With almost 60% of Insolvency Practitioners already believing that the UK Insolvency regime is overly forgiving towards directors who fail this is surely not going to change their opinions
It has been speculated that cost cutting at the Insolvency Service the agency of BIS that deals with company investigations and disqualifications will be as high as 40% of its annual budget. This is obviously going to lead to them focusing on the management of the ever increasing personal and corporate insolvency caseloads and moving away from the costly, time consuming investigation work. This will ultimately lead to many more directors who ought to be investigated and possibly disqualified falling through the net and allowing them the opportunity to repeat there mistakes and put further creditors and jobs at risk.
A possible solution to this problem may be to introduce stricter punishments for directors of failed companies such as a three strike your out policy. For example if you have three company failures over your lifetime you are automatically debarred from being a director or being involved in the management of a company for 10 years. No investigation just a straight 10 year ban.
This might make directors take a tighter grip of there companies, identify any problems and look for solutions a lot sooner.
So if cost cutting is required to help reduce the government deficit then by increasing the penalties for directors who fall foul of the rules this may counter affect any potential loss of belief in the disqualification procedure and remind directors that they can’t get away with any mismanagement.
36% of 18-24 year olds would rather bury their heads in the sand than deal with debts compared to 9% of 55-64 year olds
A staggering 26% do not even open their bills compared to 10% of over 65 year olds
28% try to avoid contact with people they owe money to. This is 11% for over 65s
30% do not even know who to contact for help compared to 8% of over 65s
44% of all ages still believe that you have to pay for debt advice.
Has the time now come to demand that the government change the National Curriculum so that financial planning and money management are an essential part of a child’s education?
By the time they leave school children should know how to budget, how to save and what they can do if it all goes wrong.
Also it might be worthwhile to provide additional education to those under 25s who have suffered from debt problems so that they don’t make the same mistake in the future.
Maybe it is now time also for the financial institution to be more proactive on how they lend to the young. Have reduced credit limits or capped limit. Reward those who pay off there credit each month and remove facilities for those who pay the bare minimum so they can not rack up large debts.
By teaching the next generation about how to deal with there finances better and that credit be used in proportion to a person’s income it should hopefully lead to less long term financial problems.
But the issue of Football Club Administrations keeps rearing it’s head and couldn’t be more relevant as football fever fills the nation during this year’s World Cup.
As a nation of avid football fans – our love for this sport and the Clubs who host it is like no other – they “Club” is considered family, and for family, most of us, would do anything.
So the question has to be asked, when a Club is threatened by Administration – what roles do / should the fans have? Do they have a genuine right to have a say in the future direction and lifeline of the Club?
In the case of Crystal Palace F.C they are due to vote on 25 June to agree or disagree whether the Club can enter into a CVA – Company Voluntary Arrangement.
In an interesting move some of the fans of the club will be able to vote at this meeting as they had prepaid for Season Tickets over the forthcoming seasons.
I personally think that this is a good strategy as the true fans of the club will get to have a say in what happens to the club going forward and may actually tip the vote in favour of the CVA.
It looks like Debenhams and JD Sport are two of the interested parties looking to buy the collapsed footwear chain Faith which entered Administration on the 22nd April 2010.
It is believed that JD Sports have offered £4m for the company and that Debenhams are looking at a similar deal to when it acquired the brand and stock of Principles in 2009.
This could potentially save up to 1700 jobs currently at risk.
The Administrators of Faith, Mazars have confirmed that the deadline for offers to be made is the 7th May 2010 and that several information packs have been sent to interested parties.
This should be good news for my wife and my credit card as with well respected high street brands like JD Sports and Debenhams interested in purchasing Faith she will hopefully not need to go on that emergency spending spree to buy new shoes.
Hodgsons Licenced Insolvency Practitioner, Steven Wiseglass, warned readers of leading business magazine, Crain’s, that online bankruptcy proposals could make bankruptcy too easy an option for those suffering from debt.
Representing insolvency trade body, R3, Steven went on to explain that making bankruptcy available online could lead to many opting for an easy solution which in real life terms is not in their best interests.
In the olden days, we used to write letters to each other…..then we emailed, then we texted and now it seems we poke, upload, engage and tweet.
