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

Tuesday, 31 December 2013

KSA Group Sells Sharda Glass Business

KSA Group sells Hayes based Sharda Glass business just before Christmas 2013. More than 60 jobs saved. Full news released 2nd January.

Happy New Year From KSA Group

We hope that 2014 is a prosperous year for all of our readers and for the UK economy. 

UK growth is underway, some say it is lopsided growth, but recovery is surely better than recession in any shape or form? Personally speaking, I can see faster growth ahead than the general forecast consensus. The "internet revolution" and small and medium sized businesses will drive the economy along - even with lower Government spending.

My prediction is for full year growth of around 3.3% in 2014, unemployment will fall below 7% and there will be a (modest) move to raise interest rates perhaps as early as November 2014.

What's your prediction?

Please enjoy tonight and tomorrow and we look forward to speaking to our colleagues, friends and business acquaintances in January.

Keith Steven

Monday, 23 December 2013

How to help your clients in 2014

If you have a client call you up in 2014 saying they are really struggling and have just received a winding up petition what will you do?

a)   Say;  "I am sorry to hear of their situation but we are not insolvency practitioners so can't really help"

b)   Say; "please pay my bill first and then I can talk to you."

c)  Request an insolvency toolkit from KSA group, if you haven't already got one, and discover how you can stop your client and perhaps others going into liquidation and not paying your bill.

C is the right answer!

Our insolvency toolkit will demystify the jargon and help you understand all the options open to a struggling business, which, by the way, is not just administration or liquidation!

The toolkit will also show how you can earn EXTRA income from a client who is being rescued by us by providing services that are essential in any turnaround situation.

If you need urgent advice we will talk to all advisors for no charge.  To request a toolkit then please send an email to robertm@ksagroup.co.uk or for urgent advice on insolvency issues then call us on 0800 9700539 or 07974 086779

We have huge amounts of resources online as well at http://www.companyrescue.co.uk

Friday, 20 December 2013

Christmas decoration company is in administration

Fuzzwire, a festive decorations company, has brought in administrators after experiencing cashflow problems and difficult trading conditions over the last few months. It has previously put up decorations in Canary Wharf, shopping centres like Lakeside and Bluewater, as well as some of the UK’s biggest property firms.

FRP Advisory has been appointed administrator after 190 jobs were cut earlier this week, with 65 of them full-time and the rest part-timers or self-employed contractors. On-going contracts have been transferred to Australian company, MK Illuminations, in order to ensure decorations will be taken down for property owners in January.

It is yet unknown whether contractors will be employed by MK Illuminations.

We are not involved in the administration and questions should be directed to FRP Advisory who are handling the administration.

If you are an employee of the business, and you're worried about what might happen in the future, then please listen to the video below as it will tell you your rights as an employee of a insolvent business.  There is a link at the end of the video to the Government website which expands further on what you need to know.







Thursday, 19 December 2013

Solicitor firm, HilliersHRW, is in administration due to PII

The solicitor firm, HilliersHRW, based in Herts and Bedfordshire has gone into administration. They were unable to pay their Professional Indemnity Insurance (PII) and therefore could not continue to practise.

34 jobs were lost, however most employees have been transferred to nearby firms, leaving just seven members of staff to oversee the administration process. Hilliers had already given on-going work to other local firms by the time FRP Advisory was appointed administrator on the 9th December.

The firm requested an extended Professional Indemnity Insurance period from the end of October and were allowed to continue working with existing clients but not take on any new contracts. However, Hilliers were unable to get cover ahead of the 29th December deadline, therefore chose to appoint administrators.

According to the SRA, 185 firms have requested extended Professional Indemnity cover before the deadline, revealing that 153 firms would go bust if they could not secure cover by the 29th December. In its first year of new PII regulations, many firms may have to close after the deadline.

If your firm is struggling with high PII premiums and you need legal and insolvency advice, call Grant Jones on 07815 873370.

Tuesday, 17 December 2013

Good news for Dixons

The electronic retailer has reported that profits and sales are on the up, even after competing with Currys and PC World.

Dixons has struggled for the last few years alongside other high street retailers, like Jessop’s and Comet, but have come out fighting after reviewing price models and restructuring the company as a whole. It’s now planning to sell a million tablets this Christmas.

It has suffered losses of up to £83.5 million, largely due to Pixmania and Electroworld, its digital businesses that had been dragging the company down. Once it was able to split from them, Dixons has been focusing on completely updating the stores to bring a fresh lease of life and thankfully customers too.

Despite profits improving, shares dropped this morning on account of the recent debt figures as well as a lack of dividends.

Sebastian James, Chief Executive of Dixons, believes that the company can only improve and has ‘never looked better’.

Restructuring a business is a great way to identify financial issues and discover new ways to move the business forward. It can be very challenging for directors but also hugely rewarding if it allows the company to continue. For advice on cutting costs and dealing with cashflow problems, call us on 0800 9700539 for free confidential and honest advice.

Monday, 16 December 2013

Visit Company Rescue's News page

We have recently launched a News section on Company Rescue - keep up to date with the latest goings on in insolvency and business!

Help is at hand for retailers this Christmas and New Year

With the latest reports revealing lower than expected profits on the high street this December, it’s looking bleak for some as we head towards the New Year. Despite growing economic confidence, high street retailers are failing to see a sufficient increase in spending in the lead up to Christmas. According to the British Retail Consortium (BRC), high street footfall in November has fallen below last year’s level by 4.2%. Worryingly, there has been an overall 2.9% drop across the general retail sector.

Researchers speculate that consumers have delayed their Christmas shopping trips in order to benefit from December sales. With wages failing to keep up with inflation, many customers are feeling the pinch and are holding off until the last minute. The consensus is that it’s been a slow start for retailers, however there is still time to catch up in the last week before Christmas (and then of course the January sales which begin for some retailers on Boxing Day).

Not surprisingly, growth in the non-food market over 2013 has come via online transactions, sparking the on-going (and inevitable) need for companies to have a good online presence.

If the lead up to Christmas hasn't been quite the miracle you’d hoped for, now is the perfect time to consider other options to help your business. The rent quarter may be coming up for some companies so it’s important to get your finances in order and take some time to review the business. Whether it’s cost-cutting, restructuring or securing a CVA with creditors, there are ways to help your company continue in the New Year.

Now is the time to start afresh and head into the New Year with support around you. We offer free, detailed guides on how to turnaround your company and can give you honest guidance, specific to your business.

Wednesday, 11 December 2013

Another customer safe from administration and in a CVA

A recent customer admitted other potential advisors were pushing for them to go into a pre pack administration, but with KSA's help, this business is in a CVA and will continue trading and returning money to creditors, including paying back a proportion of their £500k of tax liabilities to HMRC.

We were sent the following email:

All,

I just wanted to thank you all for your assistance with the CVA preparation.

With 100% of creditors voting in favour this is a testament to your experience and process in putting these together.

The last few weeks has been a nerve wracking time and timing has been close to the wire, but the end result means that we are now well positioned to execute our plans going forward to the benefit of all.

In deciding to go with KSA we had numerous other providers who were either cheaper or pushing a pre-pack route. You have delivered what you set out and certainly a much better outcome than administration.

Marie, a special thanks for your efficient and calm handling of all the issues that have arisen, and Andrew – your “mother of all spreadsheets” will now double as our operating budget for next year.

Finally, if you ever have any prospective clients who require a reference, I would be happy to talk with them.

Regards

Tuesday, 10 December 2013

Bradford Bulls to go into administration again?

As previously mentioned (back in March and July 2012), the Bradford Bulls rugby club had been facing many financial issues and was on the brink of liquidation - the club was eventually taken over by millionaire businessman Mark Moore. However, bad news for Bulls fans as the latest reports have revealed the club is close to administration again!

