Another Wind Up at Hillsborough
HMRC have lodged yet another winding up petition against Sheffield Wednesday Football Club. This is the third occurrence of this so far this season.
The petition has this time been submitted in relation to an unpaid bill of £600,000, however chairman Howard Wilkinson has remained calm about the situation as talks of a takeover continue to mount.
In the aftermath of relegation to the third tier of English Football, it is believed that the lost revenue that comes with is coupled a number of poor management decisions have caused the current plight of the underachieving Yorkshire club.
Before the last winding up hearing, the club were saved when the Co-operative Bank , also the clubs majority creditor, agreed to extend the overdraft limit in order to pay off the bill before the court date, no such agreement is likely to come into place this time around, as the bank are no longer willing to offer any more credit.
In an interview on local radio, Howard Wilkinson revealed that one of the potential investors in the club had offered to loan the money pay off the debt to HMRC as takeover talks continue, but refused to comment on which investor it was.
Wilkinson told BBC Radio Sheffield, "One of the three investors we are talking to got in touch last night and offered a facility in the form of a loan in order that the current situation with the HMRC was resolved and some of the uncertainty taken out of the situation.
"What we have got to do now is explore the feasibility of such a loan."
A fans forum was held last night by Chief Executive Nick Parker, who also took a similar stance, however he did reveal that the offer had come from an overseas oil company, but still wasn’t to be drawn out on rumours that the company is headed by the former Hartlepool manager and Wednesday player Chris Turner.
The hearing is due at court on 17 November, but Wilkinson has taken a calm stance and expects the matter to be dealt with well before then.
"I am hoping that this time we won't get to the last minute," he said.
Posted at 04:48PM Sep 30, 2010 by Marc Stenton in Insolvency | Comments[0]
Seaside Residents Struggling
Britain’s coastal towns have the highest level of personal bankruptcies, new figures have revealed.
A decline in fishing, shipbuilding and seaside tourism in the UK have taken their toll, creating a whole new wave of residents in seaside towns being declared bankrupt in 2009.
Hull tops the table, with 51 new cases per 10,000 adults – more than twice that of London’s 20 per 10,000, according to the research by accountancy group Wilkins Kennedy.
Blackpool has the second highest, with 49 personal bankruptcies per 10,000. The popular resort, famous for its lights and amusements, is followed by Plymouth, with 46 personal bankruptcies and Eastbourne close behind with 44.
Cardiff is the only coastal city out of the 50 largest UK towns and cities, which has a rate below the average, at 12.3.
The results are significant because Plymouth, Blackpool and Hull were also top of the list for personal bankruptcies, according to figures released in 2008.
The 2009 figures have revealed a whole new wave of residents being declared bankrupt in these areas.
“Staycations have not bailed out the coastal economy,” Keith Stevens, Partner at Wilkins Kennedy said. “It is a worry that some of the coastal towns seem to have become production lines for personal bankruptcy.”
Many coastal towns and cities in the UK never fully recovered from their heyday, when the shipbuilding and commercial fishing industries thrived, Keith Stevens commented.
Very few have been able to offer holiday makers an attractive alternative to foreign holidays, he said.
Too many of these coastal towns also have a high proportion of residents employed on a seasonal or part time basis, he said. This means their earnings can be more erratic than people who work full time, Keith Stevens said.
He added that banks have been reluctant to lend to these seasonal workers, and when they do find funding it can often be at a very high interest rate.
Posted at 04:10PM Sep 27, 2010 by Marc Stenton in Insolvency | Comments[0]
Century Club Struggling
Soho members' club Century has brought in insolvency experts after running up almost £600,000 in unpaid bills because of the recession.
The club has written to more than 200 shareholders to tell them it has been unable to pay creditors who include the Inland Revenue, which is owed more than £400,000. Shareholders, who include dot-com entrepreneur Martha Lane Fox, celebrity agent Simon Fuller and former Monty Python star Terry Gilliam, must approve a deal to restructure the debts.
Creditors and shareholders will meet on October 8 to decide the future of the Shaftesbury Avenue club, which caters for the media and TV crowd, Accountants David Rubin & Partners are hopeful the club's owner, CenturyLeisure, can be saved.
