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EBI Apparel in administration

EBI Apparel, the leeds based manufacturer of lingerie and underwear under licence for clients which includes Monsoon, the high street retailer, has gone into administration.

The administrators at Leonard Curtis are trading the company while looking for a buyer.

EBI Apparel also produced a private label service and owns the lingerie brand Ballet.  It works with various licences through its brand and licensing division.

The business employs more than 65 staff and has partner factories worldwide including an operation in Hong Kong.

Trading a business while looking for a buyer is known as a trading administration.  The administrators will be looking to sell the business quickly so as to get the best outcome for creditors.  A pre-pack administration can only really be achieved if a buyer is already willing and able to take on the business prior to the appointment of administrators.  In a pre-pack the company is put into administration at the same time as the "business" is sold to a new company.

Fuel price rise will cause difficulties for smaller hauliers and couriers.

Inflation was in the headlines even before the recent spike in oil prices due to unrest in the Middle East.  Oil now (fri morning) stands at $111 dollars a barrel.  The effects on our economy of this rise in prices is complex.  In some ways we benefit in that we produce oil from the North Sea and large British oil companies make bigger profits, and finally the tax on fuel helps the country's coffers.  However, if it rises too much and for too long then the cost to the consumer and businesses starts to impact on discretionary spending, will feed inflation and will damage the recovery.

Haulage companies and couriers will start to feel the effects immediately as every job costs more to carry out.  Only larger companies such as airlines can hedge against sudden price rises by buying fuel in advance.

If the rise in costs of fuel is the last straw then please get in touch.  There are ways that we can help, especially if you have a debt that you could pay off over a period of 1 to 5 years.  A time to pay scheme to pay off your tax over 12-18 months could be put together.  If the debt is larger and needs to be paid off over 3-5 years then perhaps a company voluntary arrangement or CVA could be the answer.  Call us on 0800 9700539 or call Keith direct on 07974 086779

We have rescued a number of haulage companies.  Some case studies below;


Are your customers in trouble?

Often businesses will look closely at their own financial heallth, which of course is a good thing, but some are oblivious to the financial health of their customers.  If your biggest customer is in difficulty they aren't going to tell you, so you need to be vigilant.

What to look out for

  • The most obvious one is late payements. Paying late is for some companies normal practice and is not always an indicator of financial problems just an attitude to cashflow.  Any sudden change in policy or asking for extended credit should set off alarm bells.  
  • Make sure new customers are not only coming to you because they have not being paying their suppliers elsewhere. If they are good customers they will understand that you might have stringent credit terms for new customers.
  • Remember that formal credit checks are based on information that is historic.  By the time CCJ's have been lodged it is often too late.
  • Keep your ears open.  Industry intelligence is important so it pays to know who is struggling and who might in the future.
  • Sudden loss of communication is a tell tale sign.  It is human nature to start refusing communication if they feel they can no longer find a solution.
  • Make sure all your invoices are not disputed as it can be an easy delaying tactic by the customer.

Finally be prepared!  Have a plan B.  If you think that a major customer might fail to pay you line up some professional advice.  We can talk to you for an hour for no charge to help you go through your options. 0800 9700539

Have a look at our cost cutting page should you have a strain on your cashflow.

Capital Shopping Centres will not support JJB's CVA

Capital Shopping Centres has said that it will not support JJB sport's proposed second CVA.  How they will eventually vote will be decided at the creditors meeting.  The CVA will need 75% by value of the creditors for it to be approved.  In general landlord do not like CVA's as it can terminate lease agreements but if it is well put together and seen as fair then there should be less problems.  However, as this is the second time in two years they are going into a CVA the landlords are not sympathetic.

Capital Shopping Centres has only 4 units occupied by JJB Sports, so it may not be a deal breaker. 

However, according to reports, JJB has to present its business plan to its banks to secure its future tomorrow. It may be that the banks have the final say on the matter. As a secured creditor they have the power to appoint their own administrator if they want.

Shops may struggle to pay rent as cuts bite according to Hammerson, the owner of Brent Cross Shopping Centre

Hammerson, the owner of Brent Cross and the Bullring shopping centres, has warned that retailers will struggle to pay rents in the face of the economic headwinds in 2011.  However, they felt that their tenants were sufficiently strong and diverse so as not to adversly effect their portfolio.  Well they would say that wouldn't they!

