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Cavern Walks Shopping Centre owner is in administration

Warner Estate Holdings, the owner of Liverpool’s Cavern Walks shopping centre, has announced that it is to appoint administrators today.  It said that it has suffered as a result of the 2008 financial crash.

"The Board having considered those implications has resolved to appoint administrators from CCW Recovery Solutions, over the Company's business as there no longer remains a reasonable prospect that the Company can avoid insolvent liquidation and the procedure of administration would be in the best interests of creditors as a whole," it said.

The group operates a wholly-owned fund comprising 42 commercial sites as well as units in the Ashtenne Industrial Fund.

Administrators are expected to sell Warner’s asset management business to Hansteen and Warner will sell its 5.3% stake in Ashtenne to Hansteen.

All 95 Warner staff should be able to transfer to Hansteen, the group said today.

This should not have any implications for the shopping centre merely a change of ownership.

Abuse of winding up petition process by unregulated debt collection agencies

Ali Akram of LexLaw has written a good piece on his blog about using a winding up petition as a debt collection tactic being an abuse of process.

He points out that an unregulated debt collector used the winding up petition process to extract payments without really understanding enough about the procedure.

Examples of wrong doing include the following;

  • Not allowing enough time for the debtor to pay the amounts due
  • Not giving sufficient warning of legal action
  • Threatening to publicize the petition which is not in accordance with the regulations i.e. sending a copy to your bank.
  • Adding unreasonable costs to the application to put on further pressure.

Read the whole article here;

The Rise and Fall of RSM Tenon

Amazing isn't it, the seventh largest accountancy and insolvency practice in the UK goes bust, one year, or so, on from finding a massive hole in its published accounts, and there is virtually no fuss?

The bank sweeps away up to £80m (we will never know how much of that debt it recovered), the same bank (Lloyds) then funds Baker Tilly's purchase from pre pack administration of the assets, namely the subsidiary trading companies.

One could say that this is a sign that the bank feels it was a good opportunity to recover some of its exposure, now that growth is picking up in the economy. Perhaps a more cynical observation may be that it is merely rolling over the debt and hoping Baker Tilly management is better than the clowns who led to the collapse of this £200m accountancy firm?

Either way, how many clients will desert the former RSM Tenon? How many will have to go for conflict reasons? How many will stay and accept the new "Baker Tilly Tenon"? Finally, how many new clients will be attracted to this newly enlarged entity?

Will the RSM Tenon staff all be employed? How many duplicated offices will close? Don't tell me they will keep all offices and all employees?

Surely many redundancies on areas of overlap will have to follow? Many have seen the writing on the wall and jumped ship including 7 former midlands corporate finance partners to Mazaars. Watch for more defections and other firms picking up teams.

Is this the end of the consolidator firm?  There is only one such firm left quoted on the (AIM) stock market; Begbies Traynor, which is mainly an insolvency and turnaround firm, and its sales are declining overall.

Or will the accountancy world see more "solvent" mergers to end up with larger and larger monolithic firms?

Author Keith Steven

Insolvencies continue to decline in July 2013

According to Experian compared to July 2012 the insolvency rate for July 2013 has fallen from 0.09% to 0.08% of all registered firms.  There has been a rise however in the number of larger firms i.e 500+ employees but given there are relatively few larger firms failing then one should not pay too much attention to just one months figures.

Regionally the picture is interesting. Scotland maintained its low insolvency rate of 0.03 per cent for the eighth month running. Outside Scotland, companies in Yorkshire saw a drop in insolvencies compared to July last year from 0.11 per cent of the Yorkshire business population to 0.09 per cent – making this the eighth month that the region has seen a year-on-year fall.  A similar drop was seen in the West Midlands, from 0.11 per cent to 0.09 per cent.

Only companies in London and the South East showed a slight rise in their insolvency rate.

By sector shows that construction is seeing better times specifically with its insolvency rate falling from 0.17% to 0.13%

HMV creditors to lose some £250m

The HMV pension fund and a number of other creditors will lose more than £250 million as a result of the entertainment retailer's collapse into administration earlier this year.

The Telegraph has reported that an update from administrators Deloitte shows that bank lenders have recovered £38.6 million from HMV while advisers are set to receive up to £15 million.

However, the newspaper says that Deloitte has warned that HMV’s defined benefit pension scheme, which is entitled to £26 million, and unsecured creditors such as suppliers and landlords, who are owed £157 million, are not expected to receive anything from the administration. It is thought that the pension fund has applied to enter the Pension Protection Fund.

