Friday, 26 April 2013
AGS Home Improvement in administration but buyers are waiting
Newton Abbot-based AGS Home Improvement Ltd, which was one of South Devon's biggest employers, and was established for almost 40 years, has gone into administration with a loss of around 125 jobs.
The company specialises in the supply and installation of aluminium and PVCu windows, doors and conservatories in South West.
The insolvency practitioner, Mark Bowen of MB Insolvency is now looking to sell parts of the business. He also said; "We had to make the employees redundant as we couldn't pay them while in administration. Purchasers of the business will help resecure the employment for a considerable amount of former workers."
Mr Bowen added that buyers should be secured on Monday.
This all looks quite positive if the employees can be re-employed. So what has happened? The administrator had to make the employees all redundant as he cannot run the business at a loss. However administration is a powerful rescue technique and so all onerous contracts can be terminated and debts, including secured debts can be compromised. If a buyer can be found then the business will be rescued.
Why not a pre pack?
Well, an administration sale should be able to get around the TUPE issues, which are where the employees contracts are transferred to the new company so any redundancy costs have to be met by the buyer. One still needs to be careful as if it can be shown that the new buyer agreed to just wait until the company went into administration in order to pick up the business at a much reduced price then TUPE could apply. The law is still very fluid on these points so before going into administration and thinking of selling the assets it is essential that you seek legal advice
Blogged by Robert Moore