Bradford Bulls has allegedly asked players to take a 10% pay cut to avoid falling into administration but they have refused. They are already running up huge debts and need to save over £400,000 to keep the club going.

League 13, the Super League Players' Association, is looking into the issue and is awaiting further information to try and help. They hope history won't be repeating itself for the Bradford Bulls.

If the club does go into administration, there is still a chance of using a CVA as an exit strategy. However, time will only tell whether the club can find sufficient funding to keep going.

Rail construction and infrastructure company, Metropex Group, is in administration

Begbies Traynor has been appointed administrator for the Metropex Group, a rail and underground construction specialist company based in London. Founded in 2004, the company has worked on the underground, providing stone and concrete for the rail structure as well as completing projects for Gatwick Airport and Birmingham New Street station. The Group revealed it has secured contracts between £50,000 and £3 million over the years, however trading stopped last month, from the 21st November 2013.

Metropex has been struggling to stay afloat since losing a significant amount of work from a contract and facing ‘challenging trading conditions’. Begbies Traynor will review the business and assets, focusing on ‘maximising the realisation of assets for creditors’. 2012 accounts show assets stood at £1.8 million with liabilities of over £1.7 million.

We are not involved in the administration and questions should be directed to Begbies Traynor who are handling the administration.

If you are an employee of the business, and you're worried about what might happen in the future, then please listen to the video below as it will tell you your rights as an employee of a insolvent business.  There is a link at the end of the video to the Government website which expands further on what you need to know.







Monday, 9 December 2013

SMEs in cashflow crisis

According to the latest figures from Everline (formally known as Wonga for Business), small businesses are currently experiencing cashflow problems and are very much concerned about the future. The short term lender for businesses revealed more than 250 SMEs surveyed have struggled with cashflow, with some admitting to delaying payments to suppliers and stopping marketing campaigns. 29% of respondents stated the lack of cashflow has threatened their business growth, with 81% struggling with a cash shortage of under £10,000 every month.

It can be difficult for SMEs to access lending in the current economic climate, as Funding for Lending reports have shown. 43% of small companies believe the whole situation is far worse than before the recession, with over half that have applied for loans in the last couple of years turned away at the door.

If you are having problems with cashflow, the best thing to do is to review  your current system in place and read our top ten tips to managing company cashflow problems (which includes a free download of our daily cashflow spreadsheet).

Cashflow can be a common issue with businesses but it is always best to address any issues before the situation gets worse. Remember turnover is Vanity, Profit is Sanity and Cashflow is reality. You can easily be a profitable business with growing turnover yet still run out of cash and become insolvent because you are unable to pay your creditors. In a growing economy this can become increasingly common as companies chase business but then don’t have the adequate financial controls in place.

In these situations short term lending is one way out of the problem but it is worth looking at other forms of financing and refinancing.

Friday, 6 December 2013

Video - What is a CVA?

Watch our video which explains what a CVA is and how it can help your company!


Thursday, 5 December 2013

Autumn Statement: George Osborne caps business rate to 2%

In today’s Autumn Statement, the Chancellor has bid to cap business rates to 2% instead of the expected 3.2% (linked to RPI inflation). George Osborne admitted ‘business rates are too high’ and has also revealed plans to extend a rate relief scheme for small businesses until April 2015. Our previous blog asked whether rates would be frozen, in order to re-evaluate the current outdated system that, in some cases, ends up charging higher business rates than the rent itself.

Unfortunately, Osborne made no such promise to address this issue which many industry officials, including Business Secretary, Vince Cable, have tried to raise. Because of the system in place, high business rates have overtaken rent costs for retailers in particular, leaving them only just holding on.

How will the cap on business rates affect your business? If you’re a high street retailer, a cap on rates is certainly better than nothing, however, it’s still very clear that the system is not working very well and needs to be updated to reflect the appropriate rate charges against rent. Good news for some small businesses though as they can take advantage of the rate relief scheme until 2015.

Did you know that a CVA can allow you to vacate premises even if you have rent arrears? Rates can also be bound in the CVA.  See our page on retailer rescue for more information:

http://www.companyrescue.co.uk/company-rescue/guides/retailer

Wednesday, 4 December 2013

HMRC plans to cut nearly 3,000 jobs

Through a voluntary exit scheme, HMRC is planning to cut nearly 3,000 jobs across the UK, leaving only 1,000 jobs safe. Those at risk include four Welsh offices, 240 jobs in Northern Ireland, 80 in Devon and 150 in Scotland. While there is no indication of offices closing soon, staff were told their offices were not included in HMRC’s long-term plans. 

The reason for these job cuts is the result of customers taking advantage of HMRC’s online services. The Public and Commercial Services Union (PCS) are opposing the plans and will use the 90-day redundancy scheme to re-evaluate budgets and address any alternatives. They've already stressed that staff shortages have caused problems within HMRC. 

34,000 jobs have been cut since 2005 due to Government budgets and a further 10,000 jobs are to be dropped by 2015. HMRC states the latest planned job cuts concern fixed-contract workers only, not permanent staff. 

It could be viewed that staff shortages will only add to the increasing issue of HMRC failing to chase business debt, which has been blamed on the rise of so called “Zombie Companies”. It is important that HMRC recognises companies that can and should be saved against those that, quite frankly, should not be allowed to continue. Companies that haven’t paid their taxes end up taking business away from companies that HAVE paid their taxes. As such, HMRC need to look at companies that are on extended time to pay schemes and be ready to take action at the end of the period. The introduction of Real Time Information for PAYE returns should make this task easier and will stop companies from hiding their liabilities.

Tuesday, 3 December 2013

Hearts CVA approved by creditors

As mentioned previously, the Scottish football club had recently postponed a meeting with creditors to discuss using a CVA. Having suffered financial difficulty for some time, it’s now been revealed the CVA has been approved by creditors, including Ukio Bankas. However, the CVA still depends on whether the club can obtain 50% shares held by UBIG as well as agree to an appropriate sale arrangement

The fanbase, Foundation of Hearts, have put in a bid to become the largest shareholder of the club and they believe the CVA will bring Hearts out of administration. BDO have been appointed administrators, commenting, ‘this is a good result for Hearts but we clearly have some way to go before this deal is concluded.’

For more information on CVAs and how they can turn your struggling business around, click here: http://www.companyrescue.co.uk/cva-company-voluntary-arrangement


Monday, 2 December 2013

Car dealership, Verve Group, is in administration

Founded in 1998, the Verve Group has gone into administration after having financial problems with falling sales and an unsuccessful attempt to sell a van centre in Glasgow. There were three dealerships, one body shop and a van centre across central Scotland, based in North and South Lanarkshire, East Ayrshire, West Lothian and Glasgow. It is reported that 115 jobs will be lost with the remaining 10 staff helping administrators to wind down the business.

The business stopped trading before KPMG were appointed administrator, with reports revealing that vehicles have been repossessed by funders as well as franchise contracts ceased. 
Blair Nimmo, one of three appointed administrators from KPMG, said, ‘the company had an excellent reputation but has been experiencing serious operating challenges for some time and unfortunately could no longer continue as a viable business.’

Scotland has had a lower insolvency rate than the rest of the UK for a while now, with Begbies Traynor reporting a 13% fall in insolvencies. Interestingly, however, there has been a 23% rise in critically distressed businesses in Scotland. Read more about it here

We are not involved in the administration and questions should be directed to KPMG who are handling the administration.

If you are an employee of the business, and you're worried about what might happen in the future, then please listen to the video below as it will tell you your rights as an employee of a insolvent business.  There is a link at the end of the video to the Government website which expands further on what you need to know.







Friday, 29 November 2013

Publisher of Yellow Pages is in administration

Hibu, the publisher of the Yellow Pages, has gone into administration. Previously called Yell Group, Hibu has called upon Deloitte administrators in a bid to save the business from going bust. They have recently agreed to transfer ownership to a holding company as part of a restructuring plan to try and save 12,000 jobs.

