Summer? What Summer? – August insolvency news round up
Technically it’s supposed to be the summer holiday season but we’ve seen precious little of that.
KEO Films pre pack deal
The TV production company KEO films co-founded by presenter and chef Hugh Fearnley-Whittingstall has been bought out in a pre pack administration deal by Passion Pictures after declaring itself insolvent.
KEO films produced popular and award-winning shows such as “Hugh’s War on Waste ” and “Easy Ways to Live Well” and described itself as having a strong ethical brand reputation. It’s latest acclaimed documentary series to screen was “Once Upon a Time in Iraq” broadcast by the BBC.
The directors declared they were unable to put enough money into the business to maintain it as a going concern with the impact of the coronavirus proving terminal.
The deal has secured 20 jobs in the business and the new owners are voluntarily looking to repay as much of the debts KEO films owed to creditors before it went into administration.
Will Anderson of KEO Films said: “We are trying to do the right thing in a difficult situation and are trying to come to arrangements with people where we can.”
While not all of the old company’s debts could be repaid, the new owners have made offers to repay the majority of freelance employees in full.
Hugh Fearnley-Whittingstall stepped down as a director once the deal had been completed but continued to make programmes with the company under the new ownership.
Formaplex pre pack administration
Formaplex – a major manufacturer with four sites in Hampshire – which supplied lightweight plastic components to the automotive, motorsport, aerospace, medical and defence markets was bought out by new owners this month in a pre-pack administration.
The 20-year-old business was rebranded as Formaplex Technologies by its new owners and 110 posts were lost during the process.
A spokesperson for the ownership group said: “While positive progress had been made, to secure the long-term future of Formaplex, the business needed to take further steps to strengthen its balance sheet.
“As a result, Formaplex Ltd was placed into administration and we agreed to purchase the business and assets of the company from the administrators on the same day through a procedure known as a pre-pack administration.
“There has been a seamless transition of customers and employees to a new business, Formaplex Technologies. We have secured the support of all the major customers and an experienced new CEO has been appointed.”
Minster construction closes
Mansfield-based Minster Building Company went into administration with 26 staff losing their jobs.
First formed in 2007, Minster specialised in constructing supported living facilities for vulnerable citizens but due to delays in planning and construction processes due to the pandemic combined with price increases in building materials meant that most of their current projects became significantly loss-making.
All work ceased on their various work sites from the East Midlands to the North East.
A spokesperson said: “It’s a great shame that a long-established construction business has been laid low by the knock on effects of the Coronavirus crisis.
“Not only have jobs been lost and suppliers left nursing substantial losses, but the vulnerable people who would have been housed in the properties being built by the Company will suffer as a result of the inevitable delays in completing these projects.
“The UK construction sector is facing acute difficulties as a result of the pandemic and the severe disruption it has caused to its operational processes, supply chains and labour resources. Sadly, Minster will not be the last failure in this vital industry.”
Garrandale, an engineering company based in Derby, has gone into administration.
The 45-year-old business began designing equipment to help streamline manufacturing in the automotive, healthcare, oil and gas sectors. In the 1980s they began manufacturing production equipment for railway carriages and continued progress working with companies such as AEA Technology and Bombardier working on a system that prevented train wheels from slipping.
The company’s expertise was also sought to help build the Hadron Collider and work on the Ariane space rocket used by the European Space Agency but has now officially gone into administration with the loss of approx. 70 positions.
AMG or AM Griffiths based in Wolverhampton appointed administrators earlier this month.
The business, founded in 1899 by Arthur M Griffiths, was profitable as recently as 2020 and worked on many private and public sector projects including building many schools and hospitals and was responsible for many major landmark buildings across the Black Country.
The company was unable to secure additional work and has ceased trading altogether with the loss of 60 permanent positions.
Six Day Series
Madison Sports Group, which staged the popular Six Day cycling series in London, Manchester and locations abroad went into administration as Covid-19 forced the cancellation of all their planned live events.
A spokesperson said: “Madison Sports Group and Six Day are prime examples of companies with solid business models whose difficulties have been greatly exacerbated by the fallout from Covid-19.
“With the majority of sports events closing down completely over the past year and a half, both companies’ revenue generating capabilities have decreased markedly.
“Following the financial year-end and as a result of Covid-19 events have had to be postponed due to the health concerns of athletes, staff and guests and it is not possible to quantify the impact on the business, creating a material uncertainty over its future prospects.”
Six Day launched in London in 2015 with cycling stars such as Sir Chris Hoy and Mark Cavendish and has taken the format to other major cities with other stars but the enforced halt of all activities was too much for the business to survive.
