Author: Guy Thomas Earlier today, The Times Online reported on the Vantis Group’s interim results. Particular emphasis has been placed on the impact of the firm’s involvement in the Liquidation of Stamford International Bank Limited. Insolvency Practitioners (and their lawyers) face a difficult assessment when approaching a new appointment. Contrary to the widely held assumptions of many media and professional commentators; the acceptance of an appointment by an insolvency practitioner carries significant responsibility and potentially huge liability. As well as personal liability for many of their actions, the insolvency practitioner must also assess the cost /benefit of funding future litigation. As indicated in the above article, one of these factors is (when faced with significant opposition from a competing stakeholder with very deep pockets) how long will it be before there is likely to be sufficient realisation for the creditors and the insolvency estate. In this case, the ongoing tussle between the US Court appointed Receiver and Antiguan Court appointed Liquidators has spawned multiple and complex litigation across the globe. It should go with out saying that such complex international litigation can be costly. In this case, it appears the US Court appointed receiver has rigorously sought to oppose the Antiguan appointed liquidators attempts to realise assets at almost every turn. In addition to the obvious point concerning the management of cash flow inherent in any business, this also serves to illustrate a useful lesson for creditors and stakeholders in any formal insolvency process. Contrary to popular belief, all formal insolvency processes are subject to potential review by the Courts, stakeholders and creditors. Expert advice should always be sought, particularly where significant amounts are involved and again, as with any other business, litigation is often the backdrop to ongoing negotiation between the parties.
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The challenge of insolvency: Vantis and Stamford International Bank
Author: Guy Thomas Earlier this week, Brendan Guilfoyle, Chris White and John Russell of the P & A Partnership (an insolvency firm based in Sheffield) were appointed administrators of Crystal Palace FC. This has been well reported over the last couple of days by BBC online - click here to view . …and football fans should expect more of this type of response from the directors of struggling football clubs. Directors of struggling companies facing likely insolvency must also take into account the interests of creditors as well as their shareholders. Other stakeholders such as fans without a direct financial interest in the company often feel they are left behind by such choices. Football clubs and the directors that run them are no different to other companies in having to strike that balance. The expectation on people who have financially supported clubs through tough times to “dig deeper” can be overwhelming. As Brendan Guilfoyle, one of Crystal Palaces administrators said earlier this week, “This club has been in the spotlight for some months with creditors pressing for payments and players anxious about their wages.” He went on to explain that “Our role now is to find a buyer quickly to provide certainty for the employees, players and fans for the future. We are hoping our appointment will be short-lived as we understand there are many interested buyers.” Crystal Palace reportedly has debts of circa. £30 million. They had been listed to appear in court on January 27th to face a winding-up petition from HM Revenue and Customs over a seven figure (unpaid) tax bill. By happy coincidence, Brendan Guilfoyle a former National President of R3 (the insolvency industries professional body) had recently published a cautionary article on recent developments in “football administrations” . Whether you are a football fan or a company director of a business unconnected to football, it makes for an interesting read and I thoroughly recommend it as an insight into the running of a ongoing trading company (such as a football club) by an administrator. Please click here to view Brendan Guilfoyle’s article.
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Football Club Blues: Crystal Palace FC Enters Administration
Author: Guy Thomas Yesterday the BBC broke news of the latest claims against Portsmouth Football Club. This week it’s Sol Campbell, the short lived Notts County player who was also recently reported as having signed a new deal with Arsenal FC. Click here to view the article on the BBC. Football clubs are no different to any other businesses in the need to keep a tight rein on their finances during a recession.What is “different” about them is the intense and sometimes intrusive public scrutiny that they are under compared to other companies of similar turnover. This scrutiny applies double if the team is not perceived to be performing on the pitch or the choices of the management are not supported by the fans. “Increasingly, matters off the pitch are taking centre stage in the media’s mind as they seek to tell the full story of what is taking place on it” says Paul McGoohan, Sports Director of Square1 Consulting , who have advised a number of Premier League and Championship Clubs. “The media’s thirst for information and the emotive subject matter mean that is essential for executives to get the right message into the public domain. Good legal and communications advice can help club executives in successfully managing this process and ultimately assist in not losing the public battle.” I agree with Paul’s points above; It is a truism of a financial downturn that when a company is perceived to be “in trouble” that its troubles are doubled. It is for this reason that football clubs and their stakeholders routinely employ PR consultants to work alongside their legal team during difficult times. My top tips (below) can apply to Football Clubs, but are also transferable to any business: 1. Communicate with stakeholders and creditors concisely and accurately. 2. Don’t hide - its not going away and may get worse if you do nothing. 3. Keep on top of the “message”; if you lose control of it then you risk losing your company’s goodwill and hard fought business relationships. 4. Take advice to address the root problems. Good communications can only buy you time. Use the time wisely to address the problems behind the immediate crisis. 5. Act quickly – try to get your message in before the rumours start. Efficient communications with stakeholders and creditors engenders trust and can provide a useful foundation when the time comes to implement solutions and take your company forward.