The publisher is in debt of £2.3billion and has seen sales fall drastically over the years, largely due to the internet. However, there is still much support behind the publisher and Hibu plans to continue trading while the business moves to a holding company (owned by Hibu's lenders). Hibu assures that there 'will be no impact on Hibu's employees, customers, partners or suppliers.' Back in July, the lenders took control as part of a major restructuring plan to save jobs.

The chairman, Bob Wigley, feels confident that the new digital services and recent marketing campaign will help drive the business forward.


We are not involved in the administration and questions should be directed to Deloitte who are handling the administration.

If you are an employee of the business, and you're worried about what might happen in the future, then please listen to the video below as it will tell you your rights as an employee of a insolvent business.  There is a link at the end of the video to the Government website which expands further on what you need to know.







Wednesday, 27 November 2013

Latest business figures from ONS

Recent statistics from the Office of National Statistics have shown there was a 3.1% increase in new businesses between 2011 and 2012. However, an increase of 25,000 businesses went bust, around 11%.

Perhaps good news for 2012 though: 270,000 businesses were born last year compared to 255,000 businesses that closed.

'The move towards economic recovery has seen birth rates being higher than death rates from 2011, but the gap has narrowed in 2012'.

London had the highest rate for new businesses at 14.8% and also the highest death rate.

This is positive news for the UK economy, with 2013 showing signs of strength across companies and businesses. Those that are struggling to stay afloat do not have to settle with liquidation. There are a number of alternative options to consider, like CVAs, pre-packs and informal agreements with creditors. For more information visit our options page to help you find what's best for your situation.

Tuesday, 26 November 2013

Web server issues

We apologise that the Company Rescue website is currently down - we will have it back up as soon as we can.

Could fan-ownership be the answer for struggling football clubs?

According to recent findings by Begbies Traynor, football clubs are facing increasing financial hardship, with 8% of 72 clubs (from the Championship to League two) suffering. The Red Alert Football Distress Report highlights the ‘downward spiral’ of smaller clubs that are unable to attract enough funding to continue going for much longer. Poor attendance and wavering season ticket revenues has contributed to the financial problems.

Partner at Begbies and previous administrator for AFC Bournemouth, Gerald Krasner, believes the way forward is the Community Interest Company model to keep football clubs alive. The income gap between the top and bottom of the league is ever increasing, so the idea of a CIC is thought to be a positive step forward to ensure a club’s future stability.

Darlington FC and Eastbourne are using this company model to lead the way for fan-based ownership in a bid to maintain stable funding and long-term security for the club. Barcelona club is an example of a CIC working well, showing the community model can still bring in big money and increasing interest.
Krasner stated, ‘aside from an overseas benefactor, community ownership is the only viable long- term solution for many clubs.’ Both the government and HMRC are currently supporting this company model which will likely give an incentive for clubs to review their business structure.

A CVA can give struggling football clubs the space and time to revaluate and restructure the business in order to find a suitable way forward as well as protect the club against aggressive creditors. Some clubs have even entered administration before using a CVA. Have a look at our page on football clubs and CVAs for more information.

Monday, 25 November 2013

GP firm, MP Locums, wins two big contracts whilst in a CVA

Who says the CVA doesn't work? Below is a good example of the government backing a struggling organisation:

http://www.dailyrecord.co.uk/news/scottish-news/gp-firm-win-two-huge-2845175

The clear message here is that a business can still secure on-going contracts (in this case two large ones) whilst in a CVA.

This on the same day that RBS has been criticised for allegedly putting viable businesses into administration....

At least HMRC are commited to the rescue culture!

RBS blamed for knocking down failing but viable companies, for gain

Vince Cable’s advisor, Lawrence Tomlinson, has revealed publicly what many practitioners already know; that the Royal Bank of Scotland has failed to support distressed but viable companies and is, in certain circumstances, instead using them for profit.

His report claims that the bank’s Global Restructuring Group (GRG) is forcing viable companies to go bust by purposely charging high rates and fees, and then selling off the business assets cheaply to make a profit in its own West Register company.

Lawrence Tomlinson, who works for the Department of Business, Innovation and Skills as an advisor has compiled the damning report and is calling for an investigation by regulators.

The main criticisms and/or complaints were the following practices;


  • Property revaluations without site visits, and mistakes in documentation
  • Property taken over by RBS subsequently sold for a price higher than the bank's own valuation.
  • In one "very clear example" the reasons a business was put into GRG "changes throughout the conversation"
  • One business submitted evidence that in fees alone, their time in GRG had cost them £256,000
  • Small loan breaches forcing companies into much more expensive arrangements, leading to the inevitable collapse.


Business secretary, Vince Cable, has passed the information on to the FCA and PRA to investigate further. The report has been published at the same time as a review (commissioned by RBS) by a former Bank of England’s official, Sir Andrew Large. He looks into issues with SME lending and GRG’s role in the organisation.

RBS have said in a statement, ‘GRG successfully turns around most of the businesses it works with’ but ‘not all businesses that encounter serious financial trouble can be saved.’

Tomlinson believes that small companies are being pushed to the edge, even if they were not struggling to begin with but have faced a few financial problems.

On BBC radio today a hotelier was interviewed who had lost his hotel following a crippling interest rate swap that went bad.  The hotel was sold at a knockdown price to the property investment subsidiary of RBS, West Register.

It is KSA’s view that turning around viable but distressed companies should be the focus of these bank departments, by giving financial support and to help these businesses stay alive, wherever possible.  But if they cannot be kept afloat as is often the case, then any sale of assets forced by administration should not be to the bank’s own companies.

The issue of how finance firms including banks have perhaps exploited struggling but viable businesses has been the topic of much discussion.  See this much publicised issue last year about invoice finance firms.

http://www.telegraph.co.uk/finance/yourbusiness/9495994/Invoice-finance-firms-abuses-costing-taxpayer-millions.html

In addition many banks have assumed that any business that is proposing a company voluntary arrangement (CVA) is such a high risk that they call in the loan.  An agreed CVA does not bind the secured creditor and in many ways put the bank in a better position than previously.  The CVA removes risk of winding up petitions once approved.

The banks still have the ability to enforce their security, but are often don’t give the company the chance to try and trade out of it.

One of our clients asked their MP to question why RBS would not continue to provide a small overdraft to it, once the company had a company voluntary arrangement (CVA) approved by its unsecured creditors.

The RBS Chief Executive of Corporate Banking Chris Sullivan wrote back to Philip Dunne MP, stating that because the company had entered into a CVA it was considered insolvent; “and in line with the Bank’s (sic) policy not to provide banking and debt facilities to insolvent companies, the facilities were withdrawn and proposals for repayment of the debt requested”. Fortunately, we were able to find another funder for the company and it is trading on.

Finally the issue that has yet to be highlighted is the so called “panel system”.  Each bank has its own panel of insolvency practitioners to whom it gives all work.

What is often galling for KSA and other smaller turnaround firms, is that we are often the architects of a viable restructuring plan. The debtor company approaches us for help in cost cutting, financial re-engineering, turnaround and recovery, we set up strategies to do this and work closely with our clients. We then take the business’s rescue plan to the bank’s recovery teams and then we are asked to politely get lost. This is because the banks all operate a so called “panel system”.

Ostensibly this is to ensure “value and quality advice is obtained for the bank” and or the company from regulated approved insolvency firms. In reality the panel firms are doing the company no favours, because they are effectively a bank appointee, whom the company’s board do not want to work with but whom they must pay, because the bank insists upon it.

So to add insult to injury, the directors of a distressed but viable company may engage KSA or other effective insolvency and turnaround firms, to build a workable plan, but as soon as the bank passes the case to GRG or its equivalent across the other banks, the company has a panel firm, whom they have never met, foisted upon the company to drive a recovery.

