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Thursday, 27 June 2013

A testimonial from a happy client whose company has entered a company voluntary arrangement

The creditors meetings are often a source of worry for the directors, but in practice as long as the creditors have been properly handled and informed in a professional way they rarely turn up to the meeting.  They can still vote by proxy.

After the meeting, the company was officially in a Company Voluntary Arrangement and he sent us the following the email;

Dear Keith

Just a quick note to say a big thank you to all the staff at KSA, our CVA was passed today by creditors voting in an overwhelming number including HMRC to accept the proposal as prepared by KSA.

The road to reach today’s conclusion has been bumpy, but at each stage your team has supported and guided us through the issues and we have reached a very satisfactory outcome to the benefit of customers, staff, all creditors and shareholders.

Please pass on my sincere thanks to everyone at KSA.

Kind regards  

Wednesday, 26 June 2013

Ark, Dwell, ModelZone and Internacionale all in administration

This week has been a bad one for retailers as a number have gone into administration or have filed notice of intention to appoint.

The casualties this week have been Ark, Dwell, Internacionale, and ModelZone.

The recent rent quarter day is likely to have been the catalyst although business rates have been blamed this time round as well.

Quarterly rent may be enshrined in the lease agreement but many landlords are open to negotiation and are often willing to accept monthly rental payments with little or no penalties.  They are most likely to have the right to ask for interest on the overdue rent as per the lease but this might make the difference between the business surviving or not.

It is not just retailers that are affected but anyone whose business depends heavily on their property -   Retailers rents are normally a higher proportion of their overheads than other businesses hence they are more vulnerable.

If as a business you feel that your rent is overstretching you then it may be possible to ask for a rent concession.  This is more common practice in shopping centres where the landlord owns the whole centre and helping one retailer indirectly helps the others.   The last thing a landlord wants is empty shops which will detract from the centre as a whole.  If you do ask for a concession make sure you have up to date accounts and proof of your difficulties.

To read more about the recent administrations see our news pages below;

Friday, 21 June 2013

RNE Consultancies Limited in Liquidation

KSA Group Insolvency Notices

Meeting of the Creditors of the RNE Consultancies Limited above named will be held at the offices of KSA Group Ltd, Tower 42, Level 7, 25 Old Broad Street, London, EC2N 1HN on 9 July 2013 at 11.15 am

Read the full notice below

Read more about liquidation  on  the what is liquidation page of our site.

Thursday, 20 June 2013

Law firms in financial difficulty according to the SRA

The Law Gazette recently published an article outlining that the Solicitors Regulatory Authority (SRA) had done research that showed that more than 30 of the top 200 UK law firms are in serious financial difficulty.

The regulator is in what it calls ‘intense engagement’ with 160 firms at risk of failure, of which eight are in immediate danger.

Legal firms have had various challenges recently most importantly from the new Legal Services Act (LSA) that allows non solicitors to own legal practices.  The LSA will no doubt lead to increased competition especially for small high street firms.

Traditionally law firms have not been particularly good at collecting cash in as much of the work is in progress and a focus on billable hours sometimes means that debtors do build up.

So if your practice is, or you are

  • Experiencing cashflow problems?
  • You are concerned about paying your professional indemnity premiums?
  • worried that insolvency may affect your ability to practice in the future?
  • You don’t want to risk the SRA Intervention
If so then you should read our pages on help for lawyers with cashflow problems

We are currently helping a law firm with 20 partners

  • We have negotiated a standstill with the bank £4m (no capital or interest payments)
  • We have negotiated a time to pay their tax with HMRC (£1m)
  • We helped them exit a property
  • But we built and used a full statement of affairs to show the outcomes for all creditors,  if we did use formal insolvency.  This was particularly helpful in the negotiations.

Wednesday, 19 June 2013

Mel Davison Construction has gone into administration

Mel Davison Construction which  carried out repair work for the Northern Ireland Housing Executive (NIHE) has gone into administration.  The firm cited financial pressures for its demise.

The Belfast and Portadown-based company currently employs around 150 staff.

On Monday, around 50 workers staged a sit-in at the premises on the Shankill Road, Belfast, after they were told they were to lose their jobs.

It is understood the appointed administrators are now in discussions with the NIHE to see if the service can be maintained to the NIHE's tenants and to minimise any disruption to contracts.

Mel Davison Construction, which was established in the 1980s, carried out response maintenance work for the NIHE in Craigavon, Lisburn, south Belfast and Shankill.

Tuesday, 18 June 2013

HMRC give more time for employers to comply with RTI

Again the HMRC have given employers with less than 50 employees more time to get used to the new Real Time Information (RTI) reporting for PAYE.  If your firm does not pay its staff monthly but weekly, or every 4 weeks then you do not have to report in real time until April 2014.  This extends the previous deadline which was set for October 2013. Currently such companies are just reporting at the end of the month.

