A guide for redundant employees in administration or insolvency situations

Could Thames Water Go Into Administration?

in A guide for redundant employees in administration or insolvency situations Construction News

Sky news has said that FTI Consulting have been lined up by the government as special administrators should the troubled utility firm not secure the funding it needs. Any appointment would need to be approved by the court thoughPeople are understandably worried that Thames Water might go into administration.  So what does this mean?  First of all the process that it would find itself subject to be something called Special Administration. What is Special Administration? ​​ Similar to ordinary administration, special administration means giving control of the company to administrators who will take steps to turn a company’s situation around if possible – or to wind it down in the most efficient manner.However in a special administration, client assets must be recovered as soon as possible.  Also the running of the company must be done in a way that does not impact the users of the services too much.  This is due to the strategic importance of the company.  As such large banks (Lehman Brothers) energy companies, hospitals, or other national utilities tend to go into a special administration. Special administration is actually run by a court process a bit like Chapter 11 in the USA.  This means the administration can take longer. Why is Thames Water in the news now? Basically there was a deal for KKR (A private equity firm in the US) to inject much needed cash into the company.  However it pulled out today putting the company's future in doubt.​Thames Water chairman Sir Adrian Montague said that while KKR's withdrawal was "disappointing, we continue to believe that a sustainable recapitalisation of the company is in the best interests of all stakeholders and continue to work with our creditors and stakeholders to achieve that goal"."The company will therefore progress discussions on the senior creditors' plan with Ofwat and other stakeholders."Thames Water has a £16bn debt pile.  In any administration the idea is that the business is sold to a buyer.  Obviously in the case of Thames Water the only realistic buyer, if no one is prepared to invest in it, is the Government - meaning nationalisation.In any special administration there will be no interruption to any supplies but there could be job losses.  If you are an employee and worried about what might happen then look at our guide for redundant employees 

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Could Thames Water Go Into Administration?

Moorecraft Pottery Is The Latest Potter To Go Bust

in A guide for redundant employees in administration or insolvency situations What Does Going Into Administration Mean?

The directors of Moorcroft Pottery have announced the firm has ceased trading after over 100 years, resulting in 57 job losses, according to the GMB Union.In a social media post on Wednesday, the Stoke-on-Trent firm said it had appointed Moore Recovery to handle voluntary liquidation. No reason was given, but rising energy costs have been cited by industry sources.In March, Moorcroft had warned of possible redundancies due to higher costs and falling sales. The closure is another hit to Stoke-on-Trent’s pottery sector—known as The Potteries—which received World Craft City Status last year. Its tourism site states: "We are the World Capital of Ceramics."2025 has been a difficult year for the industry. Royal Stafford also went into administration in February. Other closures include Dudson (2019), Wade (2023), and Johnsons Tiles (2024).In March, Moorcroft reported energy costs had risen by £250,000 in two years. Keith Brymer Jones said no business could survive that."It's incredibly sad news," he told BBC Radio Stoke. "We've been crying out for support for the ceramics industry and Stoke-on-Trent as a whole for years. It's never been considered a major industry in this country."Rob Flello of Ceramics UK urged government intervention. "Successive governments have just hammered the UK ceramics industry with things like carbon taxes and a whole raft of other taxes that these cheap imports just don't have to worry about,"* he said.Chris Hoofe of GMB added: "The closure of Moorcroft is devastating news for workers and their families, but unfortunately it's not a surprise."The Department for Business and Trade stated: *"We know this will be a concerning time for Moorcroft Pottery workers and their families... ensuring the industry is globally competitive as part of our Plan for Change."Brymer Jones emphasized the broader impact: "It's 57 families that are connected to those jobs and the surrounding area... We're bloody good at making stuff here... and we literally can't afford to lose this skillset."Moorcroft has operated in Burslem since 1913. Founded in 1897 by William Moorcroft with help from Liberty, the firm gained royal recognition in 1928 and was later featured in the Royal Collection. The brand has also been favored by US presidents and British prime ministers.Royal Doulton went bust earlier this year.  The main driver of this failures is the increased energy costs and the inability of the potters to compete with low cost imports that are not subject to the same costs or environmental controls.

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Moorecraft Pottery Is The Latest Potter To Go Bust

Atlas Leisure Homes Goes Into Administration

in A guide for redundant employees in administration or insolvency situations Manufacturing and Engineering What Does Going Into Administration Mean?