Recovery for whom? 
Often it’s the bank putting its own interests before the body of all creditors. And giving the resultant insolvency work to their small group of friendly panel firms, before sometimes selling assets to the bank’s own companies.  Clearly secured creditors have fixed charge priorities over other creditors and floating charges to back this up. But the Enterprise Act set out a company rescue culture that is not being supported by West Register and the like.

KSA is not moaning because we want bank work, far from it. Obviously very large insolvency cases such as Lehmans require large insolvency/accountancy practices to cope. But for all other insolvencies we simply want banks to recognise that there are many able recovery and turnaround firms like ours who can work with viable, but struggling companies, to restructure them and their debts. A level playing field is all we ask. We cannot be right or successful in every rescue case, of course, but when we are summarily dismissed and replaced by bank advisors, that is far from a level playing field?

It is our belief that the bank’s insolvency advisory panel system is a closed shop, this is anti-competitive and it is, along with banks recovery teams knocking down viable companies is undermining the UK rescue culture.

Friday, 22 November 2013

Hearts CVA meeting is postponed

Administrators for Hearts football club, BDO, have announced a creditors meeting due to be held today, has been cancelled. Plans to discuss a company voluntary arrangement have been put on hold to allow time to review the situation.

The club is in debt of £28 million and has been in administration for the last five months. Supporters of the club, The Foundation of Hearts, believe that a deal can still be agreed and are supporting administrators for delaying the meeting with creditors. If the club finds a buyer, it could avoid suffering penalties so this extra time (excuse the pun) will give them a chance to consider all options.

A CVA followed by administration can be a suitable solution for distressed clubs and companies, as administrators can protect businesses against aggressive creditors. It also allows enough time for a CVA to be proposed which can take a number of weeks. For more information about how CVAs can work for football clubs, click here.

Thursday, 21 November 2013

London Broncos to go into administration

The super league club plans to go into administration, after it was announced they are on the fixtures list for next year. They have called on lawyers to file a Notice of Intention to appoint administrators for the club. It has seen a number of staff and players leave and is still looking for a venue for home games; currently the Broncos have only five players on their books. It’s also been reported that no one employed by the club has been paid their latest monthly salary.

The administrators are to be brought in to protect the Broncos against creditors and to allow the club some time to work with the Rugby Football League. The aim is to resolve the current issues surrounding the club – there are talks of a move to The Hive with the chairman of Barnet FC, however only if the club carries no debts.

If a club becomes insolvent, regulations state they will lose six competition points. If RFL’s review is accepted by clubs, this number could be doubled.

For more information, visit our page on notice of intention and how it can provide companies some breathing space and protection from aggressive creditor actions.

Wednesday, 20 November 2013

Mywardrobe.com saved by pre-pack administration

Online fashion retailer, Meemi Limited (trading as mywardrobe.com) has been brought out of administration by a pre-pack sale. This result has saved 48 jobs, including a former senior fashion editor at Harpers Bazaar, Carmen Borgonovo.

After on-going poor cashflow and increasing losses, Growth Capital Acquisitions Limited bought the failing business in a pre-pack administration deal. On the 18th November, Leonard Curtis Business Solutions Group were appointed administrators and commented ‘we have completed the sale as a going concern. The outlook for mywardrobe.com is extremely positive’.

The retailer was founded in 2006 by Andrew Curran and has since had a number of cash injections and support to continue trading. However, it eventually ran out of money to continue so administrators were brought in.

Mywardrobe.com is now under a total restructure to accommodate these changes, with the aim to create a successful and profitable business from 2014.

Pre-pack administration

While there is some debate as to whether pre-pack is a suitable insolvency option (as it is often sold back to the directors), it is a very quick process and can get rid of debt, save jobs and allow a business to continue trading.

For more information on pre-pack administration, visit here

Tuesday, 19 November 2013

Will there be a freeze on business rates?

There is increasing pressure from the media, including The Daily Telegraph, to freeze business rates for small shops and companies across the UK, in a bid to help businesses survive. If approved, rates will be frozen from 2015.

Potentially crippling business rates have now overtaken the cost of renting for shops and companies; they are now urging George Osborne to address this situation next month in the Autumn Statement. Companies want business rates to be frozen to allow time to review the current tax system so appropriate changes can be made.

According to reports, rates have increased by 23% in the last five years with a further 3.2% rise planned for next April. This is not reflective of the rents that many retailers pay since rates are not based on current rental levels post credit crunch.  Retailers believe the tax system is ‘outdated’ and needs to be modified in order to improve the overall economy.

There are also talks of rate cuts in Scotland with an announcement expected to be released over the next few days.

We can help businesses who are falling behind with their business rates, have poor cashflow or are simply in need of insolvency advice. If you’re looking to cut costs in your company, read our guide to cost cutting.

The local council’s business rates are in fact an unsecured debt and as such any arrears can be partly written off in a CVA. Call us on 0800 9700539 and speak to one of our CVA experts.

Monday, 18 November 2013

Are zombie firms threatening a productive economy?

The threat of ‘zombie companies’ is in the news yet again, with research by The Adam Smith Institute indicating that 108,000 firms are only just breaking even. The think tank believes these zombie companies stop the productivity of the economy by preventing new, dynamic businesses entering the market. The institute claims that investment and labour should be restructured to support up and coming businesses, to avoid a delay in the UK’s recovery.

Low interest rates and the banks’ priorities are said to be part of the blame for firms standing still with reports further showing a fall in insolvencies. This shows that fewer firms have the opportunity to be restructured and turned around to reach a profitable stage.

We believe that many zombie firms are viable, especially if they have survived the last few years of a struggling economy. The threat of zombie companies can be seen as overstated; with the right management, help and guidance, businesses can become profitable. We advise companies ensure there is effective financial management in place, with a daily or weekly cashflow model providing up-to-date records and procedures.

As turnaround specialists, we can help revaluate and restructure your company to offer on-going solutions and hopefully improve profit margins. Have a look at our directors’ tool kit for businesses - you can download our cashflow template here.



Friday, 15 November 2013

Proposal for energy company Vphase to be placed into a CVA

Earlier this year, BDO was appointed administrator of the alternative energy company Vphase Plc. and Vphase Smart Energy Ltd., both based in Chester. It has now been revealed a CVA proposal has been approved at a creditors meeting. The aim of this is to give unsecured creditors a chance to see return.

Founded in 2004, Vphase has suffered trading problems due to recent government rulings, like the Green Deal and ‘bedroom tax’. As an alternative energy company, they were finding that housing associations and local councils wanted to use less of their services in a bid to cut down energy bills. The impact of the bedroom tax showed that tenants would struggle paying their bills on top of paying for energy efficient services. Vphase tried to continue trading by applying for additional funding, however, this unfortunately failed and administrators were appointed this September.

One of the largest shareholders, Henderson Group Plc., has agreed to the CVA in order to benefit creditors as well as maintain some of the control in the company. Usually CVA's can only be approved at a meeting if 75% of creditors “by value” agree to the proposal. In this case, Henderson had control over the whole process. It has been reported that creditors will receive dividends of 55p in the £1; note that if the CVA had not been accepted, it would only be 36p in the £1.

The company’s assets were sold after the business was placed in administration, however the CVA still needs to be approved by the court in order for debt to be repaid to unsecured creditors. A CVA is a way of exiting the administration to keep the company trading as well as keep costs down. For more information, visit our administration followed by CVA page: http://www.companyrescue.co.uk/company-administration/administration-followed-by-a-cva

A CVA is a powerful tool in the insolvent process and can act as a cost-effective alternative to administration.  By reviewing and restructuring the business, it can turn a company around and improve cashflow as well as stop pressure from VAT and tax. Find out more in our video below, where Keith Steven explains what a CVA is and how it can benefit your situation.

What is a CVA?



If your company is struggling but you believe it is a viable business, we can help! Call us on 0800 970 0539 for free advice on the options available to you.

