a company.  As such a CVA or company voluntary arrangement can be used to help pay off a proportion of your unsecured debts over time.   It is important to note that there are other "company" structures that a charity can take but if they are not limited by guarantee then the partners and members can be held jointly and severally liable for the charity's debts.

Friday, 2 March 2012

Fenn Wright Manson files intention to appoint administrators

Fenn Wright Manson, the high end women's fashion retailer has filed an intention to appoint an administrator.  This has given the retailer 10 days to appoint an administrator.  Meanwhile the company has a moratorium placed around it which will give it some protection from its creditors.
The womenswear chain,  has 17 stores and also has concessions in John Lewis and House of Fraser. The firm is working with restructuring specialist Zolfo Cooper to secure its survival.

The retailer was bought by Darwin, the private equity firm in October 2010 in a deal which saw its last remaining founder Colin Fenn exit the business.   There have been a fair amount of private equity backed retail businesses that have floundered recently.  They include Tobar, Hawkins Bazaar and Past Times.

If you are a private equity fund and have problem investees then talk to us. KSA Group has extensive experience of restructuring heavily geared companies WITHOUT the use of administration, pre-pack or receivership. Using informal work-out or company voluntary arrangements (CVA) we can effect radical restructure of the cost base, close down factories or stores, exit large numbers of managers and employees rapidly and generally with nil cash cost.

Blogged by Robert Moore

Thursday, 1 March 2012

Port Vale served winding up petition

Port Vale has been served a winding up petition by HMRC as they seek to recover £85k. Rumours about the club were circulating yesterday as they were unable to pay the wages of the players and staff that amounted to £180k.  It has emerged that the club had seeked to borrow £300k from Stoke City Council to stay afloat.
The city council is understood to be concerned about lending Vale more money as the club are still repaying a £2.25m loan taken out with the authority in 2006 and they had missed a few payments.  What is more the council has had to find budget cuts of £24m.

A spokesman for Her Majesty's Revenue and Customs warned they would not go easy on Port Vale.  They said;

"There is little HMRC can do for a business, be it a football club or not, whose viability is dependent either on not paying the taxes to which they are liable, or on special treatment not available to other customers with similar tax affairs."

Port Vale is the latest in a line of football clubs that HMRC have lost patience with.  Rangers, Hearts, Dundee,  Portsmouth, Truro have all been served petitions.  Truro and Hearts have paid the amounts outstanding whilst the others have been forced into administration.  What will be the fate of Port Vale?

See this page on winding up petitions and football clubs

North Staffordshire businessman Mo Chaudry had an offer for the club a few years back rejected and is thought to be interested, but only if they go into administration.
His efforts to buy the club were controversially rejected by the Vale board in 2010.
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