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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-study/plant-hire-company-in-glasgow-saved-by-cva

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.




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.




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.



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.




 

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.




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-study/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!

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 our case studies below to see how we saved other businesses like this;

http://www.companyrescue.co.uk/case-studies/cva-case-studies
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