Thursday, 14 November 2013

Red Architectural goes into administration

Construction company, Red Architectural Ltd., and its sister company, Red Aluminium Ltd. have entered administration. Deloitte have been appointed as administrator and have stated they are only advising staff and customers at this stage.

Based in Cheshire, the 40-year old company provides roofing, glazing and general engineering services. It previously worked on Central Park in Manchester as well as the Westfield shopping centre in Stratford, London; In 2012, their turnover was £29.7 million. Deloitte have indicated Red will trade out existing contracts for a short period of time until there can be a wind down of the company.

For some small construction companies, ever increasing costs can be a struggle if they already have fixed contracts, causing cashflow issues if the company takes on new contracts without being paid. If your firm is having financial problems, please do not hesitate to contact us on 0800 9700593. Do also visit our case studies page on rescuing construction companies.

Wednesday, 13 November 2013

Late payments are a greater threat than insolvency

Claims for late payments in 2013 have almost doubled from the previous year, says Coface UK, the credit insurance firm. Their findings suggest ‘customer insolvency’ and protracted default are beginning to outweigh insolvency claims. In 2012, across 590 clients, just 33% of claims were protracted default, compared to 67% insolvency claims. This year, 60% of claims were due to late payments from customers and 40% were classed as customer insolvency.

These figures represent a decline in firms entering insolvency each year, however, in the current economic climate, many businesses are still fragile. Andrew Share, Director of Information, claims and connections at Coface UK, commented, ‘low interest rates and favourable credit conditions mean that businesses are able to survive, although many are just treading water unable to grow or invest.’

To protect against these credit issues, it is vital firms have credit management procedures in place to limit the risk of late-paying customers. If you need support in restructuring your company or would like more information on insolvency, please visit our page ‘Is your company insolvent?’ or call us on 0800 9700539.

Tuesday, 12 November 2013

KSA Group Insolvency Notice

Alimour Limited Creditors Voluntary Liquidation Notice

Meeting of the Creditors of the above named Company will be held at KSA Group Ltd, Tower 42, Level 7, 25 Old Broad Street, London, EC2N 1HN on 21 November 2013 at 12.15 pm.

See full notice below;

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

British Business Bank’s Investment Programme to provide £125m debt finance to small businesses

Business secretary, Vince Cable, recently announced the Programme’s first £45 million of funding will be allocated to Praesidian Capital Europe and BMS Finance to help provide small businesses secure the finance they need to flourish. Both Praesidian and BMS lend to small and medium sized businesses in the UK and are working with the British Business Bank to give as much support as they can to small businesses across Britain. It’s expected these funds will be released at the beginning of 2014, and will increase in size as businesses grow.

Vince Cable has also proposed plans to provide £1million to the Sector Mentoring Challenge Fund, £10million to the Biotechnology and Biological Science Research Council and to provide support to the Growth Accelerator scheme. They all offer advice and guidance to small business owners to help improve their firms through a number of measures.

With banks reluctant to lend to small businesses and entrepreneurs over the last few years, the Investment Programme launched back in April to tackle financial issues and certain barriers many small firms are faced with. So far, £1.3billion in loans have been arranged by the British Business Bank. The Bank’s total amount of funds in the Investment Programme is £300 million.

For more information and tips on refinancing your company, visit our page on debt finance and refinancing procedures.

Monday, 11 November 2013

Barratts in administration for the third time!


1,000 jobs are are risk as the footwear retailer has entered administration for the third time, with Duff & Phelps appointed as administrator. They admit that redundancies and store closures may be on the cards but as of yet, the future status of the business is unknown.

Unfortunately, an offer of £5 million to support the business was withdrawn on 7th November, leading to the present situation. Partner of Duff & Phelps, Philip Duffy, admitted 'the directors were left with no choice but to appoint administrators.'

Barratts previously went into administration in 2009 and 2011 with 4,000 jobs at risk at the time. This goes to show how the business has tried to downscale over time in the hope to continue selling.

We are not involved in the administration and questions should be directed to Duff & Phelps who are handling the administration.

If you are an employee of the business, and are worried, then please listen to the video below as it will tell you your rights as an employee of a business that is insolvent.  There is a link at the end of the video to the Government website which expands further on what you need to know.




Friday, 8 November 2013

98 UK publishers have closed down over the last year

According to recent figures, there has been a 42% increase in publishers entering insolvency over the last 12 months. The accounting firm, Wilkins Kennedy, reported that 98 publishers went bust this year, compared to 69 last year. 100 year old publisher, The Evans Brothers, was sadly one of the companies affected; they were the original publisher of the famous children’s author, Enid Blyton.

The cause behind the sharp fall in publishers is undoubtedly the impact of eReaders and discounted booksellers like Amazon Marketplace and supermarkets. Consumers now have easy access to ebooks and discounted second-hand books, generally offered at a fraction of the price compared to traditional booksellers. Partner of Wilkins Kennedy, Anthony Cork, commented ‘The rise of Amazon and other ‘discount’ sellers with massive buying power means the pressure on publishers’ margins is now immense’.

Ebook sales reached £216 million in 2012, an increase of 134%. While printed book sales stood at £2.9 billion in the same period, sales actually fell by 1%. Ebooks are caching up rapidly and there is no sign of this changing anytime soon.

It‘s no surprise that the publishing industry is dramatically changing. There will always be ongoing need to restructure businesses to incorporate online media and ensure there is a digital presence.

If your company is struggling, please contact us on 0800 9700539 and speak to one of our insolvency experts.

Thursday, 7 November 2013

Law firm Follett Stock closes and KMPG is appointed liquidator

With the introduction of the Legal Services Act, the SRA are clamping down on firms that pose a risk to clients and are quick to take action if a business is failing. The latest case, Follett Stock, has been closed down by the SRA in order to protect clients and beneficiaries – the firm had offices in London, Bristol, Truro in Cornwall and Exeter. Usually it can take up to three weeks to put a company into liquidation but with SRA’s intervention, immediate action can be taken.

Director of client protection at SRA, Helen Herniman, stated, ‘In cases like these where the firm has become insolvent, we can only intervene once all other options have been exhausted. We have had to intervene on this occasion as there was a clear risk to clients' interests by the firm’s financial difficulties’. As a result of winding up petition ordered against Follett Stock, 30 staff at the London and Truro offices were made redundant.

While law firms are facing a tough time, the best thing a struggling company can do is to consider turnaround options for the business before it is too late and the SRA takes over. If you have cashflow issues, declining sales or your business is falling behind on PAYE and VAT payments, we can help. We act as a ‘fresh pair of eyes’ and can assist with the revaluation and restructure of the company to find a way forward.

If you would like insolvency advice and support, please call us on 0800 9700539 or speak to our expert on legal matters, Grant Jones, on 07815 873370.

Wednesday, 6 November 2013

Britain’s economy is exceeding expectations in 2013

According to a recent survey collected by Markit and the Chartered Institute of Purchasing and Supply, Britain’s economy is expected to show signs of strong growth in the fourth quarter. It has been reported there may be a rise of as much as 1.3 percent in the last few months of 2013. Even more promising, Markit has revealed that the general employment sector is the strongest it’s ever been. These findings have also been supported by the Institute of Chartered Accountants, who expect the same outcome later this year. The EU predicted a growth of just 0.6 percent but now their projections have more than doubled, indicating a positive year ahead. In addition, with UK unemployment figures expected to drop from 7.9% to 7.3% by 2015, it is yet another indicator of a recovering economy.

There are warnings, however, to be vigilant with these survey results, suggesting there is still an ever increasing gap between economy growth and the earning wage. The recent boom in the housing market (created by the Help to Buy mortgage scheme) has also given doubt as to how long this position can be upheld and continue to have a positive impact on economic growth.
Furthermore, if unemployment figures continue to drop, The Bank of England will need to retract this year’s earlier statement and propose a rise in interest rates.