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Football Finances: Why legal advice and PR go hand in hand
Author: Chris Cook In an article on the BBC this week, it has been found by a team of Manchester University researchers, as part of an Occupational Medicine survey, that only one in 20 doctors is following Government guidance on how long patients should be signed off work. The research focused on 113 GPs operating in one health trust in England and reviewed practices when dealing with hernia repairs, hysterectomies and heart attacks. In spite of national guidance, it was found that there is a huge variation as to the length of time that employees are signed off for similar conditions. Most doctors surveyed had not received training in respect of sickness certification and a third of the doctors were unaware of the Government guidance on recommended sick leave periods, which are set out on the Department of Work and Pensions website . The study leader, Dr Richard Roope, commented that “We need to get across to GPs and patients alike that ‘being signed off’ may actually be bad for the health of the patient, their employer and the country as a whole”. In light of the recent swine flu epidemic, it is particularly important for employers to be able to rely upon the guidance provided by their employees’ doctors so as to ensure an adequate workforce over the festive period. This recent survey suggests a clear lack of training on how long employees need to recuperate before returning to work, leading to a large number of inconsistencies in the recommendations given by doctors. Employers are advised to consider using the services of occupational health or alternatively external consultants if they have any doubts as to the views of employees’ doctors on the issue of when any such employee will be able to return to work. New “fit note” scheme As some of you will be aware, the Government is proposing to replace sick notes with “fit notes”, which will involve doctors needing to set out what an employee is able to do. It remains to be seen whether the introduction of the proposed new “fit note” scheme will focus doctors’ minds on giving employers more accurate guidance on return to work dates, and perhaps more importantly give recommendations on what can be done to facilitate an earlier rehabilitation to work.
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According to University Survey: Doctor’s are not following sick note guidance…
Author: Gary Dunger I’m sure you have all been eagerly anticipating the report on the Willow Foundation 10K run and our runners’ performances! In very testing conditions everybody put in a very good performance and despite survival being the main aim, some very creditable times were put in, especially considering that by the end of the race the surface was becoming somewhat slippery (being partly run on grass) and into driving rain, wind and hail. A special mention must go to Nat Young whom it seems must have been training very hard over the last few months as he went off like the proverbial hare, only to be reeled in by Terence two-thirds of the way in with Terence coming in first of the SA Law runners. The finishing order on Sunday was: Terence Ritchie 46.36 Gary Dunger 47.03 Nat Young 47.06 Rob Ryall 52.12 Chris Alexander 57.54 Simon Walsh 58.23 Tracy Lacey-Smith 59.09 Nikki Petken 65.36 I am sure you will all join me in congratulating all those who participated, and many of whom are no doubt now saying “never again” after the experience. For a full (humorous) account by another participant of the challenges yesterday see the RunningAmok blog . And it is not too late of course to sponsor the team, visit www.justgiving.com/SALaw , it would be great to reach £1000!
