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KSA Group Sponsors The Turnaround Management Association

KSA Group is proud to announce that they have become Gold Sponsors of the Turnaround Management Association UK Chapter (TMA)

TMA (UK) President, Bryan Green said "I am delighted to welcome KSA Group back into the Association as Gold Sponsors and I am sure the relationship will be mutually beneficial. I am particularly excited about their plans to support the TMA(UK) regions and assure them of our co-operation across the country".

KSA Group will be holding seminars in the TMA regions to help promote the use of company voluntary arrangements and turnaround solutions.

KSA Group MD, Keith Steven, says "I have enjoyed many years of close relations with the TMA (UK) and have worked for, and alongside, many of its members and member firms over the years.

I was pleased to serve on the TMA (UK) board some years ago and have always maintained my personal membership. Now, however, I feel that the time is right for a greater corporate presence and KSA Group looks forward to supporting the TMA across the UK, especially in the regions, and engaging with increasing numbers of operatives within the turnaround space in these challenging economic times."

Negotiations between KSA Group and TMA(UK) have been handled by Jonathan Reeves of Set Up And Go Ltd. Jonathan, himself a TMA (UK) member, will be co-ordinating the UK-wide activities of KSA Group within the TMA.

Clinton Cards could be sold next week

According to reports in Retail Week, the administrators at Zolfo Cooper are aiming to sell the business and remaining stores by, or even before, the 8th of June.  

Given that the total debt owed to American Greetings, who in effect brought in the administrators after buying the debt for £35m remain the front runner.  This is mainly due to the fact that the card chain has been valued at between £10m and £20m.  As such, any other bid would have to be in excess of £35m for American Greetings to step aside.   Bids have been received from Card Factory, WHSmith, and investment funds Endless and OpCapita.  The administrators have said that American Greetings is not the only remaining bidder....

Dominique Schurman, the boss of US greetings cards retailer Schurman Retail Group, which runs the US Papyrus cards chain, has flown to the UK to lead talks with Clinton Cards’ head office team about how it might take the retailer forward if American Greetings secures a deal.

American Greetings are keen to buy Clinton Cards as it would give them access to the UK card market.

Fitness First to propose CVA

Fitness First, the struggling gym operator is expected to put a company voluntary arrangement (CVA) proposal to landlords this week,  which will see it giving back around 67 of its 140 outlets.  It is understood that if the business returns to profitability that the landlords will see a higher return.  This is a simple "profit ratchet" that has been a feature of many of our CVAs. 

Fitness First has struck a deal with its lenders over its £560m debt. The lenders have signed a waiver over its quarterly interest rate bill of £18m but the shareholders will receive nothing and the company will be controlled by its lenders.

This level of debt is very high for a business with only 140 units.  So why is this? 

Well, there is the fact that the company has property leases in expensive locations and all their equipment is on hire.  Lenders quite like to lend in the good times as there is a steady stream of cash from memberships which can service the loan repayments.

Glasgow Rangers CVA Published

The CVA proposal has been published by the administrators, Duff and Phelps today.  The creditors meeting is to be held on the 14th June.  This does not give the creditors much time to consider the proposals. 

For the CVA to be approved, HMRC will need to vote in favour as it is owed a minimum of £14m, which could rise to £79m depending on the outcome of the tax tribunal.  The other major creditor Ticketus is owed £27m.

The CVA if approved by creditors will allow the club to exit from administration and continue to play in the SPL.

However the proposed funds available to unsecured is £5m which represents a small proportion of the total unsecured debt of c. £55m.  Essentially the proposal is offering less than 10p in the pound for unsecured creditors.  However it should be noted that the football creditors; players and other clubs will receive 100p in the £1 as a result of the "football creditors rule".  As a result the return to unsecured creditors is lower than normal for a CVA where the average is nearer 35-40p in the £1.

Dewey Leboeuf UK operations in administration

Dewey & Leboeuf's UK operations have been placed into administration following the largest ever legal collapse.  BDO business restructuring partners Mark Shaw and Shay Bannon have bee appointed joint administrators.  The US based firm went into chapter 11 last night with the partners blaming the "Great Recession" on the company's collapse.  However, they have also admitted that their ambitions for growth coupled with the large packages they paid to senior executives to encourage lateral moves were also to blame. 

The firm had huge debts as it tried to fund its expansion and there balance sheet showed that they had  a deficiency of some $52m (£33m).  90 employees are expected to remain in order to wind the business down. 

