Company Rescue

Pre Packs and CVAs in the Press

noreply@blogger.com (Robert Moore) — Fri, 17 May 2013 11:50:00 +0000

Read accountingweb.co.uk's review of the CVA versus Pre Pack debate on the 8th May. There is already a lively debate on the page itself!

In essence, as we said before, it is very much "horses for courses" and CVAs and the Pre Packs have their place. Both are powerful rescue techniques that save jobs and keep businesses trading. Yes, Pre packs have been abused in the past and are sometimes perhaps pushed where a CVA would have been a fairer deal for all concerned. Also there is always a perception of pre packs by creditors that a deal has been done behind their backs and people who lose money will often feel they have been treated unfairly.

The most important thing to do is make sure that a professional firm is appointed to advise on ALL the options.

If you want to talk about rescuing your business through either a pre pack or a CVA then call us on 0800 9700539

Hotel opened by Easyjet founder has gone into administration

noreply@blogger.com (Robert Moore) — Thu, 16 May 2013 16:11:00 +0000

Ernst &Young has been appointed administrators of Glasgow eH (Trading) the operator of easyHotel in Glasgow City Centre. The hotel has now been shut. The hotel's rooms were priced at just £25 a night and was a "super budget" option. The hotel was converted from a 1970s office block which cost £6m. A quick back of the envelope calculation has shown that this was always going to be a struggle.

I am going to make some assumptions here;

125 rooms with 90% occupancy at 365 days a year! = approx £1m a year in revenue ( this is very optimistic occupancy rate) The return on capital assuming running costs at £300k pa is 11% so it would take 9 years to get your money back! I have no idea how much it cost to buy the site.

Having said that the new owners of Travelodge are convinced there is a strong market for budget hotels in the UK and are investing some £200m over the next few years. But even Travelodge is £50 a night.

Fiona Taylor of Ernst &Young said: "We are currently undertaking a full review of its financial position, but an immediate lack of funds has necessitated the closure of the hotel and the resultant job losses.

The administrators said the insolvency move does not affect its parent, Glasgow eH Limited Partnership, which owns the site of the former Drummond House, nor the wider easyHotel chain.

What is pre pack liquidation?

noreply@blogger.com (Robert Moore) — Wed, 15 May 2013 09:04:00 +0000

Pre pack liquidation is a bit of a misnomer.

A pre pack is the term normally used where the business and assets are sold to a third party or "newco" and the "oldco" is put into administration in one movement. When people refer to a pre pack liquidation they are most likely thinking of a phoenix. There is no simultaneous transaction. To read the differences see our page on pre pack liquidation.

There is so much misunderstanding of the insolvency world. So for a clearer understanding read our insolvency advice site at www.companyrescue.co.uk

Daniel Contractors in administration rumours

noreply@blogger.com (Robert Moore) — Tue, 14 May 2013 13:43:00 +0000

Update: Daniel Contractors have had a winding up petition advertised yesterday. This will mean the bank account will be frozen.

A report in the Sunday Times said that Daniel Contractors, and engineering business based in Warrington, with a workforce of 1,300 was likely to go into administration. The firm would neither confirm nor deny the rumours. Deloittes were names as the likely administrator. A spokesperson for construction credit rating agency Top Service said the firm had been on its radar for a while “due to increasing number of adverse reports from our customers and the mounting County Court Judgements (CCJs)”. However the total value of the CCJs amounts to £111k but the most recent was lodged on the 8th May.

This could just be a temporary cashflow problem which they can trade out of, but if it is not, the most likely next step is a notice of intention to appoint administrators. This will protect the company against any further legal actions against the company but they will have a maximum of 20 days, assuming one extension is allowed, before administrators will need to be appointed.

Daniel Contractors are involved in laying large pipelines and the hire of plant and equipment - The main sector they work in is Oil and Gas.

Like many large engineering firms it suffered in the recession and lost some £100m in sales, margins have been squeezed but added to this its Chief Executive also died not long ago.

Recent accounts show that the firm made £117.4 million in revenues, with pre-tax profits of £1.3 million for 2011.

