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

Friday, 30 November 2012

MPG has gone into administration

Building.co.uk has reported that a £2m dispute between main contractor, Galliford Try, and subcontractor MPG who worked on the Athlete's village at the London Olympics has resulted in MPG being forced to work on a company voluntary arrangement to allow it to have some relief from its debts.  MPG owes £10.2m to creditors but it says that the dispute with Galliford has left them with a big hole in cashflow.

The disputes relate to delays on the final two plots of the village, which together are worth £80m and contained 423 units, according to construction data company Barbour ABI.

MPG - had last reported turnover of £46.3m in the year to 31 December 2011

However, it does look like there was a  company debt problem even without the issues with Galliford as the CVA is expected to offer "at least" 32p in the £1.  So in order to survive it is needing to write off in the region of £6m.

MPG’s creditors will vote on accepting the CVA proposal at a meeting on 4 December. If they reject it this could force MPG into administration.

Several firms have gone bust on the athletes’ village project, including contractor P Elliott and subcontractors United AG and Trent Concrete.

Wednesday, 28 November 2012

Walmsley Furnishing in administration for third time.

Walmsley Furnishing, the Midlands-based furniture store chain, has gone into administration for the third time in seven years because of the economic climate.

The firm has 24 stores around the country, including Bradford Street in Walsall and the Mander Centre, Wolverhampton, employing 105 workers. Insolvency practitioners at  PCR have been appointed as joint administrators. The stores are still trading and there have so far been no redundancies.

SKG Capital bought Warmsley in September 2011 in a pre-pack deal for £250,000, which resulted in a number of store closures.  Unibrook bought the business in 2005 when it went into administration the first time.  At that time it had 100 stores nationwide.

Mr Phillips, a licensed insolvency practitioner at PCR, said: “Unfortunately Walmsley has, like so many other retail businesses, suffered from the economic recession that has blighted the British high street.
“We are currently investigating to what extent we will be able to fulfil orders, however this is dependent on our ability to acquire stock from third party suppliers. I would, however, stress that it will take some time for us to assess the situation.”

A customer helpline has been set up by the administrators to answer questions on 01922 704113.

Monday, 26 November 2012

Insolvency rate falls in SMEs apart from construction

Fewer firms are becoming insolvent according to the latest figures from Experian.  Almost all business sizes showed a fall with some 23% fewer businesses which employ 26-50 people falling into insolvency. It was only the larger firms with 500+ employees that saw an increase.   This is despite continued economic pressure on business.

Just 1,685 firms went insolvent during October, according to data from Experian, down 8.7 per cent on October 2011, to make up just 0.08 per cent of the total business population.

Leisure and business services saw a fall in insolvencies but building and construction firms were in trouble, with 5.4 per cent more of them becoming insolvent.




KSA Group Liquidation notices

Bulbecks Limited

A Meeting of the Creditors of the above named Company will be held at the offices of KSA Group Limited, C12 Marquis Court, Marquisway, Team Valley, Gateshead, NE11 0RU on 27 November 2012 at 12.45 pm.

See full notice below


A Long Distribution Limited

Meeting of the Creditors of the above named Company will be held at the Park Inn Hotel Cardiff North, Circle Way East, Llanedeym, Cardiff CF23 9XF on 29 November 2012 at 2.30 pm

See full notice below





Friday, 23 November 2012

DRL in line to buy Comet's online business

It was only a few weeks before the collapse of Comet that I was admiring the website www.appliancesonline.co.uk which is run by Bolton-based DRL limited.  Their website was cited at an online content marketing conference on how to do it!  It is not surprising then that their turnover has increased from £50m to £150m in the space of just 4 years to 2011.

Funnily enough they have now emerged as the front runner in buying Comet's online operations for a "seven figure sum"

John Roberts, who set up Appliances Online in 2000 said he would hope to run the Comet brand online, but said a deal would depend on whether he could rescue the brand before too much damage was done through the administration process.

 Administrator Deloitte is also understood to have received a bid for 140 of the 195 Comet stores, which could save more than 2,000 jobs, according to a report in The Sun newspaper.


Wednesday, 21 November 2012

What does voluntary liquidation mean ?