The Chapter 11 petition says Dewey expects to pay off its unsecured creditors, a group that includes banks, vendors, and other law firms. In a press release, the firm said the filing was made "to preserve assets and wind down its business in the most orderly and efficient way possible".

Law firms are finding themselves under pressure as corporate activity such as mergers, floats, asset sales etc remains depressed.

If you are a struggling law firm we have specific pages on how we can help law firms that are in financial distress.

Coryton oil refinery to close

Following the collapse into administration of Petroplus earlier this year the Coryton oil refinery is likely to close as the necessary finance to keep it open has not been forthcoming.  No buyer has come forward either.  The refinery needed £625m to keep it open and the closure is likely to lead to 500 job losses.  The refinery provides some 20% of the fuel in London and South East.  However, BP one of its main customers said that there was not going to be any disruption to supply as there were alternative distributors.

The administrators at PwC entered into an arrangement in February which allowed operations to continue at the Coryton refinery while various restructuring and sale options were explored.

However, the administrator said today that due to an “over-supplied” European refinery market any sale or restructure was not going to be possible.

Close to the M25, the 586-acre Coryton refinery was bought by Petroplus from BP for 1.4 billion US dollars (£714.6 million) in June 2007.

The refining market has come under pressure in recent years as operating expenses and the cost of crude oil surge at a greater rate than the value of the products.  This is a big blow for Essex as there are many businesses involved in the supply chain and a loss of many skilled jobs.

If you work at Coryton then read our help for employees page. 

If you supply the business and it looks like this is going to put your business under pressure then give us a call.

Retail administrations in 38% rise in Q1

According to Wilkins Kennedy, the accountancy firm, the number of business that went into administration went up by to 670 in the 1st quarter of 2012 compared to 458 in the last quarter of 2011.  During this time the number of retailers that went in to administration rose by 38%.  Obviously the collapse of Clinton Cards is still fresh in peoples minds but is the high street really in such a bad way.

Looking at the statistics on a year by year basis the following picture emerges:
We have taken our figures direct from the Insolvency Service and the Office of National Statistics.  In the Q1 2011 the number of businesses that went into administration was 782 compared to 779 in Q1 of 2012.  So a fall then!  But yes, there was a big rise in retail administrations from 34 in Q1 2011 to 57. 

So all in all retail is having a tough time but overall the number of businesses falling into administration is not rising.  So which businesses are faring best?  Construction, Transport, restaurants, travel and especially manufacturing have all shown a fall in the number of businesses going into administration.  Manufacturing administrations fell by 36%!

All this is not surprising given our exports are doing well while consumer spending is falling.

Business Debt Advice from KSA Group

Many businesses are doing well despite the recession but all the while they are being held back by an historic debt. The reasons for the debt may have passed and whatever caused the debt may have been rectified. However, the debt still makes its presence felt but making it hard to arrange new finance and generally draining cashflow.

KSA Group can help companies by using rescue techniques such as CVAs, pre-pack administrations, trading administrations. We can also negotiate on your behalf with a time to pay arrangement with HMRC if you can't pay VAT, PAYE and other taxes.

Have a look at our new page on business debt advice which highlights a number of reasons why businesses find themselves in debt and what can be done about it.

If debts mount up it is essential that you take advice from professionals rather than try and borrow more money.

HMRC lose case on football creditor rule

In a blow to HMRC, the High Court has ruled that the "football creditor rule" is not unlawful.  HMRC were trying to overturn the rule whereby the club, managers and players were paid in full in the event of insolvency whereas the other unsecured were often left with nothing.  This breached, in their view, the fundamental principle that unsecured creditors should be treated equally.   Read our pages for more information on the football creditors rule

HMRC have not yet decided if they want to appeal.  This case has been ongoing since last year and had to be delayed pending the outcomes of a couple of cases where the issue of treating creditors fairly was being looked at,  mainly in connection with the collapse of Lehman Brothers.

Is my pub or hotel insolvent?

KSA Group rescue pubs and hotels!

Higher taxes, squeezed spending and variable weather has put pressure on pubs and hotels in recent months. 

Why not read our  "Complete Expert's Guide to Turning Around Your Struggling Pub, Hotel or Inn Business." The guide is over a 100 pages long and provides invaluable advice on your options if your business is in difficulty.

You can download the new guide on our page on how to rescue a pub 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 is it a great rescue tool
  • How to cut costs in your business
  • How to deal with a winding up petition from HMRC.
And lots more
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