For insolvency market watchers what does this mean? 

Interest rates rises have long been expected to be the catalyst for business failures as many firms are just managing to pay the interest on their loans.  These so called “Zombie Companies” are regarded as a risk to the economy’s sustainability if these firms were unable to pay higher rates.  Thus it pays to not be complacent.


In addition, even in times of booming growth, there is a risk of businesses going into insolvency.
Why is that?   This happens because creditors get tougher when they believe there is a better chance of getting the money back. If a business or ‘zombie company’ cannot survive, then the bank will want to call in the loan if there are profitable assets. In order to lend to growing companies, the bank may well have to stop lending to a failing one which can then lead to insolvency.

If your company is struggling and you need advice or support, please do not hesitate to call us on 0800 9700539

Tuesday, 5 November 2013

October 2013 winding up petitions down on last year.

In October 2013 the number of petitions advertised was just 476 in October 2012 the number was 580 and in October 2011 it was 704.  So the numbers of petitions are still declining

HMRC are now less inclined to send warnings and are moving straight to issuing petitions or using distraint. To see the latest list of companies then go to http://www.winding-up-petition.co.uk/category/latest/.  They do appear to be targeting construction and contracting firms at the moment.

So if HMRC threaten any kind of legal action for the recovery of any tax debts it will either be distraint or a winding up petition.  Distraint can be particularly awkward as they will turn up to your registered office and demand goods be taken away in 7 days if the debt is not paid.  In many cases companies have their registered office at the home and anything belonging to the company, such as car, could be their target.

If you get a visit from HMRC field officer then call us and we will see if we can help.  In many cases it is not too late to save the business.

Call us on 0800 9700539 to find out your options.

Monday, 4 November 2013

KSA Group Insolvency Notices

Parsons Dowd Psychological Liquidation Notice

Meeting of the Creditors of the above named Company will be held at The Holiday Inn Express Newcastle Metro Centre, Clasper Way, Swalwell, Newcastle upon Tyne, NE16 3BE on 15 November 2013 at 11.15 am

See full notice below;


http://www.companyrescue.co.uk/insolvency-notices/parsons-dowd-psychological-limited-in-liquidation


Matchbet Limited Liquidation Notice

Meeting of the Creditors of the above named Company will be held at The offices of KSA Group Ltd, Level 7, Tower 42, 25 Old Broad Street, London, EC2N 1HN on 18 November 2013 at 10.30 am

Full notice below

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

SRA stops law firms taking on new business if no professional indemnity insurance

Professor Grant Jones
Insolvency Lawyer
More than 150 firms are still trying to get professional indemnity insurance (PII) cover a month after the 1 October deadline.  These firms will be prevented from taking on new business by the SRA and ultimately will have to shut down if they cannot get enough cover.   The deadline for obtaining cover is the 29th December 2013

It's been a difficult year for PII renewals with a massive regime change implemented by the SRA aimed at stabilising the market.

The cost of the PII premium was the immediate cause of the demise of Midlands firm Hacking Ashton a meeting of creditors heard. The firm is now in administration.

Experts warned of higher premiums at the bottom of the profession but it will be some time before the true picture is known.

If your firm is unable to obtain insurance then obviously it cannot continue.  However, if your firm has had to pay much higher premiums to practise, and it is putting pressure on cashflow, then there may be solutions. Have a look at our help for lawyers pages on KSA Group.

If you want to talk to our expert on legal matters and insolvency.
Talk to Grant Jones on 07815 873370 or grantj@ksagroup.co.uk

Thursday, 31 October 2013

Business Rescue Case Study Using a CVA to beat Winding up Petition

Our latest business rescue case study is a small victory for a company that was facing an aggressive action by a creditor -  a winding up petition.

A creditor had chased money for some weeks when it then changed tack. it employed the services of a company that advertises itself as a debt and insolvency expert on the web. The tactic used was to demand money in 24 hours or they would issue a winding up petition in the High Court. 

Two days later a petition was served and costs were already at £2,300.

Our first view was that this looked like an "abuse of court process". The courts do not like very aggressive actions, where the debtor can't pay straight away but can pay over time.

We utilised the services of Lexlaw to get the  petition withdrawn, but payments were made to the creditor over time. Meanwhile we assessed the company's debt issues and because the HMRC liabilities were too high to service, we  decided with the board of directors that a CVA was the right solution.

This was put together for this services firm in a couple of weeks.  The same so called "advisor" then issued another winding up petition on behalf of another creditor, before the creditors meeting to decide whether to accept the CVA or not.  Once again, we made sure the matter was dealt with quickly and professionally by Lexlaw.

The CVA was approved by the majority of creditors, the petition was withdrawn and no costs were paid to the advisor or his client.

Moral of the story? If you have a letter threatening very aggressive action on behalf of a creditor get fast expert advice from KSA Group or Lexlaw.

Wednesday, 30 October 2013

Latest Business Rescue Case Study of Plant Hire business in Scotland

Business Rescue Case Study. Small plant services company rescued by a Company Voluntary Arrangement (CVA) 

Following an initial conversation with KSA, our Regional Manager for Scotland and Northern Ireland, Derek Robinson, met with the company director at their plant near Glasgow to discuss, in detail, the problems the company was facing. The company had a turnover of £150k, which was rising slightly on previous years. 

The company was encountering financial difficulties because the director being the only employee of the company was responsible for all operational activities as well as administration of the company’s financial and corporate affairs.

Read the case study below

http://www.companyrescue.co.uk/case-studies/cva-case-studies/plant-hire-company-in-glasgow-saved-by-cva

Tuesday, 29 October 2013

Blockbuster to go into administration again!

10 months on and Blockbuster UK will be put into administration by its latest owner, Gordon Brothers Europe, following an intention to appoint administrators filing.   They said that the turnaround plan had failed. It seems that the problems stem from the fact that they were unable to agree a proper digital licensing deal with the US parent company, problems agreeing rental terms with the landlords, and disappointing trading.

Perhaps the Landlords were less optimistic of a recovery than the owners and were seeking guarantees from the parent company. In addition, it has been reported that they are taking a harder line against companies that wish to restructure by opposing CVAs and pre packs.  However it should be remembered that the insolvency laws have not changed and landlords position is much as it was when dealing with a struggling company.

The company has already been trimmed from employing 4200 people to 2000 following the last administration.  The collapse of the business is response ultimately due to the changing habits of buying entertainment which have increasingly switched to online.

Many of the existing outlets are to remain open while a buyer is sought.  There must be some value for the brand if it were to move online?  But it is becoming a crowded market place with Blinkbox, BT, Virgin media, Sky, Lovefilm, Netflix, and others all selling and renting movies online

We are not involved in the administration but according to reports in the FT, Moorfields are expected to be appointed.


If you are an employee of the business and are worried, then please listen to the video below as it will tell you your rights as an employee of a business that is insolvent.  There is a link at the end of the video to the Government website which expands further on what you need to know.




AudioGo in administration move

Bath-based Audio book publisher, AudioGO, has confirmed that it has filed an intention to appoint administrators with BDO named as the likely administrator. The firm employs some 100 staff.

The managing director, Mike Bowen, and the financial director, Bradley Whittock, have both left following the cashflow problems.

AudioGO was created in 2010, when private investors purchased BBC AudioGO.

The company had been doing well and it posted profits of £2.4 million on marginally reduced sales of £15.6 million to Companies House last year, but its cash in the bank dropped from £1.9 million in 2011 to £346,142 in 2012.

AudioGO has 5 studios, offices and a mail order store in Bath.  Its fall in sales has been blamed on the ever falling prices of digital media.   That said, the audible.co.uk service that has been launched by Amazon has meant increased competition in this area.

The firm is expected to announce redundancies on Thursday as a potential deal for the business to be bought has collapsed.