The Indian sauces manufacturer first founded in Leicester in 1977 has gone into administration with the loss of almost 100 jobs.
The business produced a range of traditional Indian foods for both supermarkets and the foodservice industry and while they had invested heavily in recent years, growing their operations, the loss of business caused by the Coronavirus pandemic and recent labour shortages placed significant pressure on the company leading to the appointment of administrators.
A spokesperson said: “The pandemic significantly impacted the implementation of Simtom’s strategic plans.
“Our immediate priority is to support employees made redundant so they can make claims via the redundancy payments office and looking for potential buyers for the business.”
The Glenburn Hotel, built in 1843 on the Isle of Bute and billed as Scotland’s first hydropathic hotel, has closed and gone into administration with all staff being made redundant.
The hotel overlooks Rothesay Bay and was popular with businesses and holiday makers alike due to its location and extensive facilities.
The administration has primarily been caused by significant operating costs, coupled with the fall in revenue due to the Covid pandemic whilst still having to meet significant maintenance and running costs.
A spokesperson said: “Unfortunately, having explored all its options, the hotel was unable to survive the significant fall in revenue caused by the Covid-19 pandemic whilst still having to meet significant maintenance and running costs.
“We will now focus our efforts on assisting employees, many of whom have worked at the hotel for many years, to submit their claims for redundancy and other sums due to them whilst preparing to market and sell the hotel.
“Whilst this is a sad day in the Hotel’s history, this is an outstanding opportunity to acquire an iconic hotel on one of Scotland’s most accessible islands.”
A Grantham based manufacturer has gone into administration with the potential loss of 100 employees.
Fruehauf was founded in 2010 and produces a range of tipper and rigid trailers, quality control systems and techniques.
Administrators are considering several options including a company voluntary administration (CVA) as well as a potential sale to any interested parties.
Freuhauf produced around half of the tipping trailers sold in the UK and ongoing delays to orders had already led to a major trailer shortage across the entire supply chain.
The business will continue to trade while in administration but this situation might exacerbate delays.
Newcastle based Kapex Construction which was involved in a number of high profile schemes in the city has appointed administrators.
The business launched in 2016 to work on various housing schemes throughout the North East of England and employed 62 people directly last year.
The company was recognised by RICS for its work on All Saints Church, an 18th Century Grade 1 listed building which was on Historic England’s Heritage At Risk Register.
The business was in profit in 2020 but the cessation of building work for the majority of the previous 18 months has proven insurmountable.
O’Keefe Construction based in Greenwich has entered a company voluntary arrangement (CVA) with its creditors after suffering significant losses in the financial year to May 2021.
The business employs 178 has operated in London and the South East for over 50 years but took professional advice following severe cash flow challenges and are pursuing a CVA to continue trading while they restructure their debts.
A spokesperson said: “A CVA will secure the company’s future as a going concern and allow it to continue to service its ongoing clients.
“Crucially, a CVA will also maximise the returns to the company’s creditors, compared to alternative restructuring procedures.
“On a successful approval of the CVA proposal, the company’s shareholders will contribute additional sums to support its short term cash flow and to ensure the business has increased liquidity levels.
“The financial restructuring afforded by the CVA, alongside operational improvements made to the business, will ensure that O’Keefe is well placed to complete its ongoing and profitable work and to fulfil its client needs.”
CEO Patrick O’Keefe said: “The board was tasked with delivering the business out of the current difficulties and after taking specialist advice, has agreed to enter into a CVA to allow this mechanism to secure the long term success and profitability of the business.
“Thanks to our exceptional staff, our current portfolio of jobs is trading very well. The conclusion of the CVA process will immediately put the business on a positive footing.”
“The directors are optimistic regarding the future success of the company in view of the significant forward order book and improving project margins.”
We’re now into the last third of the year and what might be the most crucial month for businesses to get help and make essential decisions to secure their future for the rest of 2021.
September will see bills and debts continue to mount, the furlough scheme finally coming to an end, CBILS and bounce back loan repayments continuing to come due, defaults rising and the ban on creditor actions such as winding up petitions being lifted.
The time to get advice and hear what options your business has to manage its debt obligations including VAT arrears or bounce back loans is short so the best time to get in touch with us is today.
We’ll better understand your situation and be able to give you recommendations you can act on immediately to set plans in motion that will give you and your business the best chance of getting into 2022 and then working towards your medium and longer term goals.
Before any of that can happen though, you need to take action – the sooner the better – because for some companies, the end of this month will be too late.