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Publisher of Yellow Pages is in administration

Hibu, the publisher of the Yellow Pages, has gone into administration. Previously called Yell Group, Hibu has called upon Deloitte administrators in a bid to save the business from going bust. They have recently agreed to transfer ownership to a holding company as part of a restructuring plan to try and save 12,000 jobs.

The publisher is in debt of £2.3billion and has seen sales fall drastically over the years, largely due to the internet. However, there is still much support behind the publisher and Hibu plans to continue trading while the business moves to a holding company (owned by Hibu's lenders). Hibu assures that there 'will be no impact on Hibu's employees, customers, partners or suppliers.' Back in July, the lenders took control as part of a major restructuring plan to save jobs.

The chairman, Bob Wigley, feels confident that the new digital services and recent marketing campaign will help drive the business forward.

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 you're worried about what might happen in the future, then please listen to the video below as it will tell you your rights as an employee of a insolvent business.  There is a link at the end of the video to the Government website which expands further on what you need to know.

Latest business figures from ONS

Recent statistics from the Office of National Statistics have shown there was a 3.1% increase in new businesses between 2011 and 2012. However, an increase of 25,000 businesses went bust, around 11%.

Perhaps good news for 2012 though: 270,000 businesses were born last year compared to 255,000 businesses that closed.

'The move towards economic recovery has seen birth rates being higher than death rates from 2011, but the gap has narrowed in 2012'.

London had the highest rate for new businesses at 14.8% and also the highest death rate.

This is positive news for the UK economy, with 2013 showing signs of strength across companies and businesses. Those that are struggling to stay afloat do not have to settle with liquidation. There are a number of alternative options to consider, like CVAs, pre-packs and informal agreements with creditors. For more information visit our options page to help you find what's best for your situation.

GP firm, MP Locums, wins two big contracts whilst in a CVA

Who says the CVA doesn't work? Below is a good example of the government backing a struggling organisation:


The clear message here is that a business can still secure on-going contracts (in this case two large ones) whilst in a CVA.

This on the same day that RBS has been criticised for allegedly putting viable businesses into administration....

At least HMRC are commited to the rescue culture!

Could fan-ownership be the answer for struggling football clubs?

According to recent findings by Begbies Traynor, football clubs are facing increasing financial hardship, with 8% of 72 clubs (from the Championship to League two) suffering. The Red Alert Football Distress Report highlights the ‘downward spiral’ of smaller clubs that are unable to attract enough funding to continue going for much longer. Poor attendance and wavering season ticket revenues has contributed to the financial problems.

Partner at Begbies and previous administrator for AFC Bournemouth, Gerald Krasner, believes the way forward is the Community Interest Company model to keep football clubs alive. The income gap between the top and bottom of the league is ever increasing, so the idea of a CIC is thought to be a positive step forward to ensure a club’s future stability.

Darlington FC and Eastbourne are using this company model to lead the way for fan-based ownership in a bid to maintain stable funding and long-term security for the club. Barcelona club is an example of a CIC working well, showing the community model can still bring in big money and increasing interest.
Krasner stated, ‘aside from an overseas benefactor, community ownership is the only viable long- term solution for many clubs.’ Both the government and HMRC are currently supporting this company model which will likely give an incentive for clubs to review their business structure.

A CVA can give struggling football clubs the space and time to revaluate and restructure the business in order to find a suitable way forward as well as protect the club against aggressive creditors. Some clubs have even entered administration before using a CVA. Have a look at our page on football clubs and CVAs for more information.

Web server issues

We apologise that the Company Rescue website is currently down - we will have it back up as soon as we can.

RBS blamed for knocking down failing but viable companies for gain

Vince Cable’s advisor, Lawrence Tomlinson, has revealed publicly what many practitioners already know; that the Royal Bank of Scotland has failed to support distressed but viable companies and is, in certain circumstances, instead using them for profit.

His report claims that the bank’s Global Restructuring Group (GRG) is forcing viable companies to go bust by purposely charging high rates and fees, and then selling off the business assets cheaply to make a profit in its own West Register company.

Lawrence Tomlinson, who works for the Department of Business, Innovation and Skills as an advisor has compiled the damning report and is calling for an investigation by regulators.