The system has come in for some criticism but with over 1.4m employees having their PAYE details reported  and paid online it has been generally regarded as a success.  The figure means more than 83pc of small to medium-sized companies and more than a million micro employers are now reporting PAYE in real time.

Given the Government's past record on big computer projects this is no mean feat.  However, when it is linked up with the universal credit that will be a bigger challenge.

For distressed businesses the implications of Real Time reporting has meant that they can no longer use debts to HMRC as working capital hoping to be in a position to pay back the PAYE at the year end.

If you cannot pay VAT or PAYE then get in touch.

Consumer Price Index rises to 2.7%

Looks like inflation has come back a little this month following the unexpected fall in April.  The rate is now at 2.7% rising from 2.4% last month.  The biggest contributor to the increase was from fuel and clothing costs.  Food has shown some falls in prices,  can't see it myself as food seems to be ever more expensive in the supermarkets!

The Bank of England expects inflation to remain above its 2% target until early 2016.  Looks like the new Governor of the Bank of England will have a lot to think about.  It seems like only a few months ago that they were talking about negative interest rates!

In other news...

Hearts FC have finally gone into administration.  This has been on the cards for along time following the serving of a winding up petition a few months ago.  The complicated ownership structure of the club has hindered any rescue plan.

The Edinburgh club have debts of £25m - owed to Lithuanian-based companies formerly owned by Vladimir Romanov - who are themselves facing insolvency.

KPMG are handling the case.

Monday, 17 June 2013

KSA Group Liquidation Notices

Cadre Design Services 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 28 June 2013 at 12.30 pm

For the full notice see below;

Ivantage Limited

Meeting of the Creditors of the above named Company will be held at The Hubworking Centre, 5 Wormwood Street, London, EC2M 1RQ on 28 June 2013 at 11.15 am

For full notice see the link below

Ivantage Limited Liquidation Notice

Visit our liquidation site for more information

Friday, 14 June 2013

Software Business exits CVA early

Southern Based Website & Software Design company

The company accountant contacted KSA Group as he was concerned that the business was in serious financial difficulty and a meeting was held at the company’s premises. KSA was appointed to assist the company

The company encountered compounding financial difficulties due to;

  • Lower than forecast sales
  • High overheads
  • A substantial investment in a  new CRM programme that was not quite market ready
  • A small number of bad debts from insolvent clients and 
  • Incomplete projects.

What was the situation with the creditors?

Thursday, 13 June 2013

Need to make redundancies but can't afford to??

If you need to make redundancies in your firm but are afraid that you cannot meet the cost then you can get a loan from the redundancies payments office (RPO).  This will be available if the company can show that it will save jobs in the long term but it cannot afford it the payments due to cashflow problems.

For more information read our new page on how struggling companies can afford to make redundancies

Wednesday, 12 June 2013

Lenders Reject Punch Taverns latest restructuring plan

It has emerged today that the main group of lenders that are represented by the Association of British Insurers (ABI ) have rejected Punch Taverns's latest restructuring plan as being "too vague".

As previously reported by Company Rescue on our blog in May , it was apparent then that the talks were not going well.  The chairman has said that if the restructuring plan is not accepted then Punch could go into administration.  If that were the case it would be the largest business since January to fall into the hands of administrators.  The business has over 4000 pubs and employs thousands of staff.

The main problems facing Punch is that they went on a huge acquisition spree over recent years and at one stage had 10,000 pubs.  The company is carrying £2.4bn in debt...

Punch recorded a pre-tax loss of £16.7 million in the six months to the end of March.   Like so many others pubs have found themselves under increasing pressure from supermarket discounting, taxes and low consumer spending.

If your pub business is struggling why not read our guide on how to rescue your pub, hotel or restaurant business

Dwell almost in administration

According to reports in the papers today, Dwell, the 24-store furniture chain, is expected to announce shortly that it will file a notice of intention to appoint accountants Duff & Phelps as administrators. Furniture and the DIY market has been hit by the historically low levels of housing activity and the threat of online retailers.

Private equity house Key Capital Partners invested £5m into Dwell in 2010. Barclays are the firms bankers

Dwell had been looking at various options such as a sale of the business but no buyer has been found.  They hired Argyll Partners to carry out the investigations.

Dwell had losses of £675,320 to January 2012. But revenues rose 3pc to £34.5m. As we know thoug,h revenues are not all important.  It is cashflow that is king!

Tuesday, 11 June 2013

Caithness Stone Industries in administration

Caithness Stone Industries Ltd, founded in 1999 and based in Spittal, which operated a number of quarries and also processed and despatched the finished stone has gone into administration.  It is not known at this stage what the debts were but the administrators at RSM Tenon have said that rising costs and cashflow problems were to blame. The company had a turnover of just over £3m in 2012.