After a period of challenging trading, East Yorkshire caravan manufacturer, Atlas Leisure Homes, has appointed administrators at FRP Advisory and laid off 180 employees.From its base in Hull, Atlas has been manufacturing static caravans and vacation homes for almost 50 years.It recorded turnover of £68.8m in its most recent set of accounts, covering the year ending 30 September 2023, with a pre-tax profit of £69,000.The business, which had a sharp rise in demand during the epidemic and constructed a second manufacturing facility in 2020, had experienced a drop in its order book at a time when operational expenses had skyrocketed.The company has undergone two more reorganisation exercises in the last two years, and the decision to appoint administrators comes after efforts to obtain new financing.With the administrators now assisting staff members with applications to the Redundancy Payments Service, around 180 positions within the company have been eliminated.A few employees have been kept on board to help the administrators conduct a an orderly wind up of the company.“The caravan and holiday homes industry benefitted significantly from the boom in staycations during and after the Covid-19 pandemic.“However, with demand falling away and an influx of new homes having come to the market, operating conditions have become extremely difficult for manufacturers who are contending with the dual challenge of increased costs.“Despite the best efforts of the management team, unfortunately the business was unable to continue trading solvently without new investment.“Regrettably this has meant the loss of a long-standing business and employer in the community.”  stated Mark Hodgett, partner at FRP and co-administrator of Atlas Leisure Homes.However, operating conditions have gotten very tough for producers, who are also facing the simultaneous problem of rising costs, as demand has decreased and a flood of new homes has entered the market."Unfortunately, despite the management team's best efforts, the company could not continue to operate profitably without further funding."Unfortunately, this has resulted in the loss of a long-standing company and employer in the neighbourhood.""We, alongside our competitors, have shared in the market downturn that followed the pandemic in what has been a very challenging few years for everyone in the industry." stated Steven McGawn, managing director of Atlas Leisure Homes."The Board and shareholders had enlisted outside investors to help the business thrive, and we had created a lot of interest in moving the company ahead.But in the end, a solution couldn't be reached, and we regretfully had to put the company into administration."I know a lot of people will look back on our more than 50 years of trading with great pride and fondness, so it is a very disappointing time."

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Atlas Leisure Homes Goes Into Administration

Royal Stafford Pottery Goes Bust

in A guide for redundant employees in administration or insolvency situations What Does Going Into Administration Mean?

Royal Stafford based in the Royal Overhouse Manufactory, one of the oldest pottery factories in Burslem has collapsed into liquidation. The Stoke-on-Trent pottery business employed some 70 people.The Royal Stafford brand was established in 1845 and the firm described itself as one of the handful of potteries with all production taking place in England."This must be a wake-up call for decision makers," said Colin Griffiths, GMB senior organiser. "The loss of Royal Stafford is a huge blow to workers and the entire community here in Stoke."Our city cannot power its kilns with wind and batteries; wishful thinking means spiralling energy costs are now pushing the sector over the edge."Meanwhile the illegal importing of foreign forgeries is out of control and driving down orders even further."Our ceramic and pottery industry is vital for economic growth and supports thousands of jobs across the UK."The time for warm words is over, now we must see action." Why has Royal Stafford gone into liquidation rather than administration? The most probable reason is simply that there was unlikely to be any buyer for the business.  For a company to go into administration the insolvency practitioners have to show that the return to creditors would be better in administration than in liquidation ie "a better result".  Administration can be expensive so there has to be a reasonable prospect of this. 

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Royal Stafford Pottery Goes Bust

Electric Delivery Company Zedify Goes Into Administration

in A guide for redundant employees in administration or insolvency situations What Does Going Into Administration Mean?

