Jameson Smith & Co Ltd

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Friday, 29 June 2012

No Buyer as Yet for Clinton Cards...

Over 40 Clinton Cards stores have closed down by the administrators this month. The 43 stores that were closed were part of the 330 store that were not included in the deal confirmed on the 7th June.

Among the stores that have closed are the sites that include Basildon Town Square, the Galleries shopping centre in Bristol, the Glades shopping centre in Bromley, the Liberty II shopping centre in Romford and Wrexham's Regent Street branch.  

A representative at the insolvency practitioners that have been appointed as administrators feels that there is a strong underlying business within Clinton Cards despite the current economic conditions.

Small Business Owners Risk Personal Insolvency

Small business owners tend to risk Personal Insolvency as a consequence of business failure.

Many owners of small companies invest their own money in their business, borrow in their own name (rather than the name of the business) in order to fund the Company or take out a second mortgage.  Draw on personal credit cards to help support the business.

It is important to obtain appropriate advice. There are many routes to structure the Company debts by way of formal insolvency for the Company such as Liquidation, Administration, Company Voluntary Arrangement. At the same time personal indebtedness can be structured by way of Bankruptcy, Individual Voluntary Arrangement.

Thursday, 28 June 2012

Jacobs Cameras Closing Some Stores to Become More Attractive to Potential Buyers

PFF Accountants are managing the administration of Cecil Jacobs and they have confirmed that they are to close several stores in some key areas to help make the business more attractive to potential buyers. some of the areas in which the stores are closing are Birmingham, London, Derby, Hull, Kingston-Upon-Thames, Liverpool and Sheffield.

Around 46 staff are unfortunately heading for redundancy due to the insolvency proceedings, however, this is considered necessary according to the insolvency practitioners if the business is to be sold.

A representative at the insolvency practitioners firm said "These measures are painful for everyone involved, but they are essential if we are to have a reasonable prospect of finding a buyer for the business as a going concern - although we recognise that there are likely to be more challenges ahead".

The camera company has already had a number of potential acquirers who have expressed their interest and are now in a position to start negotiating. It looks likely that Cecil Jacobs is set to avoid liquidation if it can help it.

How Will I Pay My Rent?

1st of July is just around the corner.  For a majority of businesses, this signals that the next quarter rent will fall due. 

At a time of austerity measures and dwindling turnover, a huge bill, however expected, is increasingly becoming a challenge to business.  The problem becomes greater for small businesses fighting for survival.  Many a times have we seen businesses falling short of the rent demand having to come into arrangements with landlords just to keep in business and a place to trade.  When the pressures become too much, these businesses were often pushed into either voluntary insolvency or compulsory insolvency and consider outcomes such as liquidation.

When faced with a large rent demand, businesses should immediately assess their financial opposition and decide their ability to continue.  If they cannot deal with these issues themselves, financial advisors such as ourselves may be able to help.  We have dealt with landlords in various issues and the outcome we seek focus on a beneficial outcome for all parties. 

Wednesday, 27 June 2012

HMRC Responsible for Over 60% of Winding Up Petitions

The HMRC are still responsible for over 60% of all winding up petitions so they are still aggressive and a clear threat to companies struggling with failed time to pay arrangements.

Far too often we get calls from directors who are desperate for help, but who have tried to muddle through and left things to the very last minute. When HMRC are involved and they have decided to issue, or even threaten, a winding up petition you must act immediately. You have a limited time window to respond and act. Few directors fail to realise that once the HMRC have started to pursue a winding up petition they will not stop until your company is successfully put into liquidation, one way or another. The only way HMRC can be stopped is via the Court once the petition has been advertised and this can be very expensive as you will be expected to pay the HMRC legal costs. 

It’s also worth remembering that once advertised your bank account will be frozen and all the company assets are frozen too, so they cannot be sold which can often have disastrous affects if you want to start afresh with a new company. Any creditor can use the same petition to close your company even if you have paid to stop the original petition. We have just had a client come to us seeking help after borrowing a very substantial amount of money from family hoping to stop the petition. Having paid the High Court petition another creditor stepped in and took over the petition but the directors were unable to raise more funds leaving them in an impossible situation.  