Turnaround from Local, National, and International perspectives

noreply@blogger.com (Robert Moore) — Tue, 14 May 2013 12:17:00 +0000

Date: Wed 12 June, 6pm

Venue: The Waterhouse Chamber, The Town Hall, Blagrave Street, Reading, RG1 1QH

Cost: TMA Members: FREE, Sponsors: £40.00 (after allocated free places),
Non-Members: £40.00

This event, part of the regional activities of the TMA (UK), will focus on the local, national and international turnaround and restructuring marketplace.

Informing us of the local situation will be Pitmans LLP, the largest law firm in the Thames Valley area. With two offices in Reading and one in the City of London, Pitmans have a long and impressive track-record in Turnaround, Restructuring and Insolvency; as such they are in prime position to present their overview of local turnaround conditions, cases and concerns.

KSA Group Ltd are a nationwide firm of turnaround, restructuring and company rescue specialists, with regional offices and representatives as far afield as Edinburgh, Berwick upon Tweed, Gateshead, Birmingham, Bristol and London. Their operation is supported by a vast online presence of websites and internet response mechanisms, receiving literally hundreds of hits per-day from troubled directors and advisors across the country. As such they are able to report on what is happening in the national turnaround marketplace.

Bryan, Mansell &Tilley LLP are specialists in International Turnaround situations and who better to report on the global situation than Alan Tilley, an internationally renowned figure with the TMA and the industry as a whole. Alan will speak on the current trends, challenges and cases across the globe. The presentation will also contain a brief review of the TMA Europe Conference, which will have taken place in London on 6^th & 7th June, and cover the newly launched EACTP (European Association of Certified Turnaround Professionals) accreditation programme.

There will be an opportunity for questions and answers following the presentations.

After the conclusion of the formal part of the event, attendees are invited to enjoy some quality networking time and hospitality will be provided by the event sponsors – KSA Group Ltd.

The event speakers

Suzanne is one of the leading insolvency and turnaround specialists in the South East dealing with all aspects of corporate and individual insolvency, restructuring and refinancing including, but not limited to, contentious and non-contentious issues arising in administrations, receiverships, liquidations (solvent and insolvent), bankruptcies, voluntary arrangements, and security issues, and in restructuring and refinancing projects. Suzanne is a licensed Insolvency Practitioner.

Chambers Guide to Legal Profession for 2010 states that Suzanne has a: "high-level skill set and commitment to meeting her clients' needs". Specialist interests are Debt Recovery, Dispute Resolution, Insolvency & Restructuring, Automotive Sector, Invoice Discounting, Construction & Engineering. Suzanne is a graduate of Middlesex University. She trained and qualified as a commercial litigation and insolvency solicitor at Pitmans, joining in 1994

Keith Steven of KSA Group Ltd has been rescuing and turning-around companies since 1994; he has worked for insolvency firms, turnaround funds and venture capital investors. Keith formed his own turnaround practice, KSA Group Ltd in 2001, and he is acknowledged as an expert in the delivery of CVAs for SME companies faced with financial difficulties.

Drawing on case studies from across the UK, Keith will paint a picture of the national scene and illustrate the situation with examples of companies currently being ‘rescued’ or in the ‘work-out/post-restructuring stage. The combination of regions, sectors and corporate ‘tangles’, plus the diversity of rescue options used by KSA Group, should ensure an educational and entertaining presentation.

KSA Group is one of the leading turnaround and insolvency specialists in the UK, with offices and representatives in London and across the country. Their priority is company rescue, not corporate closure. The company developed the UK's first on-line turnaround and support site,www.companyrescue.co.uk, with over 1,500 pages of free information, PDF guides, FAQ's, flowcharts and case studies - information freely available, and of great value, to accountants, lawyers, bankers, advisors and of course directors of /investors in struggling businesses.

KSA Group is delighted to sponsor this evening’s Thames Valley event and is proud to be a Corporate Sponsor of TMA.

Alan Tilley is founding principal of Bryan, Mansell and Tilley LLP. He has over 20 year’s expertise in operational and financial turnaround and restructuring, managing the complex issues in preserving enterprise value while operating in the zone of insolvency. He is a frequent speaker on cross border European restructuring and has written several articles on the subject.

