Please visit http://www.companyrescue.co.uk/ for confidential help and insolvency advice or email keiths@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We utilised the services of Lexlaw to get the  petition withdrawn, but payments were made to the creditor over time.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The CVA was approved by the majority of creditors, the petition was withdrawn and no costs were paid to the advisor or his client.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

Heaven Nutfield limited Liquidation Notice

Meeting of the Creditors of the above named Company will be held at The Hubworking Centre, 5 Wormwood Street, London, EC2M 1RQ on 29 October 2013 at 12.45 pm

To read the full notice see below;

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

To read other notices of companies that KSA Group have liquidated then read our Insolvency Notices pages

Friday, 11 October 2013

Latest Liquidation Case Studies

We have liquidated companies that are no longer viable. The directors may have sunk money into the business and have not acheived a return and meanwhile creditors build up.  When this happens it is advisable to stop trading and prevent the situation from going from bad to worse or losing more money for yourself and your creditors.

Please see our latest liquidation case studies

http://www.companyrescue.co.uk/case-studies/liquidation-case-studies/liquidation-case-study-financial-consultancy

http://www.companyrescue.co.uk/case-studies/liquidation-case-studies/liquidation-case-study-of-a-printer-cartridge-franchise




Baumatic in administration

Baumatic, the Reading-based appliance manufacturer, has confirmed that it is in administration.

A statement on the company's website says: “On 8 October 2013 David Dunkley and Richard Lewis of Grant Thornton UK LLP were appointed joint administrators of Baumatic Ltd and now manage the affairs, business and property of Baumatic Ltd.”

Baumatic entered the UK market in 1992 and its international HQ was in Prague. In its last set of accounts published in March 2012, it turned over £71.6m, made a pre-tax profit of £217,585

A spokesperson for the administrator has been reported saying that it was in talks with prospective buyers of the business.

This is of course a worry for the employees of the business and some contacted us yesterday.  If you are worried then please refer to our help for employees pages that sets out your rights.


Case study of a building company in the West Midlands rescued by KSA Group.

KSA Group saves a building company from closing by stopping an advertisement of a winding up petition, organizing new  banking facilities and getting a company voluntary arrangement approved by their creditors.

Read the case study below.

http://www.companyrescue.co.uk/case-studies/cva-case-studies/case-study-of-building-company-rescued-by-cva-in-the-west-midlands

Thursday, 10 October 2013

Trigon Snacks is sold out of administration saving 110 jobs

Following our report about Trigon Snacks going into administration, the Liverpool company behind the well-known Planters and Big D peanut brands, has been sold out of administration to T Choitram Sons (London), part of the Natco Food, for an undisclosed sum saving 110 jobs.

In the first week of the administration the administrators, Duff and Phelps, made 64 of the 174-strong workforce redundant.  At the time they stated that the business was in urgent discussions with a buyer.  So it has come to fruition.  A sale following administration is a good way of getting money back for the creditors and is in keeping with the main purpose of administration which is rescue.

The majority of sales come not through its own brands, but by supplying of own-brand nuts to major supermarkets such as Sainsbury's, Waitrose and Morrisons.

Mr Whitehouse said: “This sale sees the continuation of a well-established and recognised brand and business. It is a great result for the business’ 110 strong workforce who I would like to thank for their support over the last few difficult weeks."

Wednesday, 9 October 2013

Dennis Cox Building Services in administration move

Dennis Cox Building Services, the Slough-based design and construction business, has filed its intention to appoint administrators to protect it from creditors, according to reports in the Construction Enquirer.  The move may have come about as a result of an impending winding up petition.

Its last filed accounts recorded sales of £15 million with a pre-tax profit of £508k. So it goes to show that accounts are historic!

The firm has worked on a number of high profile jobs including Wembley stadium, the Olympic Athletes Village and Harrods.

An intention to appoint administrators is a powerful tool that gives the company breathing space in which to either refinance the business or restructure for a rescue.  It stops all creditor actions for 10 days and can be extended a further 10 days if the situation is likely to be resolved during the second extension.

Talk to our insolvency practitioners to find out how this can be done.

A CVA proposal accepted in Scotland

Case study of small business that ran into difficulties

The company was run by a sole director who liked nothing better than getting in his lorry and driving!  He was not interested in the paperwork side of the business. With no internet connection in the office, the part time book keeper was very limited in what she could do. Director was determined to turn the company around and ensure that he was fully compliant going forward.

How much did he owe and what did we do about it?