If you are a worried employee of the business then have a look at our page on help for employees which explains your rights.




Friday, 25 October 2013

GDP figures show strong growth

It seems like only yesterday when we were talking about triple dips and the collapse of the Eurozone.  Well, the latest statistics from the Office of National Statistics (ONS) shows that the economy grew by 0.8% in the 3rd Quarter of 2013.

To further underline the strong performance the figures actually indicate that the economy is 1.5% ahead of where it was this time last year.  This is relevant as that was the period during the Olympics.  Mind you lots of people stayed at home and watched the games rather than going out and spending money!

Construction has shown strong growth but it is still 12.5% below the levels seen at the peak.  Housebuilders have been boosted by the Help to Buy Scheme.  Meanwhile the service sector, often seen as the powerhouse of the UK economy is now above its levels at the peak by 0.6%

Other indicators have pointed to an improving picture.  The Markit's purchasing indexes have shown an improvement, unemployment has been falling, retail sales have been improving and the insolvency rate has been falling.

Now wait, that last one, the insolvency rate, is an interesting one.  Historically, if the economy improves after a recession then the insolvency rate actually rises....

Why is that?  

Simply because creditors get tougher when they think there is a better chance of getting the money and banks look to call in loans when there is a market for assets if the business cannot survive.  Also if they want to lend to a growing company they will need to stop lending to a failing one.    There is some evidence of this occurring recently as Scotland's insovlency rate is beginning to increase and there have been a few high profile failures recently such as WR Refrigeration.




Thursday, 24 October 2013

Cabling company Murphy in administration

Murphy Limited, the 56 year old cabling company that lays cables for the utility companies, has gone into administration with the loss of 293 jobs.  A few staff are staying on to help the administrators at Deloitte to wind down the company.  The company mustn't be confused with  J Murphy & Sons which is also in construction and trades as the Murphy Group.

Murphy Limited has a head office in Tottenham Hale, and regional offices in Manchester, Penrith, Preston, Sheffield, Ashford, Stanlow and Bradford.

Deloitte joint administrator and restructuring services partner Nick Edwards said: “The company has suffered a prolonged period of difficult trading, which has resulted in it being unable to meet its financial obligations."   The administrators went on to say that they are proceeding with an orderly wind down and that they will seek to sell the remaining business and assets to maximise returns for creditors.

The last reported turnover in 2011 was £62m and they had £374k of unsatisfied CCJs.  The fact that the current financial accounts have not been filed is often a warning sign that the business is facing difficulty


We are not involved in the administration and questions should be directed to Deloitte who are handling the administration.

If you are an employee of the business and are worried, then please listen to the video below as it will tell you your rights as an employee of a business that is insolvent.  There is a link at the end of the video to the Government website which expands further on what you need to know.




Wednesday, 23 October 2013

Foreign tax authorities can collect liabilities via HMRC

Does your company trade remotely into EU countries.  Are you aware of the tax thresholds within each individual country? Whether you are aware or not, if you exceed those thresholds you may have tax liabilities for which you are unprepared!  In which case you may be subject to recovery action under EU law!

Under EU law a member state must make all reasonable attempts to recovery those debts with the individual company or body. However, if all attempts are ineffectual the tax authority from the ‘creditor’ state may apply to the national tax authority of the state where the debtor is registered to recover those monies under the registered states laws.  This action may lead to distraint action, where assets are seized to satisfy the debt, or may even lead to a Winding up Petition being issued and the company’s bank being frozen.

The EU directive under which action may take place is Mutual Assistance Recovery Directive 2010 – 24 – EU often abbreviated to MARD.

If your company is currently encountering cashflow issues and is struggling to pay current liabilities an unexpected ‘bill’ of this nature may tip the scales in the wrong direction.

Read our case study  http://www.companyrescue.co.uk/case-studies/cva-case-studies/south-east-internet-retailing-company-rescued which demonstrates how KSA assisted a company in this exact position restructure its debts and remain trading utilising a CVA (Company Voluntary Arrangement) which including debts owed to an EU member state!

WR Refrigeration in administration

Leicester-based, fridge repair and servicing firm WR Refrigeration,  has gone into administration putting 600 jobs at risk.  This was precipitated by a winding up petition from HMRC.

The administrators have said that the business faces "real risk of imminent closure".  The company had been seeking additional funding, especially following the petition, but this had not been successful.


We are not involved in the administration and questions should be directed to PWC who are handling the administration.

If you are an employee of the business, and are worried, then please listen to the video below as it will tell you your rights as an employee of a business that is insolvent.  There is a link at the end of the video to the Government website which expands further on what you need to know.




Martyn Leisure Breaks in administration

Martyn Leisure Breaks, which owns three Dorset hotels, the Russell Hotel, the Prince Regent Hotel in Weymouth and the Sherborne Hotel in Sherborne has gone into administration leaving 300 jobs in the balance.

A statement on the company's website said: “Peter Holder, Nick Cropper and Anne O'Keefe were appointed Joint Administrators of Hollybush Hotels Limited (the Company) on October 11 2013.


“The affairs, business and property of the company are being managed by the joint administrators who act as agents of the Company and without personal liability.

The hotels are are high profile in their respective towns with waterfront views.  The administrators have said that they will honour all bookings and deposits taken.

They have also said that the hotels are up for sale and they are expecting a high level of interest.

We are not involved in the administration and questions should be directed to Zolfo Cooper LLP who are handling the administration

If you are an employee of the business and are worried, then please listen to the video below as it will tell you your rights as an employee of a business that is insolvent.  There is a link at the end of the video to the Government website which expands further on what you need to know.




 

Tuesday, 22 October 2013

Insolvencies in the West Midlands show unexpected rise.

In Experian's latest Insolvency Index they have shown an increase in the number of insolvencies amongst West Midlands businesses.  This is somewhat surprising as the national figure is showing a decrease. Nationally the picture is 0.07% whereas in the West Midlands the figure is 0.09% which is up from 0.07% in September last year.

There were 152 insolvencies in the West Midlands in September compared to 111 last year. That said one should not draw too many conclusions from one month's figures.  It is possible that HMRC have started to be a bit more aggressive for this month or the banks have had a look at the lend in the region and decided to call the loan in.  There is some anecdotal evidence that the banks are more confident of higher asset values of failed companies and so are prepared to pull the plug.

George Davis and Russell Mallen, our regional managers in the Midlands had the following comments.


Russell Mallen
The West Midlands area is showing signs of recovery, particularly in the manufacturing sector. Retail is still slow with many empty units on the High Street and shopping centres, but I feel this will start to improve over the next 12 months. Many companies I see have lingering debt with HMRC but there is a reluctance from HMRC to take action against them. I have found that as long as the company is compliant, a simple phone call will usually secure a time to pay deal regardless whether the company has defaulted on a previous arrangement. However, this shouldn't be read as gospel, as HMRC are inconsistent in the way they deal with arrangements and each department handles requests differently.  

I am confident that we are turning a corner in the West Midlands and confidence and investment will again return to all sectors. Nevertheless, the banks will need to be more active is supporting growing businesses. Hopefully, we are turning a corner."


George E Davis
"I cover both the East Midlands and the North West for KSA, and have recently been talking to a number of construction businesses.  These companies both large and small, operate in different parts of the construction industry, and, as ever, no two sets of problems are the same. However, there is at least some commonality, most of it stemming from the fact that as things pick up an already desperately tight cash position suddenly becomes worse."
Jobs that were quoted at rock bottom prices, often some time ago and on extended payment terms, are now being won. However, the demand for materials and labour is rising, and in some cases prices are increasing, leaving already stretched businesses paying more, and being paid later. With traditional sources of working capital still nothing like they were in the good old days, the pressure on already struggling businesses just increases."

Monday, 21 October 2013

Charles Gee Group in administration

Charles Gee Group, the transport business, has appointed administrators to try and save jobs and sell the business.

