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.

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.

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. 

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.

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.