Creditors voluntary liquidation or compulsory liquidation means the end of the company and its assets are then "liquidated" or turned into cash for the creditors, if possible. Creditors voluntary liquidation (CVL) is the most common form of liquidation in use in the UK.

Usually the company has run out of cash, it cannot pay its debts on time and the directors are concerned that the business is simply not viable. They are also very  worried about wrongful trading.

A CVL brings an end to worry, if you have acted properly as directors, and it will allow you to get on with your life. Yes, you can be a director of another company after a liquidation!

What is a "Phoenix"?

You can liquidate a company and start the same business again, but only under strict rules and conditions. This is a potential legal "minefield" and you need to take proper advice.

Call us or read our Experts Guide to Creditors Voluntary Liquidation (see link below) if you want more details. This FREE guide tells you all you need to know about liquidation or call us on 0800 9700539 for a free chat through your company's issues.

http://www.companyrescue.co.uk/documents/KSAExpertsGuidetoCreditorsVoluntaryLiquidation.pdf

Tuesday, 20 November 2012

Recruitment company exits CVA 4 years early


Read about our client did so well in their first year of the turnaround that they exited their CVA early.

The managing director who is a self confessed sales man and not really a great financial controller had built up sales to £4.5m pa in 2009 with clients like Morrisons, Sainsbury etc.

The company provided mainly eastern European workers to warehouses in the Midlands on fixed rates. Working with Gangmasters licence and high quality standards was of course vital to work with blue chip customers.

His accountants advised that he needed to grow the management team and set up a  platform for a £10m sales business. This he duly did but had very poor luck with the management recruits. At the same time as recruiting and growing the management  team they opened a new branch in East Midlands.

The expansion was funded out of working capital and invoice discounting facility from  IGF Invoice Finance who were and remain very supportive. After 6 months the MD realised that the 6 extra managers, 6 PC’s, 6 expense accounts  and 6 extra cars had not been covered by increased sales and margins. Indeed the margins were under top down pressure and losses began to mount. Managers and their staff costs were mounting up and the new branch had also failed to cover its costs.

After losing £350k in the 2009 financial year the business started building up PAYE and VAT liabilities to cover cashflow problems. A time to pay deal was arranged and the company began paying £20k per month to catch up.

The MD decided that enough was enough and fired 5 out of the 6 managers. The cars which were on short term hire were returned and the laptops sold.

But still losses mounted.  

Read our recruitment case study to find out how this company was turned around and exited a CVA 4 years early!

Monday, 19 November 2012

Dissolved companies owe £4.7bn to creditors


Experian, the credit reference firm, has done some research and discovered that each year companies that are dissolved or closed down without going through a formal insolvency process owed £4.7bn to creditors.  This compares to the £11.7bn owed by companies that have gone into administration, or liquidation.


The credit ratings company analysed firms which closed down voluntarily since 2000 and found that taken individually, the debts left behind are small – around 35pc of these firms had less than £10,000 of total assets.


However, Experian said the “sheer volume” of businesses using this apparently benign route are generating a significant combined loss to creditors.

Max Firth, of Experian, said: "Most firms that apply to be struck off tend to have little or no debt owed to other businesses. However, hidden among these seemingly harmless business closures is a level of debt that has previously gone undetected.”

Not sure what the point is of this research/statement as it is inevitable that thousands of businesses are going to close owing small amounts of  money that  they can't pay and it is not cost effective for creditors to recover.  But the largest such creditor is almost certainly HMRC.

The cost of employing an insolvency practitioner to put a company into a voluntary liquidation when the debts are small sometimes does not make financial sense.  But as a director simply waiting until your company has completely run out of money is not good management. If the dissolution is rejected by say HMRC, then the company may be wound up by the Courts initiated by HMRC.

Then you will meet the Official Receiver and have to explain why the directors apparently drained the company of cash and left creditors with nothing. Does this sound like directors acting in the best interests of creditors? No, well it won't to the OR either. Thus personal liability for the HMRC tax debts or other creditors may become a real possibility.

When a company stops trading and owes nothing, or very small amounts of money then dissolution is one of the ways to bring matters to an end.  However, if the company has larger debts, then any creditor can oppose the dissolution and a compulsory liquidation may occur.  In any liquidation the conduct of the directors will be investigated.  So if you want to close the business make sure you do it properly.