He is the 2008 recipient of the TMA International Chairman’s award for outstanding service to the international turnaround and restructuring profession and Insolvency & Rescue UK Turnaround Manager of the Year 2010. He is co author of the Institute of Chartered Accountants best practice guideline on Turnaround’s. His hands-on and Board level experience in finance and operational management makes him equally at home in large and small companies, in distress and performance improvement situations, in M&A due diligence and in stabilising new acquisitions.

If you would like to come along to the event as a Guest of KSA Group get in touch with Robert Moore Please email robertm@ksagroup.co.uk or call 0207 877 0050

Punch Taverns restructuring talks in difficulty

noreply@blogger.com (Robert Moore) — Mon, 13 May 2013 10:44:00 +0000

Punch Taverns have been holding talks with its debt holders, which according to insiders, have reached a stalemate. This could lead to the business defaulting on its debts and going into administration. The group owes some £2.4bn spread between 2 divisions which owns 4000 pubs. The parent company is paying about £2m per month to stop the divisions defaulting on the debts.

The plan needs the approval of three-quarters of creditors for the restructuring to be implemented. Punch has said that it wants an agreement to be reached by the end of next month, or the company could go into default.

Given the size of the company and its dominance in the UK pub market it is likely some sort of deal will be thrashed out. Punch have previously said that a pre pack administration would not be in the interests of the company or its shareholders.

A company source told the Mail on Sunday that; ‘We are still trying to achieve a solvent restructuring.’

But one key shareholder said: ‘The company could end up being forced down a pre-pack route, which would wipe out the shareholders, including many employees.’

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

The guide covers:

Is my pub or hotel company insolvent?
How can a pub get a time to pay deal with HMRC for PAYE and VAT?
What is a Company Voluntary Arrangement and why it is a great rescue tool
How to cut costs in your business
How to deal with a winding up petition from HMRC.

Construction output down to levels last seen in 1998

noreply@blogger.com (Robert Moore) — Fri, 10 May 2013 13:44:00 +0000

Construction output in the UK shrank by 2.4 per cent in Q1 of 2013, falling to its lowest level since 1998.

The decline in output was mainly due to a sharp fall in new work, especially in the public sector. There has been a small rise in repair and maintenance work for private housing. So sounds like the big infrastructure projects will be delayed until nearer the election so that it can flatter the GDP figures...

Construction output, is now 6.5 per cent lower than for Q1 2012. Construction is down 20% since 2008 when there was a mini boom after the credit crunch.

The UK’s economy has contracted by 2.6 per cent over the same period.

The amount of new housing work available declined by 4.1 per cent and the amount of infrastructure work by 7.5 per cent. Housing repair and maintenance work by public corporations declined by 3.2 per cent, against a 0.4 per cent rise in output for the private sector in this area.

Meanwhile Experian has published statistics that show the insolvency rate among businesses with 25-50 employees fell by 0.07 per cent from 0.24 per cent in March 2012 to 0.17 per cent in March 2013 – almost back to the levels seen in March 2007 of 0.16 per cent and nearly half their peak of 0.35 per cent in March 2009.

Insolvencies also fell by 0.07 per cent amongst businesses with 11-25 employees, down from 0.25 per cent in March 2012 to 0.18 per cent in March 2013. This represents a fall of about 30% in the insolvency rate overall

If you strip out the effect of insolvencies in the construction sector then the rest of the UK businesses are holding out very well.

For insolvency advice visit www.companyrescue.co.uk

CVA versus Pre Pack Debate

noreply@blogger.com (Robert Moore) — Thu, 09 May 2013 14:58:00 +0000

We had almost 100 people come to attend the debate last night at the TMA London event to debate CVAs versus pre packs as an insolvency mechanism.

The audience got to hear about the relative merits of each mechanism and when they are best applied. There was the inevitable concerns that Pre Packs are unethical and that creditors perceive that they have been "stiffed". Others were concerned that CVAs leave directors in control and there is no new money brought in to provide working capital. All these concerns were addressed and debated.

At the end of the evening the vote moved towards CVAs being the better option. However, it was agreed that it is very much "horses for courses" and that all options should be considered. There is alot of misunderstanding around both of the mechanisms and they each have their place. The debate highlighted that the power of the CVA is often underestimated, which may explain why so few of them are done. It also showed that a pre pack can be very effective where there is a danger of the business value falling rapidly but there is someone that can take it over to preserve the business and save jobs.

