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

Thursday, 27 September 2012

Adidas insist Sports Direct pay full value of stock in JJB Stores if a prepack goes ahead.

In an interesting development Adidas has insisted that if Sports Direct were to buy some JJB Stores in a pre pack administration they would need to pay full price for the Adidas stock.   This is likely because Adidas may have retention of title or an ROT clause.  The stock is still effectively "owned" by Adidas until it is sold.  This allows the brand to control pricing and stop discounting.

In insolvency the "ROT" clause is important and is always a topic that generates debate in the insolvency world, particularly when the Courts pass judgement on a case.

 
If a supplier is owed money on products supplied can they demand them back under their ROT clauses!  It makes sense for a supplier to seek to protect his position as best he can until he is paid for goods supplied but once goods are supplied the old adage of possession is nine tenths of the law does invariably come to the fore. Not only do suppliers have to contend with issues of conversion, incorporation and identification in insolvency they now clearly have to consider the actual prevailing circumstances of the trading arrangements with a customer.

At KSA Group we are always prepared to adopt a pragmatic approach in the event of insolvency however there is the overriding principle that the assets of the company should be applied equally for all creditors and not just one. If ROT is applicable and the goods are readily identifiable and returnable then we would seek to reach a compromise with the supplier and/or return the goods in question. If not and the goods are of value to the company then they should be applied to the benefit of all creditors. ROT clauses are a protective mechanism for a supplier but once again we see that they cannot always be relied upon should a customer enter into insolvency.

Knowing your customer, keeping in regular contact and abreast of the situation will help minimise risk. Should the worst happen, keep your fingers crossed and hope your ROT prevails. If one of our insolvency practitioners is involved then please pick up the phone and talk – we will always be prepared to listen and to seek a pragmatic solution.

Wednesday, 26 September 2012

Guilfest is latest music festival organiser to go into administration


Surrey-based festival Guilfest is the latest of the festival organisers to go into administration, following poor ticket sales for this year’s event.
In a statement on the parent company Scotty Events said: “Scotty Events Ltd regret to announce that Guilfest has ceased to trade due to poor ticket sales at this year’s event in July.
“We assess that this was down to the worst weather conditions we have experienced in history of the festival, combined with intense competition presented this year from other events. On-going matters now lie in the hands of the insolvency practitioner Leigh Adams LLP”.  Guilfest had been running for many years so it was not a new operator.
Only yesterday Music Festivals Plc owned by Vince Power of Mean Fiddler fame also  went into administration.  Music Festivals Plc ran the Hop Farm and Benicassim events, amongst others.  Vince Powers firm last year made profits of £800k on a turnover of £11m.  
There is no doubt that the poor weather had a major impact on the festival scene this year but there has been such an explosion of new operators that there were too many organisers chasing too few tickets.

Tuesday, 25 September 2012

BM Associates Ltd Liquidation Notice

KSA Group Liquidation Notice



Meeting of the Creditors of BM Associates Ltd will be held at the offices of KSA Group Ltd, Tower 42, Level 7, 25 Old Broad Street, London, EC2N 1HN on 23 October 2012 at 11.00 am.

See full notice below

http://www.companyrescue.co.uk/insolvency-notices/bm-associates-limited-creditors-liquidation-notice

Monday, 24 September 2012

KSA Group Insolvency Notices

ID Talent Direct 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 19 October 2012 at 11.00

See the full notice below

http://www.companyrescue.co.uk/insolvency-notices/liquidation-notice-for-id-talent-direct-limited

Differences between IP, accountant and solicitor ?



There can be understandable confusion as to the differences between solicitors, accountants and Insolvency Practitioners and which to go to if you or your business are in financial distress. We hope this brief article may assist in clarifying.

Insolvency Practitioners are fully licensed and regulated professionals, just like solicitors and accountants. In fact, a large number of insolvency Practitioners are also qualified as accountants or solicitors since the skills overlap significantly. The regulatory body for Licensed Insolvency Practitioners is the Insolvency Practitioners Association.

The fundamental difference between an Insolvency Practitioner and a solicitor or accountant is that only an Insolvency Practitioner can be appointed to act in the following situations :-


  • As a trustee in bankruptcy
  •  As liquidator of a company
  • Individual Voluntary Arrangements
  • Company Voluntary Arrangements
  • As company administrator
  • Administrative Receivership of a company

Where confusion can occur is that solicitors or accountants can advise and prepare paperwork or attend any necessary hearings or meetings relating to any of the above, whether for the individual or business in question or for a creditor, but in terms of the role of formal office holder with legal duties, that role is only open to an Insolvency Practitioner. The other potentially significant point to bear in mind is that Insolvency Practitioners commonly step in where a company rescue is attempted, in the role of administrator. This involves the need to have excellent general business and management skills and in-depth legal knowledge, especially of employment law. 