The smart options is to ensure that before there are no funds left, you should place the company into creditors voluntary liquidation.

Hampson Industries to go into administration

Hampson Industries, the Brierley-Hill-based aerospace group is set to call in administrators after struggling with debts of £55m. Hampson, which makes tools used in the production of the F-35 Joint Strike Fighter, is expected to appoint Simon Kirkhope and Chad Griffin of FTI Consulting LLP as joint administrators later today.

The firm recently sold its entire share capital of BHW(Components) for £2.4 million as it looks to repay its debts.  The firm had been up for sale as a whole but there was not much interest and the plans were shelved

Earlier this year Hampson Industries' shares were suspended after the company admitted it was not in a position to publish its annual accounts in the timeframe required by listing rules.

Harley Medical Group in administration

The Harley Medical Group, which specialises in cosmetic surgery, has been forced into administration following the claims made by women who had the PIP breast implants fitted.  1,700 women were seeking compensation which ran into millions of pounds.   The firm said that it could not afford to replace all the patients implants free of charge, unless it actually ruptured and so the NHS has been doing the operations where there was deemed a significant risk.

It has emerged that all the doctors and directors have been transferred to another firm and are carrying on performing surgery.  Documents filed at Companies House reveal Aesthetic and Cosmetic Surgery Ltd was set up in September with the same directors as Harley Medical Centre and based at the same address near Harley Street.

This, of course, has raised questions about the process and left many people angry.  There is always a risk if you employ a private company to do anything let alone a surgical procedure. However, questions should be asked as to why this company's insurance or PI cover is not involved in paying for corrective surgery.  I would have thought that this would offer some recourse.  Why are they not paying out?  Did they actually have adequate cover?  The latter is surely the main question.




 

Friday, 16 November 2012

Retail sales in surprise fall prior to Christmas

Yesterday was a bad day for statistics and figures for the economy.  Retail sales figures saw a 0.8% decrease in sales volumes in October which follows the bounce back in growth which was recorded for September of 0.5%.  This comes on the same day as the Eurozone falls back into recession.

One of the main reasons for the decrease was the fact shoppers have cut back on food and clothing purchases according to the Office of National Statistics. Food stores reported the biggest monthly decline in sales since November 2011.  However the quantity of goods had increased by 0.6% when compared to last year.

This trend is a little alarming so close to Christmas and follows the demise of Comet last week.  However Comet's sales figures were broadly stable prior to the administration it is believed.


Christmas time will be a make or break sales period for many retailers and they must get their online stores working well and able to deliver!

If you are struggling and are looking for a plan B visit or retailer rescue pages

Wednesday, 14 November 2012

Hotel du Vin owners face administration

MWB, the owner of the Hotel du Vin and the Malmaison chains of boutique hotels, is in talks about how to refinance its huge debts with Deloitte lined up as administrators if the talks fail.   The shares have been suspended and are likely to be worthless.  At one point in 2007 the shares were trading at 300p but have fallen to 3p.

One of the main issues is that the company is in dispute with its part owned subsidary MWB Business Exchange about the repayment of £4.8m pound liabilities between the two companies.

Although the company has undergone a number of refinancings it remains highly indebted. New management took over from chief executive Richard Balfour-Lynn and finance director Jag Sing, who stepped down earlier this year.

The firm has been able to hold up revenues at its hotels, but has been unable to find ways of cutting costs, which have eaten into the bottom line. A failed venture into restaurants, called Bistro du Vin by former CEO Richard Balfour-Lynn has also drained around £1.5 million of working capital.

Administration looks  a likely option with the assets of the group sold off to recover some of the monies.  However, there is likely to be little return for unsecured creditors. 


Tuesday, 13 November 2012

Company Turnaround in 2013 - Out with the old, in with the new!

Turn of the Year – Turn of the Company. “Out with the old, in with the new” are familiar words at this time of year; they are also the fundamental principles of corporate turnaround. As we move from this year to the next, our three speakers – a lawyer, a financier and a practitioner - will look back at the old year and help us to prepare for the new. In a nut-shell: review refocus and get ready.

Time will be allocated for questions and answers. Attendees are invited to participate in some quality networking and enjoy the hospitality provided by the sponsors for the evening

 As Gold Sponsors of the Turnaround Management Association (UK) our guests attend for free to this CPD qualifying event.