A pre pack is perhaps more open to abuse than a CVA due to its often rapid execution but there are always going to be a minority of people who don't play fair.

It should be remembered that IPs are brought in after the company is insolvent and needs radical restructuring or closure to prevent a complete meltdown of asset values, loss of jobs and not all creditors being treated fairly as required by law.

HK Taverns in administration

noreply@blogger.com (Robert Moore) — Thu, 09 May 2013 10:19:00 +0000

HK Taverns, which managed and operated 50 pubs in the East Midlands has gone into administration. Graham Bushby and Guy Mander of Baker Tilly Restructuring and Recovery LLP are the administrators

The firm's operations included small community pubs to much larger locations that delivered revenue from food and drink sales.

Mr Bushby, said that the group was suffering as a result in lower consumer spending and that the company's financial position was unsustainable.

He said: “In response to creditor pressure, the company management reached the inevitable conclusion that the only option was to appoint administrators. Since our appointment we have worked closely with the pub company landlords to facilitate an orderly handover of the leasehold portfolio, thereby in many cases saving jobs and preserving value for all parties."

“We anticipate continuing to trade at five sites, which will secure around 40 jobs, until a buyer for the individual pubs or the group can be found.”

Administration can be a very powerful way of preserving the company. It is not all about the end of the business! Yes, some jobs are lost but this is as a result of rapidly cutting costs in a business. The first aim of administration is rescue after all! To see how administration can help save your business take a look at our pages on administration and pre pack administration

York-based Coggles in administration

noreply@blogger.com (Robert Moore) — Wed, 08 May 2013 12:16:00 +0000

Coggles Limited, the fashion retailer based in York, has been put into administration with the loss of 30 out of 60 jobs. Andy Clay and David Acland of Begbies Traynor are looking to sell the business.

The company was founded in 1974 by Sarah Coggles, and had a successful online presence as well as their stores in Petergate which sold 200 ranges of specialist and popular brands of clothing for both men and women.

Mark Bage, chief executive and creative director of Coggles, said: ""The last two quarters have been the toughest I've seen in the industry. This is the third recession that I have been through but this recession has hit our sector the hardest, which has effectively been a triple dip recession."

Andy Clay of Begbies Traynor said; “We are currently reviewing the business and making every effort to secure a return for the creditors and a future for the business and its staff.”

2 of the stores are continuing to trade while a buyer is found.

According to the last set of accounts filed the Coggles Limited made a loss of £1.5m to the January 2012

KSA Group Insolvency Notices

noreply@blogger.com (Keith Steven) — Tue, 07 May 2013 12:01:00 +0000

Platinum Investment Property Limited

Meeting of the Creditors of the above named Company will be held at the offices of KSA Group Ltd, Tower 42, Level 7, 25 Old Broad Street, London, EC2N 1HN on 22 May 2013 at 11.00 am

See the full notice below

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

Freeland Travel Goods Limited

Meeting of the Creditors of the above named Company will be held at The Hubworking Centre, 5 Wormwood Street, London, EC2M 1RQ on 21 May 2013 at 10.15 am

See the full notice below

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

For more information on liquidations see our site http://www.creditors-voluntary-liquidation.co.uk

Insolvencies fall significantly in the Q1 of 2013

noreply@blogger.com (Robert Moore) — Tue, 07 May 2013 09:07:00 +0000

Figures from the Insolvency service showing the fall in the number of insolvent businesses

Table I. Company Liquidations in England and Wales (seasonally adjusted) ¹
							% change – Q1 2013 on
		2012 Q1 r	2012 Q2 r	2012 Q3 r	2012 Q4 r	2013 Q1 p	Q4 2012	Q1 2012
Company Liquidations		4,297	4,064	3,954	3,823	3,619	-5.3	-15.8
of which:	Compulsory	1,204	1,028	1,078	933	1,043	11.8	-13.4
	Creditors’ Voluntary²	3,093	3,036	2,876	2,890	2,576	-10.9	-16.7

Table II. Other Corporate Insolvencies in England and Wales (not seasonally adjusted) ¹
						% change – Q1 2013 on
	2012 Q1	2012 Q2	2012 Q3	2012 Q4	2013 Q1 p	Q1 2012
Receiverships²	336	333	277	276	236	-29.8
Administrations	779	625	548	580	557	-28.5
Company voluntary arrangements³	175	352³	161	151	142	-18.9