Zedify, the UK's largest electric freight bike delivery network, has gone into administration, resulting in the loss of over 100 jobs.Zedify, founded in 2015, provides zero-emission last-mile logistics services to businesses such as high-street stores, package carriers, and independent businesses.The investment came after Zedify received a £5 million funding round in March 2023 from the same investors, including Barclays Sustainable Impact Capital and Mercia, which enabled the company to grow from 113 to 209 people and sign sponsors such as Hello Fresh, Selfridges and Veja.However, despite increased demand for sustainable delivery services, the company was unable to secure enough finance to continue operations. As a result, on January 31, it appointed Interpath's Will Wright and Steve Absolom as Joint Administrators of Outspoken Logistics Limited, also known as Zedify.The company's hubs in Cambridge and Edinburgh remain operational, with 38 staff retained while the Joint Administrators look into future options for these locations. Furthermore, the Bristol hub is run by a separate legal corporation and continues to operate.However, the Joint Administrators have begun an orderly wind-down of the remaining business and have closed seven of the company's trading centres. As a result, 105 individuals have lost their jobs.Ravi Patel of Interpath, who is handling the sale of the company's business and assets, stated: "Zedify was considered a pioneer within the logistics market, being the UK's first cargo bike delivery service with a zero-emission, last-mile delivery model. We are working to explore all options and are seeking buyers for the business and its assets, including its fleet of electric bicycles and their associated intellectual property, as well as the Zedify brand."Steve Absolom, Interpath's Managing Director and Joint Administrator, stated: "We understand news of the company's insolvency will be devastating to its team of employees. We'll endeavour to provide support to those impacted by redundancy, including assisting them with claims to the Redundancy Payments Service."

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Electric Delivery Company Zedify Goes Into Administration

RBG Holdings Rosenblatt Law’s Owners Likely to Go Into Administration

in A guide for redundant employees in administration or insolvency situations Law

The listed owner of Rosenblatt law firm is likely to go into administration after rescue talks failed, the company announced today.RBG Holdings was in talks with its founder and largest shareholder Ian Rosenblatt and another party to resolve its boardroom issue.The board ‘regrettably’ informed the London Stock Exchange today that while talks with Rosenblatt Law Limited, a new firm co-founded by Ian Rosenblatt, were progressing, conversations with the other party had terminated.Considering the company's financial position and the lack of progress on the various strategic options explored, the board believes it is unlikely to secure the funding it needs in a timely manner to secure the company's future and is now taking action to protect value in the business for creditors and other stakeholders.The board proposed a share trading suspension starting this morning.RBG Holdings, which owns London lawyer Memery Crystal, said it continued to trade and had the support of its key creditors earlier this month while exploring balance sheet strengthening alternatives. Even though RBG and Rosenblatt had fought days earlier, talks began with Rosenblatt Law Limited. Rosenblatt claimed the company was insolvent, while RBG terminated his consultant arrangement for ‘offensive actions unbecoming of a solicitor’.RBG was optimistic and indicated it would have enough funds for the foreseeable future if possible purchasers agreed. If its primary creditors cannot agree, the company must quickly pursue alternative financing options.RBG would suffer its ultimate blow if it entered insolvency after four years of boardroom battles and a falling share price. Even after an early post-IPO rally in 2018, when acquisitions pushed shares to 160p. The share price closed yesterday at 0.89p.If you are a struggling law firm then we can help.Read our Lawyer Help Pages

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RBG Holdings Rosenblatt Law’s Owners Likely to Go Into Administration

Quiz Clothing In Administration Rumours

in A guide for redundant employees in administration or insolvency situations News Retail What is a CVA (Company Voluntary Arrangement)?

Update 20th FebruaryIt has been confirmed that Quiz has gone into administraton with the loss of approximately 200 jobs.  23 stores will close.Sky News has reported that Quiz, which is chaired by the former JD Sports chief Peter Cowgill, is lining up Teneo as administrator in a move expected to take place before the end of next week. According to reports, Quiz is purportedly looking to close up to one-third of its stores in order to stabilise its struggling business and reduce costs.The fast fashion chain, which now employs about 1,500 could lose hundreds of jobs as a result of the move, which was lead by the founding Ramzan family.Quiz has hired restructuring specialists at Teneo to investigate its possibilities. Quiz is scheduled to delist from the London Stock Exchange's AIM market and return to private ownership after a shareholder vote earlier this month.Possible actions to help with the closures include a company voluntary arrangement (CVA) or pre-pack administration.A person familiar with the matter told the Telegraph who originally broke the story that "nothing is being ruled out," and that a decision is anticipated in the upcoming weeks.Since taking over as CEO in March 2023, Sheraz has reportedly concentrated on reducing expenses by selling off the chain's underperforming locations.With only £2.3 million in liquidity, including £400,000 in cash reserves and £1.9 million in undrawn banking facilities, Quiz disclosed in the lead-up to Christmas that it was on the verge of going bankrupt.Sheraz's father, Tarak, who started Quiz in 1993 with just one store in Glasgow, gave the business an emergency loan of £1 million last summer. Quiz is now frantically looking for additional finance, probably on harsher conditions, as HSBC is apparently unwilling to continue backing the company.In contrast to its £2.3 million profit the year before, Quiz reported losses of almost £7 million last year. The job of leading the retailer through its turnaround has been placed on chair Peter Cowgill, a former manager of JD Sports.In the upcoming weeks, a formal announcement on the company's future is expected.With Poundland and now Quiz are we going to see a string of retail failures?  At least a CVA gives the company a good chance of continuing to trade

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Quiz Clothing In Administration Rumours

Poundland Likely To Close 100 Shops

in A guide for redundant employees in administration or insolvency situations News Retail What is a CVA (Company Voluntary Arrangement)?

