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All Saints Close to Sale

According to reports, The private equity group, Lion Capital, which owns La Senza, the high street lingerie brand, Weetabix, and American Apparel is close to acquiring a controlling stake in All Saints, the troubled ladies fashion chain.   All Saints employs 2,000 UK staff, and trades from over 100 locations worldwide and was close to going into administration if it could not secure £65m worth of funding to continue.
It is understood that once the deal is completed Lion will own around 75pc of All Saints, while Goode Partners, the US private equity firm will own 15pc and Kevin Stanford, the chain's chairman, will hold 10pc. The deal is believed to value All Saints at £105m.  The capital injection will secure the future of the chain and in the deal Lloyds Banking Group has agreed to extend its facility of £30m to the company.

The deal is likely to be completed until after the bank holiday.

Blogged by Robert Moore

Acorn Pets in Administration

Acorn Pets, the pet supply chain based in Fife, has gone into administration for the second time in two years.  The firm will keep its shops in Dunfermline  and Cowdenbeath, but all the other 22 will close.  About 122 jobs are expected to be lost.

It is the second time in two years that the firm has gone into administration, with the family-run firm in the hands of administrators at Begbies Traynor, following a sustained period of "poor trading."

Speciality shops are finding trading difficult with tough competition from supermarkets.

Could the business have been saved with a CVA?  It depends on whether the business was viable going forward.  This may have not been the case if it had a sustained period of poor trading...  BUT a CVA, if done early enough, may have been able to close the underperforming stores before they dragged the whole business down.

Amdega in administration

Amdega the conservatory manufacturer and supplier based in Darlington has gone into administration with the loss of 197 jobs. The business is almost 150 years old. Customers will be effected as the business had 300 outstanding orders. 

Administrators at KPMG said Amdega was "a victim of the severe downturn in the big-ticket and home-related parts" of retail. 

Further evidence of the downturn in consumer confidence has been revealed in the GfK NOP consumer confidence index that showed a fall to "-31"  a figure which has only been seen before in the height of the financial crisis in 2008 and in early 1990.

If you are an employee of the business then you can visit our help for employees pages on our website.

If you are a supplier to the business and you think that the collapse of Amdega will affect you then please get in touch and we can talk to you about your options.

Liquidation Reports Online

Creditors Voluntary Liquidation Reports now available for the following companies;

Dedicated Pressure Systems Limited
Panther Telemarketing Limited
RXperience Limited
Clairoy Maintenance Chemicals Limited
Arrow Fracht Dienstleistung Ltd
Hitlines UK Limited
ACJ Landscapes Limited
Complete Design Contracts Limited
Spedycja EWA Ltd
Arrowlink Express Limited
Sammond Projects Limited

As part of the Insolvency Act 1986 a report by the insolvency practitioner needs to be sent to all creditors of the company. These outline why the business failed, what the deficiency on the account was, as well as including all the requisite notices. This report is also sent to the registrar at Companies House.

The above companies have all entered into a creditors voluntary liquidation process. For more information please refer to our webpages at http://www.companyrescue.co.uk/

GDP Figures Show 0.5% Growth

The latest GDP figures for the 1st Quarter of 2011 for the UK confirm the belief that our economy is beginning to grow again with these latest figures showing 0.5% growth. This is despite the impact of tax rises on pay packets not being felt. This growth is lower than other industrialised economies and so interest rates are likely to remain low for some time. The retail/leisure sector is struggling the most at the moment with a number of high profile collapses.

It is often in periods of growth following a recession that businesses find themselves in difficulty as they start to spend to try and gain some market share and win work despite having low cash reserves.  Also creditors become less forgiving as the economy improves.

We shall have to see what happens. Unfortunately for companies just "seeing what happens " is not really an option. It is important to have a plan, incase you find yourself in difficulty, and so know your options.

The longer you leave it the less options you have, especially if the bank or creditors start legal actions such as winding up petitions.

HMV considering a CVA

Reports over the weekend have indicated that HMV is looking at the possibility of a company voluntary arrangement or CVA to save the business.  Last month Simon Fox, HMV's chief executive, said at a retail industry conference that a CVA was "not an option".