Asher Miller, a partner at David Rubin, said of the deal, "It is a proposed Company Voluntary Arrangement, which is not a liquidation or insolvency. The company has made a proposal that we feel to be fair and realistic and we're confident that creditors will approve it."
Miller also added, "It is business as usual. Century is a popular club. It has got a good membership base."
Other shareholders include advertising guru Sir John Hegarty, ‘Thick Of It’ actor Peter Capaldi, Men Behaving Badly actress Caroline Quentin and concert promoter Harvey Goldsmith.
Miller said he did not expect the shareholders to have to inject any cash into the business as part of the restructuring. He explained the club was suffering "an overhang of debts from the last two years that killed the economy for everybody".
Century, which opened in spring 2001 as a rival to Soho House, was particularly hit by a drop in income from events. But he said trading has picked up recenly, and the club has "lots of advanced orders for Christmas" for its restaurant and bar.
CenturyLeisure's majority shareholders are the club's managers, Pierre Condou and wife Kathleen, who both sit on the board. The other three directors are Hegarty, co-founder of advertising agency Bartle Bogle Hegarty, theatre producer Nick Allott and serial entrepreneur Rob Lewis.
CenturyLeisure's most recent accounts show a pre-tax loss of £190,000 in the year to May 2009.
Condou and his wife suffered a similar blow earlier this year at another venue, Paramount, billed as Soho's tallest restaurant, at the top of Centrepoint on Tottenham Court Road.
Creditors agreed to wipe out 70% of Paramount's £1.4 million in debts as part of a Company Voluntary Arrangement.
Posted at 12:00AM Sep 26, 2010 by Marc Stenton in Insolvency | Comments[0]
Shares Outdoing Cash Isas
The accumulated value of stocks and share Individual Savings Accounts (Isas) has outstripped the value of cash Isas, government figures show.
Provisional figures for 2009-10 show savings in share Isas were worth £178bn, with £172bn held in cash Isas.
The 53% rise in the value of stocks and share Isas reflected last year's increase in stock markets.
Savings held in cash Isas, currently paying an average interest rate of just 0.69%, went up by just 9%.
During the past financial year they were offering even lower returns to investors than at the moment, of just under 0.5% a year.
Cash Isas are held by about a third of the UK's adult population.
In April this year, the amount people could save in an Isa every year rose from £7,200 to £10,200, of which half can be saved in cash and half, or all, in stocks and shares.
The figures for the stocks and shares investments include the value of former personal equity plans.
Posted at 09:00AM Sep 25, 2010 by Marc Stenton in The Economy | Comments[0]
More Money Problems at Pompey
Portsmouth are at the centre of yet more financial issues in the football world, only this time they’re on the receiving end of it.
Reports both on the south coast and in Italy have suggested that Portsmouth have reported Italian outfit Genoa to the football authorities over a failure to meet a deadline to pay a proportion of the transfer fee for German born, Ghanaian attacker Kevin Prince-Boateng.
It is understood that the total fee for the players’ registration was around £5.85m over deferred terms and that Genoa missed the 6 September deadline to pay a £1.2 million instalment and there’s uncertainties over whether or not they’ll be in a position to pay the next instalment in early October.
The reports have prompted an announcement from Administrator at Pompey, Andrew Andronikou.
"Genoa were due to pay the first instalment two weeks ago," he told The PortsmouthNews.
"We've been listening to excuses. We've had enough.
"We complained last week on the 15th and got a response saying 'sorry, we mistook your bank details'.
"A week later, it doesn't look like the cheque has even hit the post.”
Posted at 02:57PM Sep 24, 2010 by Marc Stenton in Insolvency | Comments[0]
HMRC Toughen Their Stance with Archial
One of Britain’s largest architecture firms, Archial, has placed itself into administration after HM Revenue and Customs toughened its stance and rejected a payments deal.
Archial called in administrators PricewaterhouseCoopers (PwC) after the taxman refused to agree to a proposal to pay its debts in monthly instalments rather than one lump sum.
David Chubb and Graham Frost of PwC are now seeking a rapid sale of the business as a going concern.
It is understood that Archial, which employs more than 400 staff, including about 200 architects, owes HMRC about £4m in tax.
The group warned in August that its profits for this year would be lower as cuts in government spending caused projects to be cancelled or delayed.