The main criticisms and/or complaints were the following practices;

  • Property revaluations without site visits, and mistakes in documentation
  • Property taken over by RBS subsequently sold for a price higher than the bank's own valuation.
  • In one "very clear example" the reasons a business was put into GRG "changes throughout the conversation"
  • One business submitted evidence that in fees alone, their time in GRG had cost them £256,000
  • Small loan breaches forcing companies into much more expensive arrangements, leading to the inevitable collapse.

Business secretary, Vince Cable, has passed the information on to the FCA and PRA to investigate further. The report has been published at the same time as a review (commissioned by RBS) by a former Bank of England’s official, Sir Andrew Large. He looks into issues with SME lending and GRG’s role in the organisation.

RBS have said in a statement, ‘GRG successfully turns around most of the businesses it works with’ but ‘not all businesses that encounter serious financial trouble can be saved.’

Tomlinson believes that small companies are being pushed to the edge, even if they were not struggling to begin with but have faced a few financial problems.

On BBC radio today a hotelier was interviewed who had lost his hotel following a crippling interest rate swap that went bad.  The hotel was sold at a knockdown price to the property investment subsidiary of RBS, West Register.

It is KSA’s view that turning around viable but distressed companies should be the focus of these bank departments, by giving financial support and to help these businesses stay alive, wherever possible.  But if they cannot be kept afloat as is often the case, then any sale of assets forced by administration should not be to the bank’s own companies.

The issue of how finance firms including banks have perhaps exploited struggling but viable businesses has been the topic of much discussion.  See this much publicised issue last year about invoice finance firms.


In addition many banks have assumed that any business that is proposing a company voluntary arrangement (CVA) is such a high risk that they call in the loan.  An agreed CVA does not bind the secured creditor and in many ways put the bank in a better position than previously.  The CVA removes risk of winding up petitions once approved.

The banks still have the ability to enforce their security, but are often don’t give the company the chance to try and trade out of it.

One of our clients asked their MP to question why RBS would not continue to provide a small overdraft to it, once the company had a company voluntary arrangement (CVA) approved by its unsecured creditors.

The RBS Chief Executive of Corporate Banking Chris Sullivan wrote back to Philip Dunne MP, stating that because the company had entered into a CVA it was considered insolvent; “and in line with the Bank’s (sic) policy not to provide banking and debt facilities to insolvent companies, the facilities were withdrawn and proposals for repayment of the debt requested”. Fortunately, we were able to find another funder for the company and it is trading on.

Finally the issue that has yet to be highlighted is the so called “panel system”.  Each bank has its own panel of insolvency practitioners to whom it gives all work.

What is often galling for KSA and other smaller turnaround firms, is that we are often the architects of a viable restructuring plan. The debtor company approaches us for help in cost cutting, financial re-engineering, turnaround and recovery, we set up strategies to do this and work closely with our clients. We then take the business’s rescue plan to the bank’s recovery teams and then we are asked to politely get lost. This is because the banks all operate a so called “panel system”.

Ostensibly this is to ensure “value and quality advice is obtained for the bank” and or the company from regulated approved insolvency firms. In reality the panel firms are doing the company no favours, because they are effectively a bank appointee, whom the company’s board do not want to work with but whom they must pay, because the bank insists upon it.

So to add insult to injury, the directors of a distressed but viable company may engage KSA or other effective insolvency and turnaround firms, to build a workable plan, but as soon as the bank passes the case to GRG or its equivalent across the other banks, the company has a panel firm, whom they have never met, foisted upon the company to drive a recovery.

Recovery for whom? 
Often it’s the bank putting its own interests before the body of all creditors. And giving the resultant insolvency work to their small group of friendly panel firms, before sometimes selling assets to the bank’s own companies.  Clearly secured creditors have fixed charge priorities over other creditors and floating charges to back this up. But the Enterprise Act set out a company rescue culture that is not being supported by West Register and the like.

KSA is not moaning because we want bank work, far from it. Obviously very large insolvency cases such as Lehmans require large insolvency/accountancy practices to cope. But for all other insolvencies we simply want banks to recognise that there are many able recovery and turnaround firms like ours who can work with viable, but struggling companies, to restructure them and their debts. A level playing field is all we ask. We cannot be right or successful in every rescue case, of course, but when we are summarily dismissed and replaced by bank advisors, that is far from a level playing field?