For the first time since 2008 all forms of insolvency procedure have fallen in number. Liquidations have fallen some 16% in 2013 when compared to 2012 and administrations and company voluntary arrangements have fallen 30% and 19% respectively. In fact the numbers are now down to almost pre credit crunch figures

The reasons for this are mixed. HMRC have adopted a softer stance leading up to the implementation of Real Time Information (RTI) and there has been a significant drop in winding up petitions. However, the most marked change is in the number of administrations. These are usually driven by the banks and other secured lenders. Business confidence is starting to improve and it could be they are holding back on calling in any loans.

It also seems that many companies that have held on for this long are unlikely to fail now. An increase in economic activity will see increased competition put pressure on weaker companies and there is always the danger of ambitious companies overtrading.

KSA Group Insolvency Notices

noreply@blogger.com (Robert Moore) — Fri, 03 May 2013 14:27:00 +0000

Pre-Eminent Consultancy Limited

Meeting of the Creditors of the above named Company will be held at the offices of KSA Group Ltd, Tower 42, Level 7, 25 Old Broad Street, London, EC2M 1HN on 15 May 2013 at 10.15 am

See the full notice below

http://www.companyrescue.co.uk/insolvency-notices/pre-eminent-consultancy-limited-liquidation-notice

Fake Bake in Liquidation

noreply@blogger.com (Robert Moore) — Thu, 02 May 2013 16:03:00 +0000

Sandra McClumpha, the businesswoman, whose business brought the Fake Bake product to the UK has gone into liquidation. She paid £10m for the right to distribute the tanning product in the UK

She is thought to have made £9m from the product, but a few weeks ago a petition was submitted to the Sheriff's Court for a winding-up order.

On Wednesday Zolfo Cooper confirmed that they had been appointed as provisional liquidators for the Bothwell-based company.

Annual accounts for the year 2010 showed the company had assets worth £2.1m and liabilities of £2.4m. It has been reported that her former business partner used Fake Bake to guarantee a rental agreement on another business, luxury kitchen firm Stone & Wolfe, which is also going through insolvency proceedings. A claim he denies

The late filing of accounts is often a warning sign of insolvency or disputes and 2010 was some time ago! Read our page on warning signs of distressed businesses

Fat Cat Cafe Bars in administration

noreply@blogger.com (Robert Moore) — Thu, 02 May 2013 14:17:00 +0000

Fat Cat Cafe Bars, based in Derby, has gone into administration with administrators at Cooper Parry, being appointed as administrators.

The firm had 11 bars and pubs in the UK. The companies currently employ around 200 staff. Some bars are expected to trade on, but some redundancies will be inevitable, the administrators said.

Courtman, head of restructuring at Cooper Parry, said “The companies have been adversely affected by poor trading at a few of their outlets.

"The administration affords the companies the opportunity of restructuring its business whilst continuing to trade. We are keen to explore all options and shall continue to trade those operations for the foreseeable future.”

Winding up petitions continue to decline

noreply@blogger.com (Robert Moore) — Wed, 01 May 2013 10:34:00 +0000

In April 2013 the number of petitions advertised was just 550 in April 2012 the number was 607 and in April 2011 it was 734. 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. In fact, yesterday they issued approximately 130 petitions which is the largest number they have issued in one go for some time. 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.

Sealine International in administration

noreply@blogger.com (Robert Moore) — Wed, 01 May 2013 07:38:00 +0000

The luxury yacht maker Sealine International, based in Kidderminster, has gone into administration with the loss of 230 jobs.

In a statement, the administrators at Baker Tilly Restructuring and Recovery said they have given redundancy notices to 234 employees and are assisting them to make claims against the government redundancy fund.

The administrators said they would be working to "maximise recoveries for the company's creditors", which includes the sale of plant and recovery of monies owed to the business.

Sealine became one of the so-called 'Big Four' British yards following strong growth throughout the 1990s. It enjoyed recent success with the SC35/S380 sportscruiser.

Sealine made a £4m pre-tax loss on a turnover of about £33m in the year to 31 December 2011, according the latest available accounts. It had been loss-making for a number of years.