It has emerged that the Aim quoted company has been negotiating with HMRC for some weeks before the tax authority issued its winding-up order.
Posted at 03:40PM Sep 23, 2010 by Marc Stenton in Insolvency | Comments[0]
More Than 1 in 10 Struggle to Make it Through to Payday
Insolvency firm R3 has highlighted the extent of the debt relief situation facing many Britons currently, with one in ten regularly struggling to reach pay day with any cash left. President of the organisation Steven Law claimed that people's addiction to credit cards is a major factor in the financial troubles that are experienced throughout the year.
An R3 survey showed that 11 per cent of British adults often find it hard to get to their next payday, while another 31 per cent occasionally have this problem.
"There needs to be a cultural shift in consumer attitude to debt. For too long we have got used to the idea that this is money we are entitled to," said Mr Law.
He pointed out that personal insolvencies have increased by 350 per cent over the past decade, which can be a "huge stress" for those who are experiencing such issues.
The company claimed that many people have money problems as a result of going out and spending cash on non-essential transactions, while mortgage repayments and other major expenses were also identified as significant contributors.
However, the most common factor was credit card repayments, with 35 per cent of respondents who struggle to make it through to their next payday saying such costs are not helping their situation.
Mr Law pointed out that making purchases on such accounts is just "delaying the inevitable", since customers will need to pay for items eventually.
R3, also known as the Association of Business Recovery Professionals, recently published research showing that ten per cent of small businesses are worried they may go into administration if their public sector contracts are withdrawn.
Posted at 03:55PM Sep 22, 2010 by Marc Stenton in Sport Finance | Comments[0]
Public Sector Borrowing Hits Record High for August
The level of new public sector borrowing in the UK has reached a record high for August according to the Office of National Statistics (ONS), totalling £15.9bn.
This figures has beaten all forecasts and expectations after a rise in interest payments on index-linked government bonds was caused by an also higher than expected inflation rate. However, the ONS said receipts from taxes were still rising.
This latest figure means that borrowing in the UK in the opening 5 months of the financial year has hit a massive £58.1bn.
Despite this however, the forecast for the year at a whole has showed the level of borrowing is still expected to undercut last year’s total of £155bn, estimates now stand at £149bn.
The figures do not include the impact of financial interventions implemented by the government, which reduce overall borrowing because of profit contributions from the part-nationalised banks.
The ONS said the rise in the retail prices index, which is used to set payments on index-linked bonds, meant interest payments almost trebled to £3.8bn last month, compared with £1.3bn in for August a year ago.
A leading economics correspondent has said this rise in interest payments meant the country's finances would be out of balance for some time.
A spokesman for the Treasury said the figure underlined the need for the government's forthcoming spending cuts.
"Today's borrowing figures demonstrate just why the government needs to tackle the deficit," he said.
"If the government had not announced decisive action to bring borrowing down, debt interest would have been over £65bn by 2014-15, more than is spent on schools or defence."
Posted at 03:50PM Sep 21, 2010 by Marc Stenton in The Economy | Comments[0]
Retailers Need to Utilise the Internet
Up to 1,500 consumer goods stores could fail in the next 12 months if they do not use the internet as a tool to increase business, according to accountancy firm RSM Tenon.
It is claimed that currently one in ten retailers is putting themselves at risk by not using the internet to offer or promote their business to consumers.
RSM Tenon believes that by increasing web offerings and online exposure, businesses could not only increase annual revenues by up to 18 per cent but could also fend off insolvency. Despite this the firm predicted the high number of failures as it argued that not enough retailers are using the web to promote their wares in a similar vein to their store practice.
Carl Jackson, head of recovery of RSM Tenon has said, “Consumers are not just using the internet to look for bargains, but as a means of finding goods and service providers that fit with their hectic lifestyles.
“In such a tough financial climate, businesses need to consider all their options and take advantage of every opportunity to create new streams of revenue. Not only can an online operation generate extra income, but it can be hugely beneficial in minimising outgoings such as heating and rent that are generated by ‘bricks and mortar’ retailers.”
Retailers have accounted for 5.5 per cent of the 13,000 corporate insolvencies that have taken place so far this year. But companies with a store-only operation have been particularly badly hit, resulting in thousands of retail units being left vacant across the UK.