Update 13th JunePoundland has been sold for 1Euro.  It has been announced that investment firm and former Laura Ashley owners Gordon Brothers have taken the chain on.  The company will go into a court approved restructuring process as part of the deal.  This will mean that all class of creditors, secured and unsecured, will be subject to the courts decisions on how much of the debts they will get repaid.  This restructuring is part of the Section 26A of the Companies Act.Part 26A offers the ability to "cram-down" the plan, meaning the plan can be approved even if a dissenting class of creditors or members objects, provided that certain conditions are met (such as demonstrating that dissenting members would not be worse off under the plan than they would be in an alternative scenario). A restructuring plan under the Act is complex and expensive so is really only suitable for much larger businesses.Sky News has reported that Polish-based Pepco Group, which has controlled Poundland since 2016, has recruited AlixPartners, the retail experts, to handle a sales dip that has prompted worries about company's future.  The company operates over 850 sites and employs 18,000 staffLike for like sales were down 7.3% over the crucial Christmas period.AlixPartners is understood to have been formally engaged last week, with options including a company voluntary arrangement (CVA) or restructuring plan said to have been discussed by a range of advisers on a highly preliminary basis.In its trading statement, Pepco said that Poundland had suffered "a more difficult sales environment and consumer backdrop in the UK, alongside margin pressure and an increasingly higher operating cost environment"."We expect that the toughest comparative quarter for Poundland is now behind us - the same quarter last year represented a period prior to the changes made within our clothing and GM [general merchandise] ranges - and therefore, we expect the negative sales performance for Poundland to moderate as we move through the year."​The company is said to be looking at multiple ways to improve its cash position by selling more goods over £1 to expand its range of products.The mere fact that it has been leaked that a company voluntary arrangement (CVA) has been discussed is pertinent.  The reason is because talk of a CVA can be a very useful tool to put pressure on landlords to consider rent reductions.  Under a CVA the retailer can exit leases, at no cost, leaving landlords out of pocket.  To understand a bit more about this please read our CVA and retailers article.Of course it is also likely that the company will come under extra pressure from the increases in minimum wage, NI increases and the loss of 75% business rates relief.Since the cost of living crisis there has been strong competition from other discounters like B&M and Poundstretcher.  Poundstretcher themselves used a CVA to reduce costs. They exited in 2022 paying just 12p in the £1 to its unsecured creditorsIf such a big retailer were to fail this would send shockwaves through the sector and would be a political headache for the Labour Government.​​

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Poundland Likely To Close 100 Shops

Edinburgh Based Hickory Goes Into Administration

in A guide for redundant employees in administration or insolvency situations Hospitality

Hickory, a Scottish catering and hospitality firm, has gone into administration, with a 100 Jobs at risk.Hickory, a restaurant founded in 2012 in Edinburgh, caters for special occasions including weddings and private and business gatherings. Additionally, it serves festivals like the Scottish Open, Borders Book Festival, and Royal Highland Show.The company entered administration on November 20th, according to documents filed with Companies House. Opus Restructuring & Insolvency has been appointed, and Mark Harper and Charles Turner are currently investigating the options available to Hickory and its creditors.Like many other hospitality businesses the company has had difficulty recovering from the lockdowns in the UK during the Covid pandemic. According to its most recent records submitted to Companies House, the company had an average of 142 employees in 2023.As a result, there was a period of weak trading and margins, and working capital was severely strained. This resulted from the cost of living crises, rising interest rates, and inflation.Last year's turnover was £5.6 million, however a number of cash flow issues led to the decision to hire administrators.In its most recent financial statements, Hickory reported that its debtors owed £2.5 million within a year, up from £1 million the year before. The amount of trade creditors increased from £560,000 to £1.1 million.Harper said: “We are working closely with the directors and a number of stakeholders to ensure continuity of the forthcoming events.” This includes weddings, charity balls and staff parties.The hospitality industry is reeling from the aftershocks of the pandemic and the war in Ukraine. The latest rises for employers national insurance has meant confidence in the industry is at a low ebb.