HMV went into administration in January after struggling against tough high street conditions and the rise in internet downloads in recent years. The retailer was subsequently rescued by specialist restructuring firm Hilco.

Montgomery Tomlinson Limited in administration

Montgomery Tomlinson Limited of Flintshire, the curtain and accessories supplier,  has gone into administration with KPMG appointed as administrators.  This follows a collapsed deal to sell the company.

530 redundancies have been made across its 123 department concessions  Also, the salaries for August are not going to be paid.

Wright said, “Despite the tireless efforts of the directors to secure a sale of, or investment in the business over the last four weeks, it has been impossible to find a workable solution to enable the company to continue to trade and they have made the difficult decision to appoint administrators.

“As a result of an increasingly competitive marketplace, a fall in sales left Montgomery Tomlinson critically short of cash and unable to meet its liabilities.

“Given the cash position of the business, unfortunately there are insufficient funds to make payments for August salaries and we will be working as hard as possible to assist employees in their claims to the Redundancy Payments Office.”

Ok, so if you are an employee and would like to know what you are entitled to then read this page on help for employees.  Effectively you will be entitled to arrears of pay, holiday pay and lieu of notice up to a maximum of £450 pw.  You will also receive redundancy as per the statutory limits.

Hearts looks to exit administration via a company voluntary arrangement

The Foundation of Hearts (FoH) have been given preferred bidding status for administration hit Hearts FC.
They aim to use capital raised by the Edinburgh business community to complete the purchase via a company voluntary arrangement (CVA).  So far they have received 6,700 pledges of support.  Hearts owe some £28m.

Bryan Jackson, of BDO, the administrators, commented: "We all still have a lot of work to do to demonstrate to the major creditors that the bid can offer them the best possible outcome. Let's not get carried away - now is the time for everyone to get behind FoH to make this bid work. "This is a positive development but does not guarantee that a CVA will be successful. That will require a considerable combined effort from FOH and BDO to ensure that all interested parties are satisfied.

The Lithuanian investment company UBIG owns 50% of Hearts shares and, until the court makes a decision on the future of the company, no sale of Hearts can be completed.

Any deal to exit administration via a CVA must be agreed with the major creditors of the club

Lithuanian bank Ukio Bankas, itself in administration, is Hearts' other main creditor.

The Edinburgh side started the season with a 15-point deduction due to their insolvency problems, but have managed to pick up four points in their opening three Premiership games.

Interest rates to remain low

The new Governor of the Bank of England, Mark Carney, has caused quite a stir by setting out the conditions that will need to prevail in order for interest rates to rise. Speaking at the Bank’s quarterly Inflation Report he said interest rates would rise "more slowly than market assumes”.

He went on to say;

"In particular, the [interest-rate setting] MPC intends not to raise Bank rate from its current level of 0.5% at least until the Labour Force Survey headline measure of the unemployment rate has fallen to a threshold of 7%."

So given that the current unemployment rate is 7.8% then it is not going to be happening anytime soon. Current estimates put the time taken for the level of unemployment to reach that target at 3 years.  Of course, there are some get outs mentioned over whether rates would remain low such as; "provided this does not entail material risks to either price stability or to financial stability”.  So basically if inflation starts to go out of control then they can increase the rates.

The new benchmarking on interest rates is really a way of providing some certainty for businesses if not the markets.  However, Carney did stress that despite the recent favourable economic statistics and surveys any recovery in the UK economy was still fragile.  He pointed out that productivity was very low and there were still many people "working less than they would like"

What does this mean for the so called "Zombie Companies" only paying interest on the loans but no capital repayments?  Well they probably have more life or should we say death in them yet!

Credit ratings for companies in a CVA

It has always been a problem that companies in a CVA end up without a credit rating.  This is not the same as having a low credit rating they simply aren't rated.  This seems strange as prior to a CVA the company is very likely to have an adverse rating and will be on the brink of collapse under its debts. Following a successful proposal the creditors have agreed to write off some of their debts and hence improve the company's balance sheet.  Surely this would put them in a better position??

Read Keith Steven's article in Credit Today on how to assess the credit rating of a company in a CVA.


KSA Group Insolvency Notices

GB International (UK) Limited

A meeting of the creditors of the above named Company will be held at The Hubworking Centre, 5 Wormwood Street, London, EC2M 1RQ on 14 August 2013 at 12.30 pm

For full details see below notice


Cranston Brown Limited

A Meeting of the Creditors of the above named Company will be held at The Holiday Inn Edinburgh City West, 107 Queensferry Road, Edinburgh, EH4 3HL on 16 August 2013 at 11.15 am

For full details see below notice


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