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.

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?

1^st 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. 

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.  

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.”

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.