If you are an employee of the business then please take a look at our facebook page where you can see our guide for redundant employees.

Is the economy on the turn?

noreply@blogger.com (Robert Moore) — Tue, 30 Apr 2013 14:12:00 +0000

Since the economy narrowly avoided a "triple dip" recession last week some more encouraging economic news has emerged. Mortgage approvals and lending to businesses improved in March by more than expected.

In fact, lending to small and medium sized businesses, excluding overdrafts, increased by £239m. This is the first rise since August 2011. It should be noted that the many new lends may in fact be refinancing of existing arrangements rather than completely new loans. The finance market is becoming increasingly complex with more entrants into the market. Read our pages about funding options for business and you will see just how many different ways there are to lend/borrow money.

Coupled with this there has been reported, in London at least, a strong recovery in house prices although this is mainly down to a distinct lack of supply. However sentiment is always important and higher house prices will give a boost to our consumer led economy. Of course, a rebalancing of the economy towards more manufacturing seems to be a long way off as the small growth in GDP reported earlier was almost entirely down to strong growth in the service sector.

Rowecord Engineering in administration today

noreply@blogger.com (Robert Moore) — Mon, 29 Apr 2013 09:49:00 +0000

Rowecord Engineering the biggest steelwork company in Wales is due to go into administration today putting 400 jobs at risk.

The company is best known for high profile prestigious projects such as the roof for the Olympics aquatics centre. The problem appears to have been a drying up of large scale projects in the region of £500k upon which it depends.

Newport-based Rowecord Engineering says it has exhausted every option to sustain the business.

The company has a production capacity of 50,000 tonnes per annum and a total workforce of 600.

This is obviously a blow for Wales and highlights that the construction sector is still struggling. It was reported earlier that construction activity shrunk by 2.5% in the first quarter of 2013 which was only offset by the services sector's strong growth which prevented the economy slipping back into recession.

Interestingly there appears to be an unusually high incidence of construction and engineering businesses featured in the latest Winding up Petition List from HMRC click on the link to see.

AGS Home Improvement in administration but buyers are waiting

noreply@blogger.com (Keith Steven) — Fri, 26 Apr 2013 13:50:00 +0000

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

UK GDP shows triple dip avoided

noreply@blogger.com (Robert Moore) — Thu, 25 Apr 2013 08:57:00 +0000

The latest ONS statistics have shown that the UK economy avoided a further shrinking in the first quarter of 2013 with "growth" of 0.3%. Whilst this is a relief for the Government it is almost just a rounding error.

The main thing that these statistics have revealed is the difference in performance of different sectors of the economy. The service sector grew by 0.6% whilst the construction sector continued to shrink by a further 2.5%. Meanwhile the much hyped rebalancing of the economy appears to not have happened as 0.03% growth is all it has mustered.

Construction is need of a boost as more businesses fail with McArdle, the civil engineering contractor, being the latest to go into administration.

So what can be done for struggling construction businesses?

In construction the smallest mistake culminating in a cost overrun could be critical. A business may no longer be viable going forward so liquidation might be the only option.
If a business is fundamentally viable then a company voluntary arrangement could be the answer
One particular building company we rescued had an overdraft of £150k with RBS. This bank is known for blocking pre-pack administrations where the business is sold to the encumbents. So after a meeting with KSA Group a rescue plan was put together.

For details of how this building company was rescued please read our case study; CVA Rescues Building Company in the North East

Scottish business insolvencies fall 62.8% in last quarter compared to last year

noreply@blogger.com (Robert Moore) — Wed, 24 Apr 2013 14:07:00 +0000

The number of people and businesses going bust in Scotland has fallen sharply, according to
Accountant in Bankruptcy (AiB), which is Scotland's version of the Insolvency Service. The AiB said the number of Scottish companies becoming insolvent or entering receivership fell by 22.7% in the latest quarter and the total was 62.9% lower!! than a year ago.

The overall number of personal insolvencies is now at its lowest quarterly level since the Low Income Low Asset (LILA) route into bankruptcy was introduced in April 2008.

These figures are encouraging but still many businesses continue to struggle. KSA Group has managed to help a number of businesses in the region with time to pay deals and company voluntary arrangements, These figures are not included as it only concentrates on administrations and receiverships.