Charles Gee is involved in the transportation of the wings for Airbus planes which are manufactured in the UK and then taking them overseas to the assembly lines in other European countries.

Geoff Rowley, Phil Armstrong and Andrew Sheridan, partners of FRP Advisory have been appointed as joint administrators of the ailing business.

The Group has a long list of subsidiaries and the administrators are talking to them to try and see what the viability of the business of is and to try and keep it trading while they seek a buyer.


The group has 12 regional centres throughout the country, stretching from Clevedon and Bridgewater in the west country to Birkenhead and Hull in the north and Aylesford in Kent.

If you are an employee of the company and are worried then watch the video from KSA Group below that explains your rights and you can phone the DBIS number at the end for for further help.

We are not involved in the administration but have released this video for the benefit of employees of insolvent businesses in general.


 

Southern Based Roofing Company Saved by CVA

The directors of the company approached KSA Group after reading our website www.companyrescue.co.uk as their business was under distress.   Turnover to 30th April 2012 was £1.1m which was a fall of £122k compared with the previous year, gross profit fell proportionally.

The company also encountered financial difficulties due to:
  • A combination of historic bad debt write-offs
  • Increased client price sensitivity
  • The economic downturn
  • Poor management practices.
  • HMRC levied distraint against company assets (Walking Possession) for an unpaid VAT liability

Read the case study below to see how we saved the business;


http://www.companyrescue.co.uk/case-studies/cva-case-studies/southern-based-roofing-company-rescued-by-a-cva

Friday, 18 October 2013

SRA Chief says that law firms must adapt or fail.

The executive director of the Solicitors Regulation Authority (SRA), Richard Collins, talking at the SRA Conference in Birmingham has warned that many firms of all sizes are vulnerable to failure unless they change their businesses.

This warning comes soon after the London Firm, Manches, became the latest top 200 firm to fail. Penningtons acquired the firm in a pre pack deal which at least ensured the 265 jobs were saved.   Of course the problem will be that some lenders are going to be more reluctant to lend to lawyers who have in the past been regarded as pretty safe investments.

Collins said; ‘We’re seeing firms people always felt would have been safe but they’re exiting the market in a disorderly way in a moment of crisis,’ he said. ‘It’s even more important for firms to have robust plans about what is the future of the firm. This is an issue affecting firms in the top 100 - it’s no longer inevitable firms of a particular size will survive, the market will not let them.’

The SRA chief executive, Anthony Townend said that a pre-pack administration is a preferred option to intervening in the case of financial distress.

What about a CVA??  This can also help a law firm restructure and survive.  For more information on how KSA Group can help with pre pack administrations or CVAs refer to our help for lawyers pages.  which contains case studies and lots of information.

Case study of an Internet retailer based in the South East with a German twist!

This latest case study is interesting as there was an amount owed to the German Tax Authorities which, under EU law, they requested that HMRC collect on their behalf.  However, this amount was still bound by the CVA arrangement.  Result was a dividend of 47p in the £1 and 5 jobs saved.

Read the full case study below

http://www.companyrescue.co.uk/case-studies/cva-case-studies/south-east-internet-retailing-company-rescued

Northern Ireland Agricultural Supplier Rescued

Following an initial conversation with KSA, our Regional Manager for Scotland and Northern Ireland, Derek Robinson, met with the company director at their plant in Northern Ireland to discuss, in detail, the problems the company was facing.

The company had a turnover of £760k, which was a significant drop of £394k on the previous year, although the director was confident of a recovery to the higher level, providing the company could survive.

The company encountered financial difficulties because the company’s market, the livestock farming industry, had been adversely affected by a number of factors; A drop in prices as a result of cheaper competitive product being available from the Republic of Ireland, and inordinately high livestock feed prices caused by adverse weather conditions. This depressed commodity price coupled with unusually high direct costs led to customers delaying orders for equipment to make their operation more efficient and effective.

Read our case study (link below) to find out how KSA Group rescued this business:


http://www.companyrescue.co.uk/case-studies/cva-case-studies/agricultural-suppliers-in-northern-ireland-case-study


Thursday, 17 October 2013

Wet 'N' Wild Waterpark in administration

The Wet 'N' Wild waterpark in North Shields has gone into administration with the loss of 69 jobs as Administrators at PwC try and sell the assets.

"Despite operating profitably for much of the year the business faced liquidity issues over the forthcoming months," said administrator Toby Underwood. "The directors therefore had no option but to place the company into administration.

The timing of the administration is no doubt due to the forthcoming winter period when there will be little or no cash coming into the business.  Rents need to paid and maintenance carried out.

The administrators have stated that anyone interested in the business or the assets need to get in touch with them as quickly as possible.

When it opened the park was the biggest of its kind in the UK.

Wednesday, 16 October 2013

Taxi firm director is disqualified for 8 years

The director of a Liverpool taxi firm called Yorkspeed Ltd, otherwise known as City Kabs has been banned for 8 years following an investigation by the Insolvency Service.

The financial records were unable to explain large cash withdrawals of £700k from the business, £40k of bank transfers to himself and family members, and thousand of pounds worth of cheques.

Robert Clarke, head of insolvent investigations north, at The Insolvency Service, said: “Directors who operate cash-based businesses have to maintain sufficient records to explain where the money has gone, and following insolvency make sure that such records are delivered up for scrutiny by the relevant bodies.

“By failing to do this, HM Revenue & Customs cannot be sure that all funds received by the company were used for legitimate purposes."

In the last 2 years of trading, the company ran up debts with HMRC which resulted in a debt of more than £225,000.

The threat of disqualification is there if a business becomes insolvent simply because the books and records of the company are scrutinized in an attempt to recover money for creditors. If you have taken money out and not paid it back to the company or have traded knowing full well that the company could not pay its debts then you run a big risk.

So, if in doubt, contact the professionals and consider stopping trading immediately to ensure that you do not make the creditors position worse.

Recruitment company CVA pays out 50p in the £1

KSA Group rescued a recruitment company where the company in the CVA was repaying 50p in the £1 of all unsecured debts.

 HMRC were the main creditor at c.£100k and KSA brought in new factoring facilities as the bank withdrew the finance available to the firm. If you want to know more about funding see our finance page

Read the full case study below;

http://www.companyrescue.co.uk/case-studies/cva-case-studies/recruitment-company-saved-repays-50p-in-the-pound-in-a-cva

Tuesday, 15 October 2013

Negotiation with HMRC over Tax Arrears

When companies face cashflow crises, management is struggling to cope and failure is imminent, often the major creditor pressure is from one source – HMRC.

 Since 2003 the HMRC is NOT a preferential creditor and does not rank ahead of the bank. Actually, the HMRC debt is unsecured and ranks alongside trade creditors. But this often doesn’t matter to a worried bank.

Banks worry about the pressure that HMRC can bring to bear. Bailiffs, distraint, winding up petitions. These can precipitate the failure of the company and bankers worry about their ability to control this. What happens if their client gets a winding up petition from HMRC?

KSA Group are experts at negotiating with HMRC.  HMRC are "sophisticated creditors" in that they know all the procedures and rules.  You therefore need professional advice to make sure of the best outcome to save your business and stop the bank closing it down.

Talk to us on 0800 9700539 for advice.

Monday, 14 October 2013

KSA Group Can Rescue Companies in Northern Ireland!

Derek Robinson, our regional manager for Northern Ireland, has been busy over the Irish Sea and has helped a number of companies.

See his latest case study of how we rescued a building company that had built up some £200k+ of unsecured creditors.


http://www.companyrescue.co.uk/case-studies/cva-case-studies/northern-ireland-company-saved-by-a-cva

Remember, a CVA can be used in any part of the UK. It is an established company rescue mechanism promoted by the Government!

Ask us how it can help your company?  Call on 0800 9700530 to find out how
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