Apart from supplying Caithness Stone to many contemporary building projects, the firm has provided stone for a number of hotels, visitor centres and public buildings.

The business had also diversified into supplying the residential market by launching a range of new stone-based products for kitchen, bathrooms, gardens and furniture.

Mr Fraser of RSM Tenon said: "Caithness Stone Industries had a high profile as one of the leading suppliers and processors of Caithness Stone.

"The company invested heavily in new technology in order to improve the efficiency of extraction and processing, and successfully diversified into new residential markets.

"We will now undertake a thorough review of Caithness Stone Industries Ltd, the results of which will determine the next steps for the administration."

Monday, 10 June 2013

Companies in Liquidation

What happens when a company goes into liquidation?  Here are five simple steps

Step 1 - Find a Liquidator.

Step 2 - Pass details of any company assets over to the proposed liquidator, and valuers may get
these valued. This will independently set the value of the assets for going to auction, or you may
wish to buy them.

Step 3 – Tell the liquidator who money is owed to.  The liquidator will write to them all to let
them know what’s happening and tell them that a creditors meeting will be held. This will quickly
remove creditor pressure and creditors will talk to the liquidator instead.

Step 4 – hand over all company information and books and records. The liquidator will use this to prepare a report to the creditors

Step 5 – A company director needs to "chair the meeting of creditors". In actual fact the liquidator will
run the meeting but you or one of the directors must attend it by law. The meeting of creditors is
usually a simple short meeting with no one attending.

Is that it?

Well, as far as the directors of the company are concerned, yes.  But the liquidator's job is not done.  They will need to collect in all the cash and actually "liquidate" the assets.  This means that stock will need to be sold,  debts chased up, books and records stored and money distributed.  This all tends to happen after the creditors meeting.

If you are interested in purchasing some of the assets of a liquidated company you can go to the auctions or approach surveyors who work with IPs.  We have a page on our website that lists companies that have gone into liquidation but you will need to subscribe to the provider to get the actual name of the company or the IP handling

Thursday, 6 June 2013

Directors duties in insolvent companies

In law, if a company is insolvent then the directors have a duty to act in the best interest of the creditors and not  the shareholders.  As such, the first thing to establish is whether the company is insolvent.  We have an online insolvency test to help you establish this.   If your business is insolvent then you must act to ensure that you do not make the creditors situation worse.  So if you are in a hole with tax arrears, piling up debts to trade creditors then stop digging and take advice!

Some directors are guilty of wilfully piling up debt with no hope of paying back creditors and by doing this they are risking an action for wrongful trading that can lead to disqualification and personal liability for the company's debts.

Please read our page on duties of directors of insolvent companies to help you understand your position and your options.

Wednesday, 5 June 2013

Truro City FC agree a CVA

Truro City FC have agreed a deal with creditors by reaching a Company Voluntary Arrangement

In a statement released yesterday, club chairman Peter Masters said: "I am delighted to announce that the CVA has been officially approved this afternoon.

The agreement should pave the way for them to join the Southern Premier League next season.

Club Chairman Peter Masters said; "It’s good day for the city of Truro, and the county of Cornwall as a whole. I am sure all at Truro City Football Club would wish me to convey their thanks to all the creditors who have written of their debt incurred by the previous regime to make this day possible."

The deal means that the debt has gone from £4.5 million down to around £80,000.  This highlights what a powerful technique the CVA is and it isn't just for football clubs.

Truro City are also expected to shortly announce the appointment of a new management team following the departure of Lee Hodges at the end of last season.

Monday, 3 June 2013

Insolvency rate stays very low at 0.08%

The latest research from Experian shows continued low levels of insolvency, with Scotland particularly seeing an improving picture.  Insolvency rates are at more than half the levels seen in 2012.  Only 43 businesses became insolvent in April compared to 103.  This represents a level of just 0.03%

The UK average level is 0.08%.  Key points in the statistics are as follows;

Companies with 500+ employees saw the insolvency rate fall from 0.12% to 0.06% in the month of April when compared to March.  However it fell from 0.08% when compared to April last year.  This still represents a substantial fall.  

Smaller businesses with 1-2 employees remained at the continued low rate of 0.06%

Slight falls were evident in medium sized businesses with a rate of 0.14% down from 0.16%

Regionally the North West has shown the most improvement with the levels of insolvency down from 0.12% to 0.09%

This is all good news for the economy and jobs.  So what is behind the improvement?  Most analysts agree that much of it is due to the banks being reluctant to call in debts, and HMRC not adopting a tough stance against businesses that are not paying VAT and PAYE.  There has been much change at HMRC with the introduction of RTI so time will tell if they have improved on collecting money in.

The economy does appear to be improving with increased optimism and a rise in house prices.  It will be interesting to see what the retail sales statistics show this time round.

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