Travelodge CVA Confirmed

With the recent approval of the company voluntary arrangement (CVA) proposal for Travelodge by its creditors, the firm can now begin to restructure its property portfolio.

A huge part of the problem for the Travelodge was the unrealistic lease agreements within the company and the company voluntary arrangement will allow the business to start building off of firmer ground. 

As an alternative solution to liquidation, a company voluntary arrangement allows a struggling firm to trade on through the successful approval and process of the CVA insolvency tool.

For more information on company voluntary arrangement, company liquidation and other insolvency solutions that are available to you visit www.companydebt.com or call us free on 08000 746 757.

Portsmouth to be sold?

Looks like Portsmouth football club is to be sold off after a deal has been struck by administrators to off-load all of the senior players.

The previous FA Cup winners have been insolvent for some time now and they have been considered many insolvency solutions such as a company voluntary arrangement and voluntary liquidation.

The sale of the club will take place next week, days before the new season starts.

This shows the level of business that can struggle with insolvency, it's not exclusive to small UK limited companies. Businesses of all sizes can come into difficult times. The insolvency solutions are often the same to consider and it all depends on the company's situation as to which one they choose to help them towards their goal.

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HMV announce more losses

HMV have recently announced that they have more losses totalling at around £16.2 million and have also taken out a loan to help support the business in the near future.

The retail music firm has had around a 12% drop in profits compared to last year and the loan they have recently taken out is £4.4 million to try and aid the business' future.

The struggling limited company is trying to trade through the difficult period with a venture into selling hardware products and although a spokesperson has said that sales of the hardware products are on the rise, so far the plan doesn't appear to be doing enough.

I for one would like to see HMV stay on the high street as I believe it is a valuable asset to the UK's retail sector and provides a good selection of attractive products.

Retail has been hit hard as we all know and there are many businesses on the high street facing similar situations but with the added challenge of not being able to borrow money for whatever reason. When a limited company is struggling and is approaching insolvency there are a few solutions that can be selected to help the business to either trade on or close down with the potential for the same director to start afresh with a new company.

Simply closing down with debts to consider may be a situation for voluntary liquidation such as a creditors' voluntary liquidation. Alternatively, if you want to keep on trading with the same legal entity you may want to consider a company voluntary arrangement. More about these solutions can be found at www.companydebt.com.

Could there be trouble for Thomas Cook?

The travel company, Thomas Cook have been struggling for some time. The tour operator firm has just confirmed greater losses in Q2 than they had hoped and is a stark comparison against the profits in 2011.

The total losses for Q2 are said to be £26.5 million. If we compare this against the profits of the same period in 2011 which was around £20.1 million the travel company clearly has cause for concern.

Comparing the same period within a 2 year time frame displays a volatile trend so anything could happen.

They were hoping for sales form their Olympics packages to support them throughout this period, however, sales have been disappointing low.

Many companies are having insolvency difficulties and cash-flow problems at the moment in the UK and deciding which solution to take such as a company voluntary arrangement or biting the bullet and going through a voluntary liquidation can be hard. What sort of solution will Thomas Cook reach for?

A common word mentioned several times when representatives from Thomas Cook have been questioned is 'challenging'.

Let's hope that the travel firm is up to the challenge and comes out stronger on the other side.

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.

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.

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.

Barclays bank makes £2.45 billion profit

In the first #quarter of this year #Barclays made a #profit of around £2.45 billion which is well ahead of their expectations.

#Barclays took a £300m hit to cover payment protection mis-selling claims, which has become a major cost in recent moths for most #banks.

In a bid to deal with the problem, it set aside a £1.3 billion cushion after a rise in #PPI claims.

It said the unexpected success were largely down to the UK's retail #banking division and Barclaycard, which both performed well.

Barclays chief executive Bob Diamond has been criticised over his £17.7 million pay package for 2011, which is expected to come under increased scrutiny at the bank's annual meeting on Friday despite recent moves to subdue a #shareholder rebellion.

Food Companies Struggling:

Premier Foods is one of the lowest-rated financially healthy retail companies in the UK, according to newly compiled research from Company Watch.

The owner of the Hovis and Mr Kipling brands came in with a H-Score of 14 out of 100, which is judged on aspects such as a business’ balance sheets and the prevalence of intangible assets. Premier Foods has also been in Company Watch’s Warning Area consistently for the past five years, with a health rating score of 25 or below.

The analysis is based on each company’s last five years’ published accounts, as processed through the Company Watch H-Score risk assessment model.

The average H-Score across the whole retail manufacturers sample was 52 out of a maximum 100.

Nick Hood, head of external affairs at Company Watch, said: “Our survey highlights the problems facing retail suppliers. They, like the retailers themselves, are suffering a knock-on effect from a fall in consumer confidence and reduced disposable incomes of shoppers. At a time when like-for-like sales are falling and consumers are demanding evermore value for money through deep discounts, retailers are inevitably making most suppliers share the pain.

“The accounts we examined are mainly for periods ending during the latter part of 2010 and early 2011, which means that these figures do not yet reflect fully the upward pressure on manufacturers’ costs from rising energy and commodity prices. Once these feed through, we can expect the financial health of the sector to deteriorate further, with more manufacturing companies falling into our Warning Area and becoming vulnerable to insolvency or restructuring.”

In total, 173 companies (25%) out of 681 of the UK’s largest food, non-alcoholic beverage and clothing manufacturers, were currently in its Warning Area, with health ratings of 25 or below out of 100.

Dairy Crest, producer of Cathedral City cheese, Utterly Butterly and Clover spreads, fell into the Warning Area category after its March 2011 results with an H-Score of 20 and was pushed deeper when its interim figures to September 2011 produced a lower H–Score of 16.

Drinks manufacturer Britvic, owner of the Robinsons, Tango and 7Up brands, also appeared in the Warning Area with a current H-Score of just 17 out of 100 – a financial rating partially driven by the high level of intangible assets, which are almost 15 times the company’s net worth.

Statistics on all UK companies for the past 14 years show that one in four companies in this ‘red danger zone’ have either gone on to file for insolvency or have undergone major financial restructuring.

Insolvency Practitioners Panel:

Jameson Smith & Co have a great panel of Insolvency Practitioners to choose from. We like to provide our clients with the very highest standard of insolvency solutions at a fee that suits. While an Insolvency Practitioner is not always required and would not usually be the first port of call for a Director we have the very best of the bunch working with us! 

Reliability is never an issue with our Insolvency Practitioners and if a Director needs to put a company into liquidation or is considering a Company Voluntary Arrangement to help a company trade they can be sure that we will conduct the entire process sensitively and effectively, using some of the very best Insolvency Practitioners in the UK!

For more information about insolvency solutions call us today.