In a statement HMV said: "As is entirely usual and appropriate in current circumstances, the group continues to keep itself fully informed on all of its available options and keeps its contingency plans up to date, among which a CVA may or may not be considered."  KPMG are advising the firm having pushed through the JJB Sports CVA.

It is understood that Alexander Mamut, a Russian oligarch, is reportedly close to buying the Waterstone's book chain in a £35m deal.

We keep reading statements in the press about the process being "controversial" and it allows companies to "stop paying rent on their shops"

These are, of course, generalizations.  In a CVA the landlords will still receive a dividend on the amount they are owed and if the business continues to trade they may have to agree to a reduced rent.  It all depends on how the CVA is constructed.  Landlord's support is usually crucial to any CVA being approved for a retailer but failure to support one will often result in the business going into administration if their financial situation deteriorates.  Administration is likely to have the same result in that shops are likely to be closed, especially if no buyer for the business can be found.

Keith Steven talks to Accountancy Age about CVAs

Keith Steven of KSA was interviewed by Accountancy Age, see here for the article from Accountancy Age which looks at the CVA mechanism.  The CVA mechanism is increasingly being seen as a better alternative to administration to rescue viable businesses.  What is more they can be flexible and fluid to appease the demands of creditors.

Also criticism that CVA's don't work is unfair.  65% of all businesses fail in the first 3 years of trading so it is inevitable that CVA's are not going to have a 100% success rate given that it is a solution applied to business in very serious financial difficulty in the first place.

With the possible demise of pre-packs in future, the CVA should be considered in every case.

Von Essen Hotels Administration

Von Essen Hotels which runs 28 luxury hotels has gone into administration. Administrators at Ernst & Young are trying to find buyers.  The business reportedly had debts of £250m.  Barclays and Lloyds Banking Group reportedly appointed administrators after the five-star hotel group breached a covenant regarding minimum payments of interest.  Banks can appoint an administrator if they hold a qualifying floating charge under new debentures granted after 15th September 2003. If the bank holds an older debenture it can appoint an Administrative Receiver. But it should be pointed out that the administrator has a duty to act in the interests of all creditors not just on behalf of the bank/floating charge holders.

Angela Swarbrick, joint administrator at Ernst & Young, said: "It is business as normal for the hotels and customers of von Essen Hotels can continue to enjoy their stay."  The hotels themselves have not gone into administration. 

Von Essen Hotels employs 40 people and another 1,000 work at the 28 hotels.

Scottish Insolvency Statistics Q4

The number of Scottish companies entering into formal insolvency has increased in the last quarter. 

The Accountant in Bankruptcy received 294 notices of Scottish registered companies becoming insolvent or entering receivership in the fourth quarter of 2010/11. This figure includes 13 receiverships, 199 compulsory liquidations, 82 creditors voluntary liquidations and 56 members voluntary liquidations.  The number of companies becoming insolvent or entering receivership during this period was up by 11 per cent over the previous quarter. This marks a four per cent increase on company insolvencies for the same period of last year.  By contrast in England the insolvency figures are showing a decrease.

Again, this may be due to the fact that there really is no rescue culture in Scotland. CVA's are not usually considered as there is a presumption against allowing the debtor a second chance and there is a mistaken belief that HMRC in Scotland will not support a CVA.  What is more once a winding up petition has been served on a company it is advertised immediately meaning that liquidation is the most likely income.

For more statistics and details insolvency in Scotland and help for Scottish based businesses then please refer to our Scottish rescue page

Silentnight proposes a CVA

Silentnight, the Lancashire bed manufacturer with 1,250 staff has proposed a Company Voluntary Arrangement after its bank withdrew funding facilities and the pension regulator turned down help, given its pension deficit.

The company has its headquarters in Barnoldswick and owns the well known bed brand Sealy.
To January 2010 the company had a turnover of £107m and profit of £243,000.
Neal Mernock, the chief executive, said; "In the absence of a willing commercial banking partner, and after a formal proposal to the Pension Regulator offering an equity stake in the group was declined, a CVA has been deemed the only viable route forward at this time.

The CVA document has been filed by KPMG with the High Court in Manchester. A creditors' meeting has been called for 6 May 2011, where 75% (by value) of the creditors will be required to back the CVA.
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