Posted at 04:11PM Sep 20, 2010 by Marc Stenton in Insolvency | Comments[0]
Blackpool Asked To Clarify Oyston Role
Blackpool must clarify acting chief executive Karl Oyston's role at the newly promoted club after it was revealed he had been declared bankrupt.
Under the Premier League's Owners' and Directors' rules a person made bankrupt is barred from holding the position of chairman or director.
Insolvency records show he was made bankrupt on 18 August, the day he stepped down as the club's chairman.
"We are going to be in touch with the club," a league spokesman has said.
"We want to clarify the bankruptcy and his position at Blackpool," added the Premier League spokesman.
A Blackpool spokesman said the club would not comment on the matter but the club's website lists him as a member of the Blackpool board.
When Oyston resigned as chairman on 18 August the club said he was to stay on as acting chief executive until the end of the season or until a replacement was found.
The 43-year-old Oyston will be automatically discharged from bankruptcy on 18 August 2011, according to the Individual Insolvency Register.
Posted at 10:00AM Sep 19, 2010 by Marc Stenton in Insolvency | Comments[0]
New Plan For Banking Insolvencies
The U.K. government on Thursday laid out proposals for a new special-administration regime to handle the insolvencies of failing investment banks more effectively, to minimize the impact on financial stability.
The new system would manage bank insolvencies that aren't put into the U.K.'s new special-resolution regime, which was developed to ensure that a systemically important bank is rescued or sold off very quickly to avoid financial contagion.
The proposed system, which isn't expected to impose any additional regulatory costs on firms, would try to ensure that customers get their cash back as soon as possible, that creditors get the best return possible and that there is coordination between regulators and bodies such as clearing houses.
"It is crucial to reduce the impact of an investment-firm failure on the stability of the U.K. financial systems," said James Sassoon, commercial secretary to the Treasury. "The proposed new special-administration regime will provide administrators with clarity and direction to manage a firm's winding up in a way that is both less expensive and less disruptive."
The new system will bolster the U.K.'s reputation as one of the world's leading financial centres, the government said. It said it has worked extensively with the Bank of England and the Financial Services Authority in developing the plans, and also consulted with financial firms.
Posted at 10:00AM Sep 18, 2010 by Marc Stenton in Insolvency | Comments[0]
Goldtrail Investigated
Forensic investigators at PricewaterhouseCoopers have been appointed to probe the collapse of holiday operator Goldtrail Travel, after it emerged that the airline regulator was investigating the company’s invoicing just weeks before the collapse.
Liquidation documents reveal that Goldtrail was in May subjected to an investigation by the Civil Aviation Authority (CAA) in which the company's policies for invoicing and APC customer protection payments were reviewed.
The CAA then demanded a bond worth 10-15% of the company's revenue, around £8m, which Goldtrail was unable to pay. Its former owner, Kadir Aydin, has alleged that the CAA inquiry contributed to the company's failure, because this "distracted [executives] from their managerial responsibilities".
Goldtrail Travel's administrators, Begbies Traynor, in conjunction with the CAA, have now appointed forensic accountants from PricewaterhouseCoopers to conduct deeper investigations.
Richard Curtin, special counsel at Faegre & Benson told has said, “The first issue that jumps out in this development in the Goldtrail saga is the appointment of PwC as a third party to carry out the investigation. It seems unlikely that Begbies Traynor would have willingly given up such a fee which raises the question as to whether this is the instruction of the CAA or another. “
“If it does transpire that the CAA are responsible for tipping over Goldtrail the Administrators may well have a cause of action. Begbies Traynor cannot, and will not, ignore the findings of PwC and will be duty bound to proceed against whoever has misbehaved if this proves to be the case. It will be very interesting to see the results of the PwC investigation and get to the bottom of who is responsible for this costly failure.”
More than 16,000 UK passengers were plunged into chaos when the firm collapse and left stranded abroad. Liquidation documents reveal that the operator had debts of £5.7m, including owing HM Revenue & Customs £150,000 and more than £1.5m to airlines Turkuaz Airlines and Onur Air.
Posted at 02:23PM Sep 17, 2010 by Marc Stenton in Insolvency | Comments[0]
Retail Sales See Surprise Slump
UK retail sales suffered a surprise fall in August, the first drop since January, the Office for National Statistics (ONS) said.
