What were the most interesting and important stories this month?
We’re halfway through 2022 already and while the remaining months look like they will literally be longer and darker, high summer often instils a sense of optimism and brightness.
It’s the ideal time to catch up with all the business and insolvency news stories that have happened this month and any other administration, CVA and liquidation stories that might have escaped your notice at the time.
Enjoy our monthly summary!
Rutherford Health
The private cancer clinic which had facilities in South Wales, Northumberland, Liverpool, Somerset and the Thames Valley has stopped operating with patients being transferred to NHS services to receive outpatient care.
The group stopped taking on new patients when it became concerned that their treatment would not be completed and confirmed that it was going into liquidation due to “a critical lack of patient volume” after the number of cancer diagnoses dropped during the pandemic causing insurmountable cash flow problems.
Sean Sullivan, interim CEO and chief restructuring officer said: “We made several offers to the NHS, and whilst we secured some contracts they were insufficient. This added to severe financial pressures on the business and we had no option other than to place the group into liquidation.”
The clinics provided energy proton beam therapy, radiotherapy, chemotherapy and immunotherapy for both private and NHS patients.
Professor Patricia Price, chair of Radiotherapy UK, said the collapse of Rutherford was a disaster for cancer patients.
“The worry is that these patients end up adding pressure onto huge NHS backlog waiting lists. We have record cancer waiting times, the mother of all backlogs and a desperate shortage of NHS treatment capacity.
“A four-week delay in cancer treatment is a 10% reduction in survival. All this means more people are going to die, and this is so obvious and so clear. We’ve been saying this and nobody is listening.”
She also expressed concern that the 280 staff members who have lost their positions may not necessarily re-enter the workforce, further worsening staffing problems in radiotherapy services.”
A spokesperson for the Department of Health and Social Care said: “We want to reassure NHS patients that this news will not affect cancer waiting times, or the care or treatment of any of Rutherford’s NHS patients. The NHS will ensure all patients are supported and their care will continue under the NHS.
“The Rutherford does not provide surgery services which is what the NHS currently most needs to help tackle waiting lists. The NHS will do all it can to ensure cancer care continues as normal for patients and anyone affected will be contacted shortly.”
Carzam
Online used car dealer Carzam has gone into voluntary receivership and immediately blamed the failure on the financial troubles of fellow online car business Cazoo.
Founder Alex Chesterman blamed his firm’s share price drop on “irrational” investor fear despite recently admitting that the online dealer “may never achieve profitability”.
In an interview with The Times, Mr Chesterman said: “We couldn’t get any funding because share prices in Cazoo and Carvana went down by 85%.
“Business is all about taking a chance. We tried and it didn’t work. We didn’t get funding and we walked away.
“We were very honest in what we told everybody. We funded the business ourselves, everyone got paid and we closed it under voluntary receivership to close it properly.”
Carzam initially launched in 2020 with a promise to “accelerate motor trade change.”. Used car buyers could select cars on the website and have them delivered directly to their homes.
Braisby Roofing Liquidation
60-year-old Braisby Roofing based in Dunfermline has gone into voluntary liquidation with the loss of 20 positions.
First established in 1965, the family business suffered tremendously throughout the pandemic and subsequent lockdowns. Cash flow challenges due to late payments, rising costs and a significant six-figure bad debt made it increasingly difficult to continue.
William Braisby, managing director and grandson of the firm’s founder, said: “We have explored every option to continue trading but, regretfully, spiralling costs and shortage of materials coupled with unsustainable cash flow problems have led us to apply for voluntary liquidation.”
“Construction is a difficult business to be in right now and, like many companies, Covid severely impacted us which resulted in delays on projects where we were the principal contractor and significant bad debts from customers failing to meet their obligations.”
Gallito Group
Wetherby based manufacturing group Gallito Group has ceased trading with 16 members of staff being made redundant.
Efforts had been made to try and sell the company as a going concern but were unsuccessful.
A spokesperson said: “The Gallito Group is a specialist manufacturer of spray booth and surface preparation equipment but had suffered losses for a significant period of time as a result of a number of factors including onerous contracts and rising costs.
“At the same time the sales pipeline also suffered a downturn. Despite attempts before and during administration to sell the company as a going concern, the reluctant conclusion was there was no prospect of this being achieved and the business has now ceased to trade.”
Spirit.Ed
Online drinks retail and wholesale group Spirt.Ed has gone into administration following a period of “difficult” trading and an inability to raise new funding.
The businesses affected include DMD Operations and Vanquish Operations, owned the drinks e-commerce site Spirit.Ed and ran a subscription business called The Gin Club as well as drinks wholesalers Vanquish and OnStock.
A spokesperson for the business said: “Following a period of difficult trading conditions, management tried to find a new strategic funder and whilst negotiations were at a very developed stage, ultimately they were not successful.
“Administrators will therefore be aiming to realise the best possible value from the business and assets, in order to maximise the return to the creditors.”
Westfield Sports Cars
Westfield Sports Cars who also had an autonomous vehicles subsidiary have gone into administration which is a blow to the British automobile industry.
Founded on fitting V8 engines to lightweight sports bodies, the company most recently pivoted to electric bike engines and the Ford EcoBoost technology.
The 40-year-old business had 50 employees at its headquarters in Dudley and had produced over 13,000 cars based on the Lotus Seven kit. Founded in 1983, the company’s most recent innovation were driverless pods that drive between a business park and Heathrow’s busy Terminal 5 main building and was hoped to make them the “Boeing or Airbus of the automotive world.”
Administrators are looking to sell the business either whole or in part and have reported “encouraging” levels of interest so this may not be the last time the garage door shuts on Westfield.
Downs Mail
The Downs Mail, a free newspaper which covered Maidstone and Malling in Kent has ceased publication and gone into liquidation.
Delivering to 88,000 homes at its peak, the covid lockdown proved devastating for the business.
Founded in 1997 by former Kent Messenger editor Dennis Fowle, the newspaper saw its advertising revenue collapse 80% in the first few days after lockdown was announced in March 2020 and then was zero for the following three months.
Despite cost saving measures such as a restructure, reduction in staffing, editions and office space and taking out a bounce back loan, the business never fully recovered. Advertising grew again between 2020 and 2021 but never got to previous levels and talk of winter restrictions saw ad sales plummet once again in August 2021.
This year saw publication print costs rising 30% in a year along with energy prices climbing and despite increasing the price of the paper it became unviable to continue to publish.
Claire Fowle who took over as Chairman from her father in 2009 said: “The small team at the Downs Mail that has made this all happen have all worked so hard, particularly over the last two years with so many changes and challenges.
“Making them redundant after all their efforts has been the saddest decision of all. We just haven’t been able to recover and after