Principle Leisure Group, the North East bar operator of the Popolos outlets amongst others, has gone into administration and a buyer is being sought by the administrators Andrew Haslam and Gerald Krasner of Begbies Traynor.
The company had a substantial debt to HMRC and it transpired that the company was unable to come to a negotiated timetable to pay the arrears. The administrator said “The outlets are now being operated under licence whilst a purchaser is sought. The process undertaken will, at least in the short term, protect the contracts of over 300 employees and offer the group the best opportunity to identify a purchaser.” He said a number of potential bidders had already come forward for its 10 outlets. Principle Leisure Group had a turnover of £10m and announced plans last year to open a chain of coffee shops.
Could the company have been saved by a CVA?
Depends on the relationship with HMRC. If the business had built up substantial tax liabilities and had not been compliant then HMRC may have threatened to issue a winding up petition. There may not have been enough time to stop any advertisement of the winding up petition in the London Gazette, so a CVA may have been much more difficult (but still doable). This would have led to the bank accounts probably being frozen and the directors start losing control. HMRC's patience is running out with many companies with failed time to pay deals and so if you are running up tax arrears you need to deal with them and take advice.
If you are a leisure industry operator in the North East you can contact our Gateshead office and talk to Eric Walls our National Director of Insolvency. His number is 0191 482 3343. He will be able to advise on what action to take if your business is receiving threats from HMRC or any other creditor for that matter, including your bank.