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The Willow Foundation - 10K Run
Author: Guy Thomas “Moaners” who “lived in unrealistic Disneyland”. In typical headline-grabbing style, Alan Sugar, Lord of the Fired, Business Guru and government Enterprise Champion, was recently reported in The Times laying into owners of small businesses who have been blaming banks for their difficulties. It is unsurprising that his comments, made when speaking to a delegation of 300 small and medium business owners in Manchester, have come under fire from the Federation of Small Businesses, Politicians and business owners themselves. It’s too early to tell if this “kick up the backside” style of motivation has had an effect on how these firms will approach their banks in the future, or how owners of small businesses will feel about Alan Sugar’s comments, but I can tell you that it is not a balanced view of the situation. It can be argued that Sugar is simply out of touch with the SME market . Through our involvement with a variety of business clinics, we see many viable small businesses befuddled by lending practices and unclear on the right formats and accounting information that the banks require. In this climate it should be a priority of the banks and the government to educate small business borrowers in the mechanics and realities of business loans and what funding options are available. Business Link plays a very positive part in meeting this need for education, as do some banks, but more can and should be done to encourage small business borrowers to be both smarter and more effective advocates for their businesses. Of course, there will always be firms that are too high risk to be safely lent to, and it would of course be irresponsible of the banks to do so. But there is a large number of the small businesses and start ups that we encounter and advise that are run by passionate, driven and motivated individuals, who have, for the most part, sound business plans and a solid offering. Many of the businesses we are seeing aren’t going to their banks in need of a ‘life-raft’ or because they are bust or have mis-managed their business. They are going to the banks for financial support to fulfil orders, for a quick injection of cash that will allow them to eventually grow their businesses and are on balance a good long term investment. Alan Sugar also comments “I hate the use of this word cashflow in the sense in that it is a business problem”. What he is perhaps failing to understand is that “cashflow” in this economy is a business problem originated by issues in the supply chain and customer network, opposed to financial miss management. We are advising our clients to deal with these issue in their supply chain and customer network head-on, by making sure they have contracts in place and that they are enforceable. We are also advocating that our client be “customer careful” and really get to know their customer base. But not simply as a way of strengthening their relationship or for business development but as part of their risk management strategy. By gaining a clear understanding of which organisations your customers supply and are dealing with allows you to expose potential areas of danger in your wider network. So would many of these “moaners” be better off in insolvency as Sugar a ledges? Well, insolvency is, and always should be the last resort. We have a large SME client-base, and have seen more recently an increase in insolvent businesses and even more “tittering on the brink”. The key to avoiding insolvency is to take action immediately, as soon as you feel their might be a problem. By working together with your Accountant and your Lawyer there are usually reasonable alternatives to simply “going bust” . No doubt Lord Sugar intended his comments to motivate as well as admonish, it’s just a shame he has chosen, on this occasion, not to act as more of an advocate for small businesses, after all the SME account for 99.9% of all enterprise in the UK.
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Small Business in ‘Disneyland’…
Author: Chris Alexander First Quench Retailing Limited, owner of Threshers, Haddows, the Local and Wine Rack brands has gone into administration. With around 1,300 outlets nationwide there will be many nervous landlords concerned about what administration means for them and their rental income. Tenant insolvency is an increasing phenomenon as the difficult economic conditions persist. The recession is impacting upon businesses of all sectors occupying every type of commercial premises. Alongside employment costs, rent is a large item of a businesses expenditure and can be one of the first expenses a struggling tenant will default on. Once a tenant enters into a formal insolvency procedure, whether it be administration an IVA/CVA, receivership, or liquidation a landlord is likely to loose out financially to some extent along with the other creditors (unless they can rely on a personal guarantees or other similar security). Formal tenant insolvency can also complicate attempts to urgently recover possession of a property from a defaulting tenant, thereby frustrating attempts to re-let the property and preserve the rental income. It is prudent for landlords to maintain a close relationship with their tenants and not to allow significant arrears to accumulate. This is because once an insolvency procedure has been initiated, in many cases, there will be a moratorium on enforcement action which will prevent a landlord from taking any form of enforcement action against the tenant (generally without permission of either the Court or an insolvency practitioner). Such delays can prove even more expensive for landlords who are already facing significant rent arrears. We would always encourage landlord’s to take advice at an early stage before their options begin to narrow.
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With First Quench Retailing in administration what can Landlords do to protect themselves from insolvent tenants
Prison Population Projections
The Ministry of Justice has published a prison population projection up to June 2015:
- This bulletin presents projections of the prison population in England and Wales from September 2008 to June 2015. The projections are based on assumptions about future criminal justice trends (e.g. sentencing) and incorporate the anticipated impacts of policy and process initiatives that have agreed implementation timetables.