It is our belief that the bank’s insolvency advisory panel system is a closed shop, this is anti-competitive and it is, along with banks recovery teams knocking down viable companies is undermining the UK rescue culture.

Hearts CVA meeting is postponed

Administrators for Hearts football club, BDO, have announced a creditors meeting due to be held today, has been cancelled. Plans to discuss a company voluntary arrangement have been put on hold to allow time to review the situation.

The club is in debt of £28 million and has been in administration for the last five months. Supporters of the club, The Foundation of Hearts, believe that a deal can still be agreed and are supporting administrators for delaying the meeting with creditors. If the club finds a buyer, it could avoid suffering penalties so this extra time (excuse the pun) will give them a chance to consider all options.

A CVA followed by administration can be a suitable solution for distressed clubs and companies, as administrators can protect businesses against aggressive creditors. It also allows enough time for a CVA to be proposed which can take a number of weeks. For more information about how CVAs can work for football clubs, click here.

London Broncos to go into administration

The super league club plans to go into administration, after it was announced they are on the fixtures list for next year. They have called on lawyers to file a Notice of Intention to appoint administrators for the club. It has seen a number of staff and players leave and is still looking for a venue for home games; currently the Broncos have only five players on their books. It’s also been reported that no one employed by the club has been paid their latest monthly salary.

The administrators are to be brought in to protect the Broncos against creditors and to allow the club some time to work with the Rugby Football League. The aim is to resolve the current issues surrounding the club – there are talks of a move to The Hive with the chairman of Barnet FC, however only if the club carries no debts.

If a club becomes insolvent, regulations state they will lose six competition points. If RFL’s review is accepted by clubs, this number could be doubled.

For more information, visit our page on notice of intention and how it can provide companies some breathing space and protection from aggressive creditor actions.

Mywardrobe.com saved by pre-pack administration

Online fashion retailer, Meemi Limited (trading as mywardrobe.com) has been brought out of administration by a pre-pack sale. This result has saved 48 jobs, including a former senior fashion editor at Harpers Bazaar, Carmen Borgonovo.

After on-going poor cashflow and increasing losses, Growth Capital Acquisitions Limited bought the failing business in a pre-pack administration deal. On the 18th November, Leonard Curtis Business Solutions Group were appointed administrators and commented ‘we have completed the sale as a going concern. The outlook for mywardrobe.com is extremely positive’.

The retailer was founded in 2006 by Andrew Curran and has since had a number of cash injections and support to continue trading. However, it eventually ran out of money to continue so administrators were brought in.

Mywardrobe.com is now under a total restructure to accommodate these changes, with the aim to create a successful and profitable business from 2014.

Pre-pack administration

While there is some debate as to whether pre-pack is a suitable insolvency option (as it is often sold back to the directors), it is a very quick process and can get rid of debt, save jobs and allow a business to continue trading.

For more information on pre-pack administration, visit here

Will there be a freeze on business rates?

There is increasing pressure from the media, including The Daily Telegraph, to freeze business rates for small shops and companies across the UK, in a bid to help businesses survive. If approved, rates will be frozen from 2015.

Potentially crippling business rates have now overtaken the cost of renting for shops and companies; they are now urging George Osborne to address this situation next month in the Autumn Statement. Companies want business rates to be frozen to allow time to review the current tax system so appropriate changes can be made.

According to reports, rates have increased by 23% in the last five years with a further 3.2% rise planned for next April. This is not reflective of the rents that many retailers pay since rates are not based on current rental levels post credit crunch.  Retailers believe the tax system is ‘outdated’ and needs to be modified in order to improve the overall economy.

There are also talks of rate cuts in Scotland with an announcement expected to be released over the next few days.

We can help businesses who are falling behind with their business rates, have poor cashflow or are simply in need of insolvency advice. If you’re looking to cut costs in your company, read our guide to cost cutting.

The local council’s business rates are in fact an unsecured debt and as such any arrears can be partly written off in a CVA. Call us on 0800 9700539 and speak to one of our CVA experts.

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