It is not unusual for a solicitor or accountant to, on a client’s behalf, appoint an Insolvency Practitioner and many Insolvency Practitioners also instruct lawyers to deal with legal aspects for them, which again emphasizes that there is synergy between the professions.

In summary, if you are in the unfortunate position of needing to go bankrupt, either a solicitor or Insolvency Practitioner can help with the necessary paperwork. If your company is in difficulties and must be liquidated, you can seek advice from either a solicitor or Insolvency Practitioner but if you are considering the possibility your business can be saved, it’s a good idea to go and see an Insolvency Practitioner at an early stage. You may not need a lawyer.

The above content is supplied by Darlingtons Solicitors, a firm with office in North London and Central London, providing a range of legal advice for small business.

JJB Sports likely to go into administration as no buyer is found

Perhaps unsurprisingly JJB Sports are expected to call in the administrators following a suspension of its shares as no buyer has been found.  KPMG have been trying to sell the struggling business for a number of months.  Poorer sales than expected following the "Summer of sport" was the final nail in the coffin for the business.  Sports Direct and a number of other suitors have shown interest.

It is likely, but not definite, that the firm has filed a notice of intention to appoint administrators to allow time for a prepack sale of the business to be achieved without creditors attacking the company.  This notice of intention allows a 10 day moratorium to protect the company.  However, it is likely that the assets of the company will be sold in the next few days.  Sports Direct are in the frame but they may be subject to OFT scrutiny if they take on too many stores.  The company has 180 stores and 4000 staff

Either way many stores are likely to be closed or sold and jobs will be at risk.  If you are an employee of the business then please read our pages on help for employees.



Friday, 21 September 2012

KSA Group and Advantage Business Partnerships Seminar hosted by HSBC well received.

Jonathan Reeves introducing the Speakers from HSBC, ABP
and KSA Group
The event was hosted by HSBC with speakers from the bank, Keith Steven of KSA Group and Daryl Woodhouse from Advantage Business Partnerships.

Ian Hawthorn of HSBC talked about what the future held for businesses and the importance of exporting and how HSBC could support them.

Daryl Woodhouse demonstrated how important it was for businesses to take advice from experts on how to run their businesses as sometimes it is hard to be objective.  He also outlined the reasons for many businesses to fail and offered a free 2 hour consultation to businesses.

Keith Steven's presentation was explaining why CVAs can be a powerful tool to rescue companies that are running out of cash and how KSA Group needs turnaround people and business advisors to ensure that turnarounds are successful.

Afterwards there was much food and wine to lubricate the networking and everyone stayed for a good long time just not so much so as to outstay our extremely warm welcome from HSBC in Crawley.

We will be running more seminars on the topics of business performance and rescue in the coming months so watch this space.


Thursday, 20 September 2012

PAYE returns to be done online starting in April 2013


In a new initiative all PAYE returns will have to be done online by October 2013.  Pilot schemes are running from April 2013

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. In the current form the HMRC only knows the true liabilities on the 19th of May following the end of the tax year when the P35 is filed.

Failure to file these returns online in "real time" will result in fines from £2000 for smaller businesses and much more for large businesses.  HMRC are likely to know about businesses that are late with payments at a very early stage.  This means that companies need to be ready to talk to HMRC at an early stage

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!

Wednesday, 19 September 2012

CVAs in Action Seminar - A Success

The TMA UK's Regional Seminar on CVAs in Action was a great success.  A special thanks to Rachael Campbell and Gateley LLP for hosting the event and Jonathan Reeves of Set up and Go who helped organise it by coordinating the hosts, us the sponsors, and the TMA to bring it all together.

43 people attended and heard about how CVAs can be a powerful and flexible tool for directors and investors in distressed companies.  The attendees learnt how the mechanism can change management, cut the cost base and rescue businesses ranging from Zoos to Retailers.  Also they heard about CVAs from a Landlords perspective and why in some cases they do feel that they are unfairly treated.  Rachael Campbell have acted for Fitness First Landlords who sought to challenge the CVA.

A few drinks and food afterwards ensured that people went home with some business cards, insolvency toolkits and some new knowledge and rekindled enthusiasm for the rescue mechanism.

A few common myths were dispelled such as HMRC won't support them and that redundancy compensation will be paid by the government as it is an insolvency event.