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Edinburgh Based Hickory Goes Into Administration

Typhoo Tea In Administration Threat

in A guide for redundant employees in administration or insolvency situations Notice of Intention to Appoint Administrators

One of the Britain's oldest tea companies has filed an intention to appoint administrators in the court. This follows a very difficult year with sales falling and an expensive break in at one of its factories.  Sales fell from £38m to £25m in 2023 and it had to take an exception cost of £24m relating to the damage of stock and equipment following the break in. The company was founded in 1903 by grocer John Sumner and was at one time the best selling tea brand in the UK. It should be noted that the intention to appoint administrators is a way of protecting the company from aggressive creditor actions, such as winding up petitions.  It gives the company protection for 10 days whilst it tries to rescue the business.  This might be additional finance or a sale.  EY is named as the possible administrator and will be looking at the options. Private equity firm Zetland Capital has been the company’s majority shareholder since 2021. Typhoo’s debts stood at £73m at the end of September 2023, compared to £53m a year earlier. According to the company's accounts it has made losses in excess of £40m every year since 2019.     

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Typhoo Tea In Administration Threat

Stapleford Park Hotel Goes Into Liquidation

in A guide for redundant employees in administration or insolvency situations What Does Going Into Administration Mean?

Following the collapse of the wedding venue, Stapleford Park Hotel in Leicestershire,  90 jobs have been lost and all reservations and events cancelled.It was confirmed on Thursday that Leonard Curtis had been appointed as Stapleford Park Limited's liquidator.The Grade-I listed property near Melton Mowbray was not owned by the hotel company, according to the firm, and its future "remains uncertain at this stage."Following the venue's closing, which featured superstars including the late US pop sensation Michael Jackson, 92 employees were laid off."Our priority was to ensure the most orderly wind-down of trading possible," stated Alex Cadwallader of Leonard Curtis, who was named a joint liquidator with Neil Bennett.Alex said; “Significant efforts were made to communicate with and re-locate the guests that were staying at the hotel, which was at approximately 50% occupancy.“Leonard Curtis attended the site and worked closely with front of house staff to make this possible, and the wider group also met some essential costs to limit the impact on guests and future bookings.“However, we fully appreciate that some guests will have been adversely impacted.”The Grade-I listed mansion is surrounded by 500 acres of parkland and 48 guest rooms.The hotel's management "was unable to generate the turnover required," according to the liquidator, "despite efforts to reach profitability." 

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Stapleford Park Hotel Goes Into Liquidation
hypersonic plane

Reaction Engines Goes Into Administration

in A guide for redundant employees in administration or insolvency situations What Does Going Into Administration Mean?

​​Reaction Engines, a company working on a hybrid rocket engine that will allow for hypersonic flying, submitted a notice of intention to appoint administrators. The administration will be managed by PwC restructuring specialists.The company was dubbed as being able to launch the "next Concorde" but now 173 of the 208 staff have been made redundant.In a statement PwC said [Reaction Engines] had been “pursuing opportunities to raise further funds, but unfortunately, these attempts were unsuccessful”.Sarah O’Toole, joint administrator and partner at PwC, said: “It’s with great sadness that a pioneering company with a 35-year history of spearheading aerospace innovation has unfortunately been unable to raise the funding required to continue operations.”The Oxfordshire business had been negotiating for a financial lifeline with its shareholders, notably the Strategic Development Fund of the United Arab Emirates.It was hoped that Sabre, the hybrid jet and rocket engine being developed by Reaction Engines, could have allowed hypersonic spacecraft to travel from Britain to Australia in as little as four hours.Reaction's Sabre technology, short for Synergetic Air Breathing Rocket Engine, was first developed in 1989.The company has received several government subsidies in addition to investments from BAE Systems and Rolls-Royce. But it also consumed tens of millions of pounds annually.Last year, the business raised £40 million from investors, including those in the United Arab Emirates, increasing its total capital to almost £150 million.The most recent financial statements show that Reaction's yearly losses in 2022 increased from £18.4 million to £25.7 million, while its sales decreased from £7.2 million to £4.7 million.

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Reaction Engines Goes Into Administration