Speakers:


Ken MacLennan, Associate, Clarke Willmott LLPKen MacLennan
Ken qualified as a solicitor in April 2008. He has a wide range of experience in corporate restructuring,  turnaround and insolvency work, both contentious and non-contentious. He has also been on secondment with a large high street bank in its restructuring team.
Ken has advised insolvency practitioners, banks, directors, companies, creditors, landlords, individuals and other stakeholders. His varied experience includes, pre-pack and trading administrations, restructuring advice, security reviews, equity and property stakes, antecedent transactions and asset recovery, and advice relating to CVAs, IVAs, administrations, liquidations and bankruptcies.



Nic Hanson, Director, Close Brothers Invoice Finance.Close
Nic Hanson
Nic Hanson has over 20 years of experience within the Invoice Finance industry and has recently joined Close Brothers to expand their presence in South Wales & the West of England. His focus is on providing funding solutions for small and medium sized operations whilst simultaneously increasing awareness of the Close Brothers brand and the advantages that the company has to offer to local businesses.




 Keith Steven, Founder & CEO, KSA Group Ltd.
Keith Steven of KSA Group Ltd has been rescuing and turning-around companies since 1994; he has worked for insolvency firms, turnaround funds and venture capital investors. Keith formed his own turnaround practice, KSA Group Ltd in 2001, and he is acknowledged as an expert in the delivery of CVAs for SME companies faced with financial difficulties.Keith Steven
Drawing on case studies from 2012, Keith will illustrate the variety of ‘turnaround tools’ available to directors and advisors in order to effect a company rescue, including formal and informal procedures and creditor negotiations – including with HMRC. Many of the key skills of Keith and his company are available via the internet free of charge; he will impart his advice on being the ready for the future with similar magnanimity.



Date

29th November 2012

Time
5.30pm - 8pm


Location
Clarke Willmott LLP,
1 St. Georges Square,
Bath Street, Bristol BS1 6BA


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

Monday, 12 November 2012

Radio 4 Discusses Zombie Companies on Tuesday Night

On Tuesday night 13th November at 8pm the Radio 4 programme, File on 4, will be discussing "Zombie Companies" and what effect they may be having on the economy.  See below for the link to the programme.

http://www.bbc.co.uk/programmes/b01ntfwh

The fact that there are thousands of inefficient businesses that are just getting by, saddled with large debts but unable to invest or grow is becoming more of a hot topic recently.


Wednesday, 7 November 2012

ING leasing pulls out of the UK


The economy could lose some £1bn of finance as ING Lease UK is closed down.  The leasing arm of the Dutch bank, ING, lends to thousands of small businesses that want to buy new vehicles and equipment.  Leasing contracts have become more popular as bank loans and overdrafts have been harder to come by.

Under a lease arrangement, a broker arranges the purchase of the equipment, which is owned by the leasing company. All the business has to do is keep up the regular payments.

ING has already announced the sale of its UK savings business, ING Direct, to Barclays. It has been off-loading assets to repay the Dutch government for aid received during the financial crisis in 2008.

The withdrawal of leasing contracts by the European banks has come about as these banks are being asked to hold more capital in reserve.

ING leasing UK has its offices in Redhill and half of its 300 work force are expected to be make redundant in the near future.  ING has been cutting back on many of its European operations that will result in the loss of 2350 jobs


Will there be a funding shortfall?

In 2012 31% of total investment in new machinery and equipment has been paid for through leasing contracts, so the ING closure will cause months of disruption. Other finance providers such as Investec Bank, Aldermore and Close Brothers will try and make up the difference but it is expected that there will be a substantial gap in funding especially for small businesses where ING did most of their lending.

Want to know about finance?

The banks not lending has ensured meant that more creative finance products have emerged.  Have a look at our raising finance pages on company rescue.


Tuesday, 6 November 2012

Disqualification for care home directors


Deepak Mohan Mirpuri and Arun Mirpuri ran Larongrove Limited, which operated the Abbey Grange home in Sheffield until August 2009 have been disqualifed from being company directors following an investigation by the Insolvency Service.

Monies belonging to seven vulnerable residents were paid into the home’s business account instead of being held separately.