Tuesday, 18 September 2012

CVAs in Action - Seminar in Birmingham 18th September

The Seminar on CVAs in Action in Birmingham is officially sold out but there are a few last minute places.  Details below.  If you can't make it and would like to know more then please get in touch

CVAs in action - Free Seminar in Birmingham hosted by Gateley LLP and sponsored by KSA Group



CVAs have been in the press recently with Glasgow Rangers and Fitness First both proposing them as ways
to rescue and restructure their businesses and even Travelodge are now considering it.

We warmly invite you to learn how they work from both the debtor and the creditor's point of view at our Free Seminar.  As Gold Sponsors of the Turnaround Management Association (UK) our guests attend for free to this CPD qualifying event.

Speakers:

Rachael Campbell, Associate Lawyer, Gateley LLP.
Turnaround Lawyer.

Bryan Green,
CEO & Principal, Tnui Ltd.
Lawyer, Funder and current President, TMA-UK.

Keith Steven,
CEO & Principal, KSA Group Ltd.
Turnaround Practitioner.


Date

18th September 2012

Time
6pm - 8pm


Location
Gateleys LLP
One Eleven
Edmund Street
Birmingham B3 2HJ


Drinks and refreshments will be served
afterwards so there will be opportunities for
some networking and you can take away our USB
Toolkit with the hundreds of guides on
insolvency matters.


If you would like to come along as a guest of KSA Group please RSVP on
020 7877 0050 or email me at robertm@ksagroup.co.uk

More details are available on the TMA (UK) Web site This is a CPD Qualifying Event

JD Sports to close more Blacks Shops


JD Sports Fashion has warned that it may need to close more Blacks Leisure stores.  This comes after the JD Sports bought it out of  administration for £20m in January.

The group has already closed 93 of the worst performing stores but a further 50 may need to close as it targets long-term estate of around 150 sites.

It has also said that it is likely to drop the Millets brands and concentrate exclusively on the Blacks name.

As expected, Blacks recorded a £10million loss in the six months to July 28, helping to cut JD’s profits to £2.9m from £20.1m a year ago.

JD Sports said it had inherited a business with a severe lack of stock in many core lines as well as an excessively large and over-rented store portfolio.  What is more the very wet summer saw a fall in camping products which will need to be cleared.

The 350 sports stores recorded growth of 3.2% in the UK and Ireland in the first six weeks of the second half but fashion brands, which include Bank and Scotts, saw a 6% fall in underlying sales over the same period.

The retail sector is still under some strain and many shops are still paying rents that were agreed during the boom years.  However that was 5 years ago and rent reviews and break clauses may start to alleviate some of the pressures.

Read our retailer rescue pages  for more information on how to survive the difficult market.


Thursday, 13 September 2012

XchangeTeam Recruiters go into liquidation

The recruitment specialist ceased trading on 5 September, with liquidation proceedings starting on 19 September it has been reported

Xchangeteam, which was founed in 1999 by Emma Brierly  had offices in London and Bristol. The company covered recruitment in the communications, client services, digital, marketing and media sectors. CEO Emma Brierley is on the Executive Board of APSCo, the professional services recruitment trade body and is chair of their marketing sector group, M Squared, which represents Marketing, Media, Creative and Communications Recruiters.

Butcher Woods are expected to be the liquidator is overseeing the liquidation process of the firm, which joined the Pertemps Network in 2011.

The Xchange Team had held the Freelancer of The Year awards annually since 2003. Last year, the company made it onto the Recruiter Hot 100.

If your recruitment firm  is struggling then please read our guide on how to rescue a recruitment firm.   The guide has over 96 pages.

KSA Group Insolvency Notices


The Real China (Express) Limited in liquidation


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 27 September 2012 at 11.30 am

See the full  notice below

http://www.companyrescue.co.uk/insolvency-notices/the-real-china-express-limited-s98-creditors-voluntary-liquidation-notice



Ontime Media Limited s98 Creditors Voluntary Liquidation

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 27 September 2012 at 2.15 pm

See the full notice below

http://www.companyrescue.co.uk/insolvency-notices/ontime-media-ltd-s98-voluntary-liquidation-notice

Friday, 7 September 2012

What happens at a CVA Creditors Meeting?

Directors are often worried about what happens at the creditors meeting where the vote on a CVA proposal is made.

Read our page on CVA creditors meetings to find out that it isn't something to worry about unduly.

A testimonial from a happy client whose company has entered a CVA

I met the director of this training firm a couple of days ago just prior to the CVA creditors meeting.  The creditors meetings are often a source of worry for the directors but in practise as long as the creditors have been properly handled and informed in a professional way they rarely turn up to the meeting. ( No creditors did attend )

After the meeting the company was officially in a CVA and she sent us the following the email;


As we have now finalised the CVA for ********************* Limited I just wanted to drop a mail to say thank you to all of you and your extended team for all your support in the last 6 months.