Retailers in areas where there are thin pickings already will find it difficult.  This will be particularly true of parts of the country that are expected to suffer due to the high level of public sector job cuts.  Research by Experian showing a declining footfall in the North lend credence to this argument.  Manchester is expecting high levels of public sector lay offs and in Blackpool over half of the office workers are employed by government.

If you are a struggling retailer then please get in touch as we can help.  Have a look at our pages for struggling retailers and see what solutions are available.

Plymouth Argyle in administration almost...

The Directors of Plymouth Argyle Football Club have today issued a 'Notice of Intention' to appoint an administrator.

This action places a "quasi moratorium" over the company meaning that creditors can no longer take any action against the company prior to a formal insolvency event. However, it does also mean that the club has approx 10 days in which to come up with enough money to save itself. In most businesses issuing a "notice of intention" is just going "through the motions" ie informing the bank and giving them time to appoint their own administrator if they want to, prior to bowing to the inevitable. However, football is a funny old game and they do not seem to operate like normal businesses so a last minute rescue is still a possibility.

Winding up petition case studies

At KSA Group we have been able to help companies that have had winding up petitions served on them.  This is usually the last resort option of a creditor looking to recover a debt.  It is best to ACT BEFORE it gets to this stage but in the event of your business receiving one we can help - IF you contact us immediately. 

Please look at our case studies page which shows that we can stop or challenge petitions to wind up your company.  However, mainly we persuade creditors to accept our rescue plan using a CVA or by obtaining Validation Orders. Finally Administration can also be a powerful tool.

Winding up petition case studies

Farepak directors face disqualification

Nine former directors of Farepak, the failed Christmas hamper business, are facing disqualification in the High Court in an action brought by the Insolvency Service.

Farepak issued a series of profit warnings in 2006 before calling in BDO as administrators in October of that year. More than 113,000 Farepak customers lost an estimated £40m.  Farepak was not regulated by the FSA so no one was entitled to compensation under any government scheme.

The Insolvency Service said: “The application was made in the public interest on the grounds that the conduct of each director in relation to the relevant company or companies makes him or her unfit to be concerned in the management of a company.”

So what do you have to do to get disqualified?  Well, losing £40m of people's Christmas savings is going to make you very unpopular, but were they negligent?

To be disqualified the government agency will first have to prove wrongful trading or "unfit behavior". Having a business that becomes insolvent DOES NOT automatically mean that you will be disqualified. This is despite what many people may think.
These are the key points that the BIS seeks to ban directors on:

  • Failure to submit annual accounts to Companies House on time
  • Failure to submit annual returns to Companies House on time
  • Excessive salaries or drawings when the company was plainly insolvent
  • Trading on when he or she knew the company was insolvent (trading whilst knowingly insolvent)
  • Continuing to take credit when there was "no reasonable prospect" of creditors being paid.
  • Misrepresentation of the facts about the company
  • Failure to respond or comply with a liquidator's requests

So if you are taking payments "knowing" you can't honour them and misrepresenting facts then you are in difficult territory.

Blogged by Robert Moore

New Liquidation Reports online

We have now published the latest liquidation reports on our clients as is required by the Insolvency Act 1986.  All relevant creditors should have received these in the post.

See Enterprises Ltd
Growzest Limited
Herriot by Design Limited
MK Cleaning Services Ltd
Empire Dental Supplied Limited
Kitchen Magic (North East) Limited

Auto Windscreens in administration

Auto Windscreens has gone into administration after it lost a major contract and a creditor served it a winding up petition.

Auto windscreens operates a network of 68 fitting centres across Britain, 550 mobile units, a distribution centre in Aston, Birmingham, and a central call centre. The firm employs over a 1000 staff. The business had a turnover of £63m

Matt Cowlishaw, of Deloitte, said: ‘We are now in urgent discussions with the key stakeholders and interested parties in an attempt to save the business.’

Simply the business ran out of cash. Lower revenues in the last quarter, a delayed IT system had caused problems but it was the winding up petition that forced it into administration.

We have blogged many times before that management must try, as a priority, to dissuade a creditor from serving a winding up petition. A winding up petition limits the options available to the company and if it is advertised the bank accounts of the business will be frozen.

If you are an employee of the company then look at our help for employees page outlining your rights and options.

If you have similar problems or are a supplier to Auto Windscreens please get in touch to see if you can avoid a similar fate..
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