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Two new CVA case studies

This first case study had a CVA approved with the help of a very understanding landlord who agreed to the surrender of the lease straight away.


The second case study shows how difficult it can be sometimes to get a CVA approved by HMRC. We managed to eventually get it approved, however it came with strict provisos which the director could not adhere to.


Construction group, Mike Stacey Limited, is in administration

UPDATE - 14th May 2014: West Country Guns has been bought out of administration by Shaun Stacey and will trade under the name West Country Guns.  

Trading as Stacey Construction and West Country Guns, the 47 year old group fell into administration on Thursday (24th April) due to cashflow problems.

Specialising in the construction of petrol stations, the Somerset-based company appointed joint administrators, Simon Thomas and Nicholas O’Reilly of Moorfields Corporate Recovery. The company ceased to trade last week, leading to 60 redundancies.

Administrators are currently seeking a buyer for the West Country Guns division, a retailer of new and used guns.

Joint administrator, O’Reilly, commented, “The former director [Shaun Stacey] has stated that he hopes to buy part of the business to continue the specialism in building petrol and service stations. We will be in discussions with him and any other interested parties about selling this division to raise further cash for creditors.” Mike Stacey, his father, owns 51% of the business, while Shaun owns 49%.

Turnover for the 12-month period ending July 2012 was £9.8million, down from £16.9million the year before. It’s believed the drop was due to large contracts finishing over the year.

We are not involved in the administration and questions should be directed to Moorfields who are handling the administration.

If you are an employee of the business, please listen to the video below as it will tell you your rights as an employee of an 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.

Liquidations on the rise in 2014

Latest statistics from the Insolvency Service show compulsory liquidations increased by 53.1% in the first quarter of 2014 compared to the third quarter of 2013 (a total of 1,072 down to 700). However, these figures could be seen as misleading as they represent the quietest period of the year compared to one of the busiest quarters from January to March.

The fact that compulsory liquidations are on the rise suggests HMRC and trade creditors are getting tougher on insolvent businesses. Interestingly, the number of Creditors Voluntary Liquidations (CVLs) fell by 7.1% since the previous quarter, but compared to Q1 last year, statistics show they have increased by 2.9%.

Looking at all other insolvencies (which includes administrations, receiverships and CVAs), there has been a reported fall of 2.8% on the same quarter last year. The number of administrations has slightly increased but CVAs have stayed at the same rate. The most noticeable change is the rise in liquidations.

In the 12 months leading to the end of the first quarter of 2014, the highest number of company liquidations occurred in the construction industry, followed by retail and wholesale sectors.

A reason for the rise in liquidations could be due to the slump in sales at the start of the year as well as perhaps poor sales results after the festive period.

Overall, including the compulsory liquidations statistics, UK corporate insolvency volume have risen year on year by around 3.3% versus 2013. So much more modest than the headline but still higher than a year ago.

The Gherkin goes into receivership

The famous London landmark (built in 2004) is likely to be auctioned off as the building was placed into receivership earlier this week.

The skyscraper, formerly known as 30 St Mary's Axe, is co-owned by the German company, IVG Immobilien, which became insolvent last year. During the recession, debt began to pile up due to high interest rates and changing currency value against the pound. Phil Bowers and Neville Khan of Deloitte were appointed receivers on Thursday by IVG's creditors to assist with the sale of the iconic building.

With the recovering market, it's believed a sale will take place within the next few months. The private equity firm co-owner, Evans Randall, had wanted to own more of the skyscraper but had been unable to agree a suitable solution with IVG due to the complex circumstances. Possible buyers now include, Ping An, a Chinese insurance company.

Joint Receiver, Neville Khan, stated, "The senior lenders were reluctant to appoint a Receiver but felt they had no choice due to the ongoing defaults, which have remained uncured for over five years, and concerns that the borrowers’ lack of equity in the transaction had caused their incentives to become misaligned with the Lender".

"The Gherkin is a truly exceptional building, a landmark recognised around the globe. Our priority is to preserve the value of this asset".

"We are in the process of communicating with all tenants and working with the property manager to ensure the continuation of all property management services with no interruption to tenants."

The Gherkin was placed into receivership (relating to the Law of Property Act) which is the equivalent of having the building repossessed by its creditors, as IVG could no longer keep its stake of the building.

Planned tube strikes

With tube strikes set to go ahead over the next two weeks (5 days of strikes in total), businesses in and around London could be pushed to the edge - so act now if you think your business might be in trouble.

Hopefully, the strikes will be called off before they can cause disruption but if not, talk to us if you need advice on cashflow and rescue options.

Take our insolvency test if you're worried your business is insolvent: www.companyrescue.co.uk/company-rescue/guides/insolvency-test

Don't wait until you're already in debt and creditors are threatening legal actions - if you're worried, act now!

Half of SMEs have problems with cashflow

According to Bibby Financial Services’ (BFS) most recent report, Livelihood businesses in the UK, half of the smallest businesses in the UK (with fewer than nine employees) have struggled with cashflow and bad debt over the last year.

Chief Executive, David Postings, of BFS commented, “Already this year, we have seen signs of economic recovery but it’s imperative that small businesses review their sources of finance so that they have working capital to help fulfil orders and continue to pay staff”.

Reduced supplier payment terms, falling margins and ‘bad debt’ are the top three issues faced by SMEs.

Controlling cashflow is vitally important for any business so it’s useful to have a daily template which ensures you know exactly what goes in and out of the company. That, together with cost-cutting and managing debtor collection, can help improve your company’s cashflow. Read our page on company cashflow problems for more tips and advice as well as a free cashflow template.

Happy Easter!

The KSA team would like to wish everyone a happy Easter and a relaxing long weekend!

Albemarle & Bond bought out of administration

The UK pawnbroker has been bought by former Chief Executive of the Bank of Scotland, Sir Peter Burt, as part of an investment group, led by Promethean Investments.

PwC have been handling the administration of the PLC since the end of March, when lenders could no longer back the business and the pawnbroker admitted it couldn't pay the £51 million debt owed.

Over 600 jobs have been rescued with the take over of 128 branches. The remaining 59 stores will likely close, leaving 181 jobs at risk. However it has been suggested staff will be transferred to the other stores.

Joint administrator, Mike Jarvis, commented "The deal announced today was the best offer received, preserving the most jobs and keeping the most stores open. All 120,000 pledged items remain safe and available for the customers to redeem".

Overall, good news for Albemarle & Bond. With the recent struggle and fall in gold prices, perhaps it's best they now refocus on pawnbroking and steer clear of buying and selling gold.

Inflation rate falls to 1.6%, lowest since 2009

According to the Office of National Statistics, the inflation rate (measured by the Consumer Price Index) fell from 1.7% in February to 1.6% in March, still well below the government's target of 2%. It's the lowest rate since 2009 and has been falling consistently over the last few months.

The Retail Price Index (RPI) fell from 2.7% to 2.5% due to the 'smaller rise' in clothing prices. The gap between wages and prices is continuing to narrow, indicating consumer power is coming back, which can only be a good thing for retailers. Will the fall in inflation continue?

West Cornwall Pasty Co in pre-pack deal

Pie seller, West Cornwall Pasty Co, entered administration on Friday 11th April and was shortly afterwards sold in a pre-pack deal by private equity firm, Enact - saving 274 jobs. Read more in our news piece below:


If you are an employee of the company, direct your queries to PwC, who are handling the pre-pack administration. For employees rights' in insolvency, check out our video below:

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