- Three scenarios (High, Medium and Low) have been projected based on assumptions about future sentencing trends. The Medium scenario assumes no increases or decreases in custody rates or determinate sentence lengths. The High/Low scenarios reflect a 1% per annum increase/decrease in custody rates and a 0.5% per annum increase/decrease in the average (determinate) custodial sentence lengths. Other impacts included in the projections, such as those of legislation and processes, are applied equally to all scenarios.
- Projected prison populations for the three scenarios are given in Table 1. By the end of June 2015 the demand for prison spaces is projected to increase to between 83,400 and 95,800.
- The assumptions informing the projection, and therefore the projections themselves, are subject to considerable uncertainty. This is represented by the three scenarios, with each scenario being only as likely as the assumptions that inform it. While these assumptions are based on extensive consultation, and emerging data on them are being monitored, the department does not know yet which one is most likely to occur in future. They do not include impacts for any future measures for which implementation timetables are not yet known, or measures for which the effect cannot be projected with reasonable confidence.
Courtesy: criminalsolicitor.net/newsletter.asp
Andy Bolton
Solicitors in the UK | Compensation Solicitors
Prison Population Projections
The Ministry of Justice has published a prison population projection up to June 2015:
- This bulletin presents projections of the prison population in England and Wales from September 2008 to June 2015. The projections are based on assumptions about future criminal justice trends (e.g. sentencing) and incorporate the anticipated impacts of policy and process initiatives that have agreed implementation timetables.
- Three scenarios (High, Medium and Low) have been projected based on assumptions about future sentencing trends. The Medium scenario assumes no increases or decreases in custody rates or determinate sentence lengths. The High/Low scenarios reflect a 1% per annum increase/decrease in custody rates and a 0.5% per annum increase/decrease in the average (determinate) custodial sentence lengths. Other impacts included in the projections, such as those of legislation and processes, are applied equally to all scenarios.
- Projected prison populations for the three scenarios are given in Table 1. By the end of June 2015 the demand for prison spaces is projected to increase to between 83,400 and 95,800.
- The assumptions informing the projection, and therefore the projections themselves, are subject to considerable uncertainty. This is represented by the three scenarios, with each scenario being only as likely as the assumptions that inform it. While these assumptions are based on extensive consultation, and emerging data on them are being monitored, the department does not know yet which one is most likely to occur in future. They do not include impacts for any future measures for which implementation timetables are not yet known, or measures for which the effect cannot be projected with reasonable confidence.
Courtesy: criminalsolicitor.net/newsletter.asp
Andy Bolton
Solicitors in the UK | Compensation Solicitors
Prison Population Projections
The Ministry of Justice has published a prison population projection up to June 2015:
* This bulletin presents projections of the prison population in England and Wales from September 2008 to June 2015. The projections are based on assumptions about future criminal justice trends (e.g. sentencing) and incorporate the anticipated impacts of policy and process initiatives that have agreed implementation timetables.
* Three scenarios (High, Medium and Low) have been projected based on assumptions about future sentencing trends. The Medium scenario assumes no increases or decreases in custody rates or determinate sentence lengths. The High/Low scenarios reflect a 1% per annum increase/decrease in custody rates and a 0.5% per annum increase/decrease in the average (determinate) custodial sentence lengths. Other impacts included in the projections, such as those of legislation and processes, are applied equally to all scenarios.
* Projected prison populations for the three scenarios are given in Table 1. By the end of June 2015 the demand for prison spaces is projected to increase to between 83,400 and 95,800.
* The assumptions informing the projection, and therefore the projections themselves, are subject to considerable uncertainty. This is represented by the three scenarios, with each scenario being only as likely as the assumptions that inform it. While these assumptions are based on extensive consultation, and emerging data on them are being monitored, the department does not know yet which one is most likely to occur in future. They do not include impacts for any future measures for which implementation timetables are not yet known, or measures for which the effect cannot be projected with reasonable confidence.
Courtesy: criminalsolicitor.net/newsletter.asp
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Andy Bolton
Solicitors in the UK | Compensation Solicitors