17% Drop in the Number of Advertised Winding-Up Petitions

Statistics from the Insolvency Service website indicates that the number of winding up petitions that are being issued and advertised have fallen by around 17%. The Insolvency Service figures show that in April 2011 the number of petitions advertised was 734 but in April 2012 the number  has fallen to 607.  The previous month’s statistics appear to support the view that this is not a ‘one off’ and there does appear to be a downward trend. Does this mean that the UKs companies financial health is picking up and the recession a thing of the past? Whilst this could be an early indicator there is a counter argument that the figures are not consistent enough to give any certainty to a recovery.  

Tuesday, 26 June 2012

Trouble up North?

The UK is having a fairly difficult time currently with economic struggle and insolvency figures have been getting better, however, Yorkshire could do with a helping hand.

Classed as God's Own Country, the historic area could use some divine intervention. Yorkshire has seen come distress in its retail, construction and professional services sectors and recent figures show that things aren't getting any better. The overall business distress rose 17% for the first quarter of 2012 compared to the same time last year. This came as a stark contrast to the national insolvency average dropping.

Despite these troubling statistics the manufacturing sector in the Yorkshire area has been been performing much better with a 55% drop in significant and critical distress, meaning fewer limited companies are having to consider liquidation at the moment in this area.

Leisure & Hospitality Insolvencies up by 8.6%


A report from Credit referencing agency, Experian, on the latest business insolvency figures discovered that there were 151 insolvencies in the sector last month.

This has been blamed on increasing the amount of employees in the business, typically from between 6-10 employees, to up to 25 employees. The business then loses it flexibility it once had as a micro business and its fixed overheads increase. Cash flow becomes increasingly more difficult to keep control of.

The North East, the East, South West and Scotland saw an increase in their insolvency rate from May 2011 to May 2012 with the North East experiencing the highest increase, from 0.9% in 2011 up to 0.14% in 2012.

Yorkshire was the only region that saw its insolvency rate fall from 0.13% in May 2011 to 0.11% last month.  

Interesting Insolvency Case

There was an interesting case today, which was in relation to a lease over a retail premises.

As a result of the current economic climate, the majority of leases which we dealt with have little or no value and usually a liquidator would take steps to disclaim the lease so as to bring any potential liabilities to an end.

Our enquiries revealed that this particular lease had little or no value and steps were being taken to disclaim the lease but just before the documents were posted out, we received a number of calls from various parties interested in acquiring the lease and it now appears that we are not only going to realise additional sums for the benefit of creditors but, this will also enable the landlord of the property to have a tenant willing to continue with the lease and result in him not claiming for future rent arrears and dilapidations and hopefully, one less empty shop on the high street! 

Monday, 25 June 2012

Seaside Suffering

Five out of the 10 local authorities with the highest total individual insolvency rates in 2011 are seaside towns, with Blackpool having an individual insolvency rate of 57.7 per 10,000 adults, approximately double the England and Wales rate.

Other seaside towns that are also having problems include Wansback, Penwith, Torbay and Scarborough. Three of these towns also have an above average percentage of companies at risk of failure.

Penwith, Torbay and Scarborough all have a higher percentage of companies at risk of failure in the next 12 months compared to the national average (21.6%). In Penwith, 24.4% of companies are at risk of failure; this figure rises to 25.2% in Wansbeck and 25.7% in Torbay. Both Blackpool (21.8%) and Scarborough (20.7%) are closer to the national figure.

Although “Staycations” are becoming more popular compared to overseas package holidays, many families can either no longer afford these or are cutting down on spending while away which is significantly impacting seaside resorts.

Lee Manning, R3 President, comments “Many of these areas are still very much reliant on the holiday trade, and are therefore under enormous pressure. Without the boost that tourism gives to local economies, many small local businesses are struggling to stay afloat and this will have an inevitable impact on the finances of those who own, supply to and are employed locally by these businesses.

“We appreciate that individuals are also feeling the pinch, with wages stagnant and the cost of living increasing, but the important thing is to seek help early. We would urge any business or individual who is struggling to make ends meet to seek advice from a regulated professional.”

Friday, 22 June 2012

Struggling to Pay Day - More Month than Money

A new group of debtors who currently pay only interest on their debt and not the debt itself. Hanging on each month cannot be maintained forever. This group will have very few options should interest rates rise or circumstances change. Having a financial buffer is important in weathering periods of difficulty.

Struggling to pay day becomes a regular occurrence. Seeking financial advice should be a priority over short term high interest rates when managing insolvency.