Read our case study below to find out.

http://www.companyrescue.co.uk/case-studies/cva-case-studies/cva-in-scotland-despite-threat-of-winding-up-petition

Tuesday, 8 October 2013

Credible financial forecasts are critical in a CVA proposal

If you are thinking of making a Company Voluntary Arrangement (CVA)  proposal to your creditors, one of their critical prerequisites is your credibility. Think about it: many of them will have been chasing you for weeks and may even have issued a Winding Up Petition.

If you come back to them with what they may see as yet another promise about to be broken, or with a less-than-professional proposal to pay them, you can understand that they will need some convincing.

Read our page on Financial Forecasts in a CVA - courtesy of our Financial Director Andrew Hunter  that gives an insight into the whole process.


Abode lawyers shut down by the SRA

A solicitor firm that specializes in conveyancing in the Harrogate and London area has been shut down by the Solicitors Regulation Authority (SRA) following an investigation.

The reason has been cited as the failure to comply with the legal professions accounting rules.  Interestingly, back in 2011 the firm was recognized by The Lawyer magazine as the being in the top 10 UK firms by revenue per partner.  So all was perhaps not what it seems!

The SRA also said the practising certificate of partner Rajob Ali will be automatically suspended, so he will not be able to practice as a solicitor.

Law firms have been under increasing pressure from the SRA from both a compliance point of view and the authority have been looking at their overall financial stability.

For more information on how we can help struggling law firms see our pages on help for lawyers


Monday, 7 October 2013

New SIP 16 Rules come into effect 1st November

The main changes are:

A detailed report of the sale should be provided to creditors with the first notification to creditors within 7 calendar days of the sale.  This should then be provided in the Statement of Proposals filed at Companies House;

Information to be provided to creditors should now include:-

Details of Charges

Details of previous sales of the business by office holders in the previous (at least) 24 months and disclosure of any involvement by the Administrator or the Administrator’s firm;

More extensive information regarding valuations obtained;

Any information necessary to ensure a transparent explanation of the transaction where there has been a group transaction;

Details of sale consideration by asset categories and split between fixed and floating charges.

Comments please!

KSA Group saves IT services company in Surrey

KSA Group saves IT services company in Surrey.


Our client was a growing ITC consultancy, it provided solutions, software, service and support. Growth was too fast for the working capital available and whilst it was profitable cashflow was always a problem. Then sales slowed and the “debt wave” coming along behind them, threatened to wash over the business. The company was encountering further financial difficulties because of 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.


A classic British story of being undercapitalised, profitable but brought down when HMRC stepped in. Having had several time to pay deals over 2 years, the non payment of a large VAT bill brought the HMRC Debt Management Unit into play. No further TTP’s would be provided, the company needed to refinance and EFG (Enterprise Finance Guarantee Scheme) loan was raised to pay off taxes and creditors. What next? The new software took still longer and then the MD’s father provided funding to tide the situation over, until next time.

What was the KSA Rescue Strategy?

Read our latest case study to find out how could rescue your business!

http://www.companyrescue.co.uk/case-studies/cva-case-studies/cva-case-study-for-it-services-company-in-surrey

Friday, 4 October 2013

Administrations down by 16%

This is compared to the 1,464 businesses that fell into administration in the same period last year, and 1,581 in the first nine months of 2011.

The construction industry saw the most positive results, with a drop of 30.5% of administrations. The construction industry saw 241 companies fall into administration in the period, compared with 347 in the first nine months of 2012.

Lee Manning, restructuring partner at Deloitte, said the figures indicate how a “clearing out” of underperformers has given way to “a rebalancing of supply and demand."

“Construction has clearly benefitted from more activity in the housing sector as demand and prices pick up," he said. "Leisure has seen fewer collapses due to a weeding out of the poor performers rather than an increase in discretionary spend for consumers. Overall, London saw the largest number of administrations with 316 appointments, followed by the North West with 272 appointments so far this year.”

Manning points to this week’s Deloitte CFO survey as evidence expansion is now a higher priority for CFOs than cutting costs, “therefore over the longer term, further decreases in insolvency are likely if the outlook for growth in the UK improves," he said. "Indeed, if you take the official figures, administrations have been falling year on year since the end of 2008.”

Hospitality and Leisure, including hotels, restaurants, pubs and leisure providers, recorded a decrease of 24.6%. Administrations in the retail sector dipped by 9.6%, from 157 appointments for the first nine months of 2012, to 142 today.

If you want to find out more about administrations read our detailed guide to administrations

Administrations have fallen in part due to the recovering economy and the fact that struggling companies are doing more informal workouts with creditors and their banks.
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