Meanwhile, the quarterly Red Flag Alert statistics, published by Begbies Traynor, indicates that since the first quarter of 2012, combined levels of distress have fallen by over 50% in Scotland.

Derek Robinson

Scottish Companies needing help can call our Scottish Office on 0131 242 0081 and you can talk to Derek Robinson our Regional Manager

HMRC increases its use of Distraint in 2012

noreply@blogger.com (Robert Moore) — Tue, 23 Apr 2013 13:38:00 +0000

HMRC has almost doubled its use of powers to seize businesses’ assets in order to settle late VAT bills in the last year.

According to Syscap, the finance providers, HMRC has used its powers of distraint to seize business assets – 4,746 times to collect VAT in 2012. This represents a 98% increase on the 2,401 times it used these powers to recover overdue VAT in 2011.

It goes to show how important it is to collect money in from debtors as VAT is often payable when the invoice is issued rather than when it is paid. You can opt to pay only on receiving payment but then you can only claim back VAT after you have paid your suppliers - This is known as cash accounting

For help on how to collect debts in refer to our pages on debtor collections

What can you do about distraint?

Effectively if you do not reach a deal or pay in full the field officer or their agents can remove and sell the assets in 5 days. To sell the assets, after they are covered in this way is a criminal offence. If the bailiff has obtained a walking possession he can force entry to recover the goods after the 5 day period.

Threats of distraint or legally taking possession of goods should not be ignored. If you do not agree that you owe the tax demanded, you should tell the HMRC officer, but you will find that he/she is in a non-negotiable position once he/she is on the premises.

So, if you have a distraint threat or have been visited by an HMRC officer or bailiff , then you must ACT. In the event that the business is not viable going forward call us and we can put the company into liquidation quickly and lower the risk of personal liability.

It may be that you will be able to negotiate time to pay VAT going forward but you will need to pay the outstanding very quickly

Harlequin Property in Administration

noreply@blogger.com (Robert Moore) — Tue, 23 Apr 2013 11:53:00 +0000

Harlequin Property, the Essex-based Investment firm, which promoted off plan investments in the Caribbean filed an intention to appoint administrators yesterday. A statement, signed by director Carole Ames, said: “The company is or is likely to become unable to pay its debts.”

The firm has taken more than £300m deposits from investors since 2006. However, only some 300 properties appear to have been built and there is currently an investigation by the Police. The firm promoted its investments through many celebrities such as Pat Cash and Gary Player. It is understood that around 40 investors served statutory demands on the firm for monies owed to them. The next step would have been a winding up petition.

It has prompted fears over the future of at least 6,000 investor’s deposits, many paid through personal pensions, and around 40 jobs at the Basildon head office.

It is unclear as yet what will happen to the Caribbean registered companies which own and planned to develop the resorts.

Scottish Coal in Liquidation

noreply@blogger.com (Robert Moore) — Mon, 22 Apr 2013 08:19:00 +0000

Scottish Coal has gone into liquidation, with the loss of 590 jobs, the vast majority of which are in Clydesdale. All operations have stopped and Blair Nimmo and Tony Friar, of KPMG, were appointed Joint Provisional Liquidators on Friday.

Some 590 employees were made redundant and all operations ceased immediately following the insolvency appointment. 142 staff remain to help the liquidators secure the sites and help sell any assets. Scottish Coal operates six open cast coal mines in East Ayrshire, South Lanarkshire and Fife. The business employed a total of 732 people.

Blair Nimmo, Joint Provisional Liquidator and Head of Restructuring at KPMG in Scotland said: “In light of Scottish Coal’s poor trading and financial position, we have had to cease trading with immediate effect.

“It is extremely regrettable that we have had to make so many redundancies but have been left with no other option.

The problems at Scottish Coal were well publicised as 450 staff were placed on notice of redundancy back in March as the directors tried to restructure the business. Falling coal prices, and increased operational costs (mainly fuel) have put a strain on cashflow. Finally the prospect of dwindling reserves was the final straw.

Any parties with an interest in acquiring the business and assets should contact Blair Nimmo in KPMG’s Edinburgh office on 0131 222 2000 or in writing at Saltire Court, 20 Castle Terrace, Edinburgh, EH1 2EG.