Thursday, 21 June 2012

Insolvency Service drops case to have Farepak directors disqualified


The Insolvency service have abandoned the high court case to take Farepak’s former bosses banned from being company directors.

Farepak, the monthly money saving company, collapsed in 2006 leaving around 116,000 customer out of pocket.

Last month, the insolvency service had taken the case to court to attempt to get the former directors banned from being appointed as company directors in the future.

The Swindon based firm collected money from it’s customers every month, with a view to them being able to purchase food hampers or high street vouchers in time for Christmas.

After one of Farepaks rivals went into administration, suppliers demanded upfront payments rather than the previously agreed credit arrangements, something Farepak were not able to provide. The firm had also built up debts from previous unsuccessful acquisitions.

The former directors named in the High Court case were Stevan Fowler, Neil Gillis, Nicholas Gilodi-Johnson, Stephen Hicks, Michael Johns, Paul Munn, Joanne Ponting, William Rollason and Sir Clive Thompson.

Lawyers for the Insolvency Service said that Farepak had traded at "unreasonable risk".

Lawyers for the former directors, named as Stevan Fowler, neil Gillis, Nicholas Gioldi-Johnson, Stephen Hicks, Michael Johns, Paul Munn, Joanne Ponting, William Rollason and Sir Clive Thompson, however, said that the Insolvency Services evidence “singulary failed’ to establish a case for their disqualification.


SHORT TERM FIXES – DOES IT WORK?

We have seen a lot of short term lenders offering pay day loans to the public.  The main attractiveness of these operators are the quick response and availability of funds to tide individuals over until their next pay packet.

Now, these operators are offering the same to business too.

Short term fixes are not the answer to business in testing times.  Money borrowed today need to be repaid tomorrow, and the only way to manage that is to make cuts and savings – a bad combination in trying to sustain a struggling business.

A formal insolvency route – be it liquidation, voluntary arrangement or Administration may be a more structured way of dealing with financial difficulties.  Instead of struggling to ‘put out fires’ a struggling business should plan and consider formal insolvency and start over.

Learn from past mistakes.  Insolvency is there to give you a second chance.

Wednesday, 20 June 2012

Fitness First creditors approve CVA


A Company Voluntary Arrangement (CVA) proposal for Fitness First has been approved by creditors. The CVA, negotiated by Insolvency Practitioners KPMG will see the leases of the gym chains property portfolio restructured with immediate effect.  

A spokesperson for KPMG said: “We needed over 75% of creditors to agree to the proposal, but as with all CVAs, we also needed 50% of unconnected creditors to approve”.

Luckily, the majority of landlords, being the largest unconnected group of unsecured creditors, voted in favour of the proposal put forward by KPMG.

The deal is expected to generate around 25-35p in the £1 for the landlords, whilst an administration would have provided less than 1p in the £1.

Rogue Scammers Targeting Elderly and Retired for Land Investment Schemes

How venerable are the elderly? How easily targeted can they be? Those that have retired, with good pensions and no extended family can often be fowl prey.

We took on a recent insolvency where approximately 70 investors, all of whom are elderly, were deuced into investing between £20,000 and £150,000 each into what they thought would be a profitable development site.

The land was actually only worth approximately £400,000 and investors have lost approximately £1.5 million.

The elderly have been warned over pressure selling by rogue firm scammers who are targeting older people over the phone. The Insolvency Service said that in the three years to March it closed 78 rogue firms in England and Wales, which had scammed £28m from nearly 2,000 victims.

It said 49 of the 78 rogue companies sold land for "building" that either did not exist or was on protected land. The Insolvency Service said many more scams have not been stopped and warned people to be on their guard and to ask for help.

Tuesday, 19 June 2012

Dragons Den Company Going into Voluntary Liquidation

Crush'n Shade was a hit on the Dragons Den show when it was appeared back in 2007. The company website received 120,000 hits to its website in 48 hours and had a surge of orders and wowed both Deborah Meaden and Peter Jones.

The company went from strength to strength initially until they reached a point where they required support from the banks and it was at this stage that the company had to consider voluntary liquidation.

A representative from the company went on to say "We were supplying some of the largest retailers in the US yet couldn't get finance from banks. That's why we're going into voluntary liquidation.