I especially wanted to thank Marie I am sure she has been pulling her hair out with me at several points during the process but she has remained very supportive and professional throughout.

It has been a very difficult time for me but I have learnt a lot during this process but in a nice way I hope I will never have to use this service from KSA Group ever again!!!

I would highly recommend KSA Group to anyone in the future that may require this type of service.

Again thank you to the whole team

Many thanks

To see more happy clients comments then please read our testimonials page.

Thursday, 6 September 2012

North East Law Firms Face Insolvency

According to R3, dozens of law firm based in the North East could become insolvent following the introduction of the so called "Tesco Law" whereby non lawyers can set up legal practices.  The new law is enshrined in the Legal Services Act.  Ironically, Tesco have shown no interest in setting up legal practices in their stores!  The act was brought in in the hope that the legal services could be more accessible to the public and allow more competition.  It is that very competition that is getting the lawyers worried.  Inefficiencies  are being ironed out and economies of scale are in the mind of lawyers with a recent flurry of mergers.


R3, using the somewhat crude instrument of the Fame Database, have found that five North-East law firms – about three per cent – are at high risk of failure while a further one in four – 50 businesses – face significant risk of insolvency.

R3 president Lee Manning said: “The North-East is home to some of the best legal practices in the country, but none of them are immune to the challenging environment in which everyone is operating.

“The legal services sector is a very crowded market – firms that are not competitive will clearly have problems in thriving in such an environment.

“Unlike many other businesses, limited liability partnership, partnerships and sole practitioners are not directly assessed for tax on the business’ profits, but will commonly arrange to settle individual partners’ liabilities.

“While ideally, a tax reserve fund will have been maintained for this purpose, it is not always the case that it will have been, particular when the economic climate is as it is today.

“Careful planning and management of taxes can help to give businesses an edge and make this time of year less daunting, and we would urge any firms that are worried about their financial future to seek professional restructuring advice before it’s too late.”

So well said Lee.  Indeed given the potential significant personal impact that partnership insolvency can have it is essential that lawyers do seek advice early.  Most importantly though there is no need to fear talking to a professional turnaround advisor or insolvency practitioners.  If liabilities have built up then there is always the possibility of doing a time to pay or informal arrangement with creditors.

Talk to our Director of Turnaround Eric Walls who is based in our Gateshead Office.  He can tell you all the options.  Perhaps first take a look at our Plan A for Lawyers pages


Wednesday, 5 September 2012

La Tasca in CVA vote

La Tasca, the Spanish Tapas chain with 48 restaurants, has had its CVA proposal put forward by Grant Thornton approved by 85.2% of its unsecured creditors on the 28th of August.   The deal was that the restaurants are to be able to pay rents monthly and 19 restaurants have agreed a rent reduction.

The level of the rent reduction we do not know but yet again another retailer is helped by the CVA process. Simon Wilkinson, the new CEO said; the management of the chain is confident that a successful CVA process will secure the company’s future, safeguarding many jobs in the process.

He said: “We are also confident it will ensure the business moves forward profitably and attracts new investment, which in turn will allow re-investment in the existing estate and a programme of acquisition & expansion both within the UK & Internationally.”

Travelodge saved by a CVA

Travelodge, the budget hotel operator, has been saved from administration by a company voluntary arrangement (CVA)which was approved by creditors.  This has allowed the operator to slash its rents payable to landlords on 109 of its 500 hotels by 25% for 3 years.  As part of the deal Travelodge are offloading 49 of its hotels and paying a reduced rent of 55% on those until they are sold.  KPMG who have arranged the CVA said that unsecured creditors will receive a dividend of 23.4% instead of the return of 0.2% in the case of administration.

Yet again, the press and media call the company voluntary arrangement "controversial"!!  The deal was approved by 97% of the creditors and 96% of the landlords.  In order to get a CVA approved you need 75% of the creditors to agree.  The main lenders to the group Goldentree Asset Management, Avenue Capital and Goldman Sachs have agreed to write off £709m of debt.  As part of the deal £55m will be injected into the hotels for refurbishment.  Which is needed given the debt payments left precious little for essential freshening up.

All in all this is a fantastic result for Travelodge and shows the power of the CVA mechanism.  None of the hotels are going to be immediately closed but put on the market.

In a further effort to bring in cash the hotels are having a 70% off sale allowing people to book rooms for £25. The overall occupancy rate I am not sure of but this sort of sale is sure to help.




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