The company subsequently went into administration, so the money could not be recovered.  The residents lost some £58k.

There was no suggestion that there was criminal intent so no fraud investigation was done.  However, good practise guidelines for care homes state residents’ money should be kept separately from the firm’s business account - but, instead, the owners used it as working capital.

After Larongrove went bust, Abbey Grange was taken over by another firm, Country Court Care, which introduced changes including a ring-fenced account for personal savings, and refurbishments.

Robert Clarke, head of company investigations at the Insolvency Service, said: “The orders made in this case send a clear message to other directors that if they run a business which causes harm to the public they will be investigated and removed from the business environment for a long time.”

In conclusion, if you are desperate enough to use clients money as working capital for your business then you really, REALLY, need to seek advice.

Monday, 5 November 2012

KSA Group Insolvency Notices

Liquidation Notices

Starfish Clothing Limited

A Meeting of the Creditors of the above named Company will be held at The Hubworking Centre, 5 Wormwood Street, London, EC2M 1RQ on 9 November 2012 at 1.30 pm

See the full notice below

http://www.companyrescue.co.uk/insolvency-notices/starfish-clothing-limited-s98-creditors-liquidation-notice

Strategic Aviation Limited

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 22 November 2012 at 12.00 pm

See full notice below

http://www.companyrescue.co.uk/insolvency-notices/strategic-aviation-limited-liquidation-notice

Friday, 2 November 2012

Insolvencies down 25% on last quarter has been reported widely.


This statistic comes as no surprise to many in the turnaround profession. Figures from the Insolvency Service show that 986 firms went into administration, receivership or a company voluntary arrangement in the third quarter of this year.  That was a 25% drop on the previous quarter.  This is not the whole story as liquidations that make up the largest type of insolvency procedure are down only 5.6% year on year.

R3, the insolvency trade body, warns about the "zombie" businesses that are just scraping by and paying only the interest on the debts and will get into serious trouble if the economy takes a turn for the worse.  The Telegraph business supplement ran an interesting feature on this phenomenon.  You can read it here.

The standard ran an excellent comment piece about the current market you can read it here
http://www.standard.co.uk/business/markets/anthony-hilton-maybe-there-are-too-few-insolvencies-8273363.html 

Low interest rates and quantitative easing are definitely helping companies stay afloat.   However, the article didn't allude to the fact that HMRC are also not putting pressure on struggling companies probably, in my view, as they want to concentrate for the moment on companies and individuals that can pay but have found a way not to pay!






Thursday, 1 November 2012

Save your business from going under


If you want to save your business from going under then you could use a company voluntary arrangement or CVA to do so. This gives the business a fighting chance and leaves you in control. For more details have a look at our new page.

http://www.companyrescue.co.uk/company-rescue/guides/save-my-business-from-going-under

Comet to go into administration next week

The suppliers of Comet are reportedly putting pressure on the company to pay in advance for its Christmas stock.  This is because they have been unable to get adequate credit insurance.  If the suppliers refuse to supply then simply the company cannot trade. This is what finally brought Woolworths to its knees.

We hear that the company has told staff that it intends to go into administration next week

The owners, OpCapita who bought the company for £2 but were effectively "paid" £50m to take it off Kesa's hands, have been stopping the slide in sales and have cut costs by reducing staff levels from 8,000 to 6,000.  This has prompted OpCapita to seek a sale of the business which has prompted the suppliers  action.  Administration is not inevitable but with little interest so far, it may be the only way that the business can continue to trade.

The retailer could have gone into a CVA which would have allowed it to shut down its poorly performing stores, always assuming that its creditors would have supported such a move.  Much would have depended on the position of its landlords.

The company could still exit the administration via a CVA but a pre pack administration may  be the most likely option if a buyer is ready to take it on.  But if a buyer can be found quickly and suppliers keep supplying then it may escape insolvency.

If you are an employee of Comet then please see our page help for employees.  However, please do not ring our offices or contact KSA, as we have no more  information than stated here.

Comet's customer care team is handling any customer inquiries on 0844 8009595.

Appliances online have set up a webpage to help those who have purchased or are about to purchase goods from major manufacturers.  You can see the web page here.  http://www.appliancesonline.co.uk/comet.aspx


Web Analytics