"We're stocked in Bed Bath & Beyond stores for the fourth year in 600 store, and the order is there for next year. Crush'n Shade was one of the top selling products on Kmart's website and we were in talks to do more.

This highlights yet another example where the banks are refusing to support viable UK companies.

Monday, 18 June 2012

Should HMRC have stepped in sooner over football insolvencies?

The current president of R3, Lee Manning feels that HMRC should have stepped in sooner over the recent football insolvencies saying "HMRC leave it rather late until they bring action".

HMRC have been taking a strong stand against directors neglecting tax arrears recently, however, should they change tactics to become more successful in both collecting tax that is owed and helping the clubs to trade on?

It seems that Mr Manning feels so. 

Ideally HMRC should be getting involved a lot earlier to help save some of these football clubs and successfully collect some of the owed tax.

Portsmouth football club was relegated to league one last year after their administration so other UK football clubs on the edge or knee deep in insolvency should take note for the future and plan ahead.


Friday, 15 June 2012

Portsmouth Football Club Could Enter Liquidation

According to experts Portsmouth Football Club could enter liquidation in as little as five weeks due to the warning signs that are being given-off.

There is a meeting to discuss a possible company voluntary arrangement to help the club trade on, however, a club member said that action needs to be taken straight away so no time is wasted given that they only have another 28 days in which the company voluntary arrangement deal could fall through.

There seems to be a common theme in the football industry recently surrounding liquidation,what with Rangers and Portsmouth. Things are changing for UK football.

Thursday, 14 June 2012

How Insolvency Practitioners Can Help

An insolvency practitioner is necessary if you have a business that is struggling financially and you need to either liquidate it or find some way of helping it to trade on through some sort of statutory payment structure like a company voluntary arrangement.

Generally, directors will visit their accountant as their first port of call when the warning signs are apparent. Normally the accountant will admit that the advice required is outside of their area of expertise and they will automatically refer the client through to a local insolvency practitioner.

In most cases this can be the last thing that the director actually wants without even knowing it. The problem arises when the director seeks advice on how to handle the commercial or personal implications of an insolvency solution such as liquidation or a company voluntary arrangement.

Once engaged, an insolvency practitioner acts in the best interests of the creditors (people/businesses that the director's company owes money to). Naturally, the director may feel like he is getting a raw deal here as what he really wanted is someone to help him personally get out of this sticky situation with minimal complications or implication to them directly.

Unfortunately, insolvency often brings with it all manner of areas that need addressing properly and carefully and while the insolvency practitioner will make sure that the creditors interests are looked after and everything is done as it should, the director may be left feeling a bit lonely and vulnerable as they have no one guiding and protecting them personally throughout the entire process.

Director protection is where we come in. We work closely with the insolvency practitioners and the directors to make sure that successful communication between both parties and congruency is at the forefront of our work.

Creditors can sometimes get a bit aggressive and in some cases they may have good reason as they may be owed a great deal of money and directors may have neglected communication, possibly through fear of what the creditors may say. The insolvency practitioners will not be looking to step in between the directors and the creditors and Jameson Smith & Co effectively act as a barrier between the directors and the creditors controlling all communication between the two sides.

While we protect the directors it leaves the insolvency practitioners to process the insolvency documents and court procedures, communicating with us all the time so we manage the situation from start to finish.

Teesdale has largest increase of personal insolvency

Statistics show that Teesdale had the largest year-on-year increase of individual insolvency this year.

According to the Insolvency Service their research indicated that the reason behind the increase in both forced and voluntary insolvency was due to the knock-on effects of the recession. Even the Citizens advice bureau noted an increase of personal insolvency enquiries coming from the Teesdale area.

The types of insolvency cases have ranged from bankruptcies, debt relief orders and individual voluntary arrangements have all risen over the recent years for the Teesdale area.

According to the Citizens Advice Bureau they expect a further 65% increase on top of the current figures if the trend carries on.

So how can we avoid insolvency? For some the answer may be that it is inevitable, however, with careful forward planning through the use of a personal cash-flow to work out your outgoings and what you have coming in you can put the odds in your favour.

If insolvency is inevitable and it is too late to consider other options then you will want to make sure that you choose a firm that can represent you well and provide you with expert advice to help you get out of the situation as soon as you can. The Citizens Advice Bureau is a fantastic place to start as they provide free advice like ourselves. Although we focus on helping directors and business insolvency, we can always help point you in the right direction and we won't charge you for the time.