Recognising how social media can help us to help others, we’ve launched the Hodgsons twitter page and will use this as an additional form of communication with people out there in need of impartial advice on their situation. http://twitter.com/InsolvencyQandA
You’ll also see on the right hand side of our blog space, that you can “engage” and contribute to twitter conversations all over the UK discussing debt and insolvency.
And to complete the package, we hope you’ll provide feedback and questions regarding our blog content as well as suggesting subjects you would like us to discuss through this platform.
Long gone are the days when Insolvency Practitioners and Chartered Accountants are sat in plain suits, with dull, monotone voices and straight faces. It’s a new dawn for our sector and one in which we can evolve – bringing information to people who need it, sharing our expertise and building much stronger relationships with you – our clients.
A business may not be a person, but it’s built by people. The ethics and standards it works towards are created by people. Those who run it, beleive in it, evolve it and feel passionately loyal to it, are of course people. And those who fight for it’s survival or mourn it’s loss, are people.
In our line of business the average working day consists of serious conversations about businesses which are struggling to continue and the livelihoods which will be effected should such businesses come to a close. What makes us different is our empathy and understanding that no matter how black and white the figures are, there has to be consideration made to the emotional element of this – the lives that will be effected. It may not effect the outcome of the situation but it will effect the approach.
Through our blog, we’ll discuss issues arising in the press or case studies which may help illustrate certain debates around this subject matter more clearly. We welcome your questions and hope that through this forum of communication, we can improve the understand people across the country have about the ways in which insolvency and corporate recovery can be acheived.
We would never underestimate the emotional strain and worry trying to save a business can cause and will assist you in every way we can.
Yesterday, Thursday 4 February, Steven Wiseglass, Insolvency Practitioner of Hodgsons was appointed as administrator to Divalimit Limited (“Divalimit”).
Divalimit has a number of retail brands including, Texstyle World, FADS and Leveys.
The company was an MBO of the struggling retail chain who purchased the above brands from a previous administration in December 2008. Currently affected by this administration are sixteen national trading stores.
Administrator Steven Wiseglass, of Hodgsons, comments;
“We are working closely with the team at Divalimit and hope to find a solution which could save at least some of the stores and jobs. The business has fought against the recession and unfortunately been unable to survive through the worst of it. We are hoping to find a buyer who will want to continue to trade the business but, under current conditions, this could be challenging.”
The company will continue to trade for the time being and the administrator welcomes any interest from potential buyers.
Notes to Editors:
For further information, please contact:
jcohen@hodgsons.co.uk / 07976 739 125
As the football season is now under way, Harlow Town F.C bravely plays on despite the 10 point deduction as they officially enter into a CVA.
• Harlow Town Football Club Limited officially enters into a Company Voluntary Arrangement (CVA)
• Hodgsons Chartered Accountants confirm creditors will receive dividends
Harlow Town Football Club Limited officially entered into a Company Voluntary Arrangement (CVA) on Thursday 17 September 2009, appointing David Mond of Hodgsons Chartered Accountants as the Supervisor.
Despite the grey day, Mond advises this is not a sad day but one which offers a new lease of life to a Club which is clearly loved by it’s town and loyal fans. Mond comments,
“Harlow Town F.C has done what was necessary to give the Club a chance to re-emerge and try and rebuild itself in a more stable, financial position with the support of the town.”
With creditors approving the CVA, the petition issued by HMRC will now be dropped and Hodgsons confirm that creditors will receive a dividend on their claims as long as the Club complies with the terms of the CVA.
According to the league rules Harlow F.C should receive a 10 points deduction and will need the support of the community to ensure the clubs survival.
Notes to Editor
For more information call:
Marketing – Jacqueline Cohen, 07976 739 125 / jcohen@hodgsons.co.uk
CVA – Steven Wiseglass, 0161 969 2023 /swiseglass@hodgsons.co.uk
www.hodgsons.co.uk
LD Financial Services, Del O’Sullivan – 01273 900 123 / del@ldfinancialservices.co.uk
23:30TheGuruDrew: a very nice day with The Smiths - and I have been invited to join the board of trustees for The Lincoln Centre for Counselling. Trustee, Me.
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22:38TPRFS: Bankruptcy trustees are reviving their search for half a dozen works of art acquired by, Asil Nadir before he fled the country in 1993.
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