Sales fell 0.5% from July, suggesting that worries about tax rises and budget cuts are starting to hit consumers.
The ONS added to concerns about spending by revising July's growth figures to 0.8% from 1.1% previously.
The data came as three retailers, namely John Lewis, Kesa and Kingfisher said High Street conditions could worsen.
Non-food stores were the worst hit in August, with sales down 0.7%, driven largely by household goods stores.
Food stores saw a decline of 0.5%, according to the ONS.
Three-month data from the ONS showed a rise of 1.4% on the previous quarter.
Vicky Redwood, at Capital Economics said, "August's fall in retail sales could be the first sign that the surprising resilience of consumer spending recently could be coming to an end."
But she warned against reading too much into one month's figures.
However, many analysts believe the government's austerity drive, worries over job prospects, and January's planned VAT hike to 20%, are making consumers more cautious.
Retailer John Lewis on Thursday reported strong profits and sales growth, but said UK retailing as a whole faced a difficult time ahead.
In the six months to 31 July, John Lewis made profits of £110.5m on sales which rose 12.4% to £3.8bn.
Online grocery sales rose 54%, while growth at johnlewis.com topped 36%.
Posted at 04:44PM Sep 16, 2010 by Marc Stenton in The Economy | Comments[0]
Students Help Boost Employment Figures
The number of students, carers and long-term sick who returned to the workplace helped boost the employment figures, according to the Office for National Statistics.
The total number of people employed increased by 286,000 to 29.2 million in the three months to July, the ONS said – the biggest quarterly rise since records began in 1971.
The number of students taking on part-time work, such as behind a bar or working in a shop, has jumped from 898,000 to 945,000 in the three months to July. Over 30 per cent of students now have a job – not as high a percentage as during the boom years, but higher than the 29 per cent it was last year.
Though the jump in the number of people in work appeared to show the worst of the jobs crisis was over, economists warned that the figures were misleading. Overall unemployment only fell 8,000 to 2.47 million.
That is because most of the new jobs created went to those who previously had not been counted as unemployed. Instead they had been classed as "economically inactive" – those of working age, who have chosen not to look for a job, either because they cannot or because they are a student or because they are caring for a family member.
Many of the new jobs created were also part-time. Part-time workers now account for 27.2 per cent of total employment, which is up from 25.4 per cent before the recession began in earnest in 2008.
David Kern, chief economist at the British Chambers of Commerce, reiterated his forecast that unemployment was likely to peak at about 2.65 million in the first half of 2012.
He said: "While there were some positive developments, particularly a big rise in employment and a fall in inactivity, the number of people working part-time because they could not find a full-time job has increased further."
"There is no room for complacency and the labour market must prepare for the impact on jobs that will result from the government's deficit-cutting measures."
Posted at 04:10PM Sep 15, 2010 by Marc Stenton in The Economy | Comments[0]
Public Sector Cuts Set to Disrupt Small Businesses
Nearly 150,000 small businesses face insolvency if their public sector contracts are cancelled, according to research carried out by R3.
The insolvency trade body revealed that over 148,000, nearly 10% of small businesses feared insolvency would result if they lost the work they carried out with the public sector.
It was also revealed that one third of small businesses described themselves as reliant on public sector contracts, which meant that government cuts could have a profoundly significant effect on current levels of corporate insolvency.
The president of R3, Steven Law said, “It is of course highly unlikely that all public sector contracts will be withdrawn and the figure of 150,000 business failures would represent a worst case scenario.
“Yet with the prevalence of small businesses in the UK and an increasing reliance on public sector contracts dating back to 1990s, these cuts are likely to be felt extremely keenly.”
R3’s research found that of all small businesses, a fairly substantial 11% said they would face serious financial difficulty should they lose their public sector contracts, whilst as many as 24% said their profitability would be affected.
Furthermore, 14% of small businesses revealed that they would have to consider job losses if they lost their public sector contracts.
Law also said, “Worryingly these results suggest that a significant proportion of small businesses, which rely on government contracts, are going to struggle to fund expansion and modernise.
“This comes against a backdrop of corporate insolvency figures being kept down by HM Revenue and Customs time to pay agreements and historically low interest rates.”
Posted at 02:28PM Sep 13, 2010 by Marc Stenton in The Economy | Comments[0]