Wednesday, 13 June 2012

THE BEAUTIFUL GAME

We are all caught up with “Euro 2012” fever.

The glamour, the excitement and something to take our minds off the economic doom and gloom!

However, British Football has had its share of financial worries over the years. Did you know that from 1984 to-date no less than 56 British teams in various leagues have been subject to some type of insolvency process?

Most have “lived to fight another day” and despite setbacks, the deduction of points and often relegation, they still all remain to this day giving pleasure to generations of their fans.

May be there is a lesson to be learned on the survival through any adversity!

For company insolvency advice contact us to see how we can help you and your company. 

Bradford Travel firm enters Liquidation


Many customers of Gain Travel based in Bradford, have paid for their holidays twice after the travel agency entered into Liquidation.
Customers of the firm say they have been advised that it’s unlikely they will get their money back for any bookings. Gain Travel, based in Wisbey, Bradford, ceased trading on 8th June 2012 blaming current “trading conditions”.

Rushtons - Accountancy firm based in Shipley has placed Gain Travel into liquidation and said a letter would be sent to customers and creditors soon.
Rushtons said they are not able to place a total sum on its level of debt or say if any customers would get either their holiday or money back.

Holdings company for RHS Chelsea Flower Show going into liquidation

The landscaping business was hit hard last year with non-payment issues from other companies and is now having to enter into voluntary liquidation.

The trading arm of the company, however, has been transferred over to Howle Hill Nursery so the liquidation, whilst not convenient is not completely devastating to the group. Peter Dowle, who runs the company said that it was 'painful business as usual'.

Mr Dowle's business has created several high-profile gardens for celebrations such as St George's Day and he also did some landscaping in Trafalgar Square.

Whilst the liquidation may have a temporary impact on the business, we hope to see many more beautiful creations from Mr Dowle at some point in the near future.

Looks like liquidation after-all for Rangers...

After an attempt to process a company voluntary arrangement (CVA) Rangers' proposal has been rejected by HMRC forcing them to go ahead with a voluntary liquidation.

This comes as quite a shock to the club as they were expecting to be able to use a company voluntary arrangement to help them trade on.

The assets of the club may be purchased by Charles Green's consortium in the hope of setting up a newco so the club can start afresh.

Although a pre-pack liquidation and a newco is seriously being considered, it means that the club will not be able to play in Europe for three years and this could mean that they will lose some key players, further damaging the club's position, not only commercially, but also through potentially losing fans.

HMRC were owed more than £21m from Rangers and they were the creditor that pushed the club into administration back in February 2012.

It is said that a spokesperson mentioned that a company voluntary arrangement may have been more constricting than they would have liked and the pre-pack liquidation will allow them to sell the remaining assets of the club to the potential newco, helping them to get a fresh start.

Tuesday, 12 June 2012

Guitar manufacturer goes into liquidation

The guitar maker Avalon Guitars is entering into voluntary liquidation. The firm that is based in Newtownards in Co Down has made guitars for hundreds of performers such as Van Morrison, Eric Clapton, The Corrs, David Gray, and Katie Melua for years.

The liquidation is being dealt with by FPM.

The meeting of creditors will took place around the end of May. The purpose of the meeting is to place the limited company into liquidation.

The factory where the guitars were made used to be visited by some of the big name celebs whilst the production was in motion.


Rangers Football Club CVA Proposal refused by HMRC


Rangers Football club had offered those owed money a reduced payment deal via a Company Voluntary Arrangement, funded by an £8.5m loan from a consortium led by Charles Green. Administrators Duff and Phelps confirmed on Tuesday they now expect HMRC to refuse the proposal at a vote on Thursday afternoon.

Mr. Green said: he was “hugely disappointed” by the rejection of the CVA proposals by HMRC, whose debt currently stands at around £21m in unpaid VAT and PAYE.

Rangers are currently awaiting an outcome to the First Tier Tribunal in a case over the illegal use of an employee benefits trust to pay players and staff between 2001 and 2010 that could result in the club being served with a tax bill of approximately £75m.

HMRC had previously agreed with Duff and Phelps to appoint neutral insolvency firm should Rangers have to be liquidated. This came after the administrators had asked creditors to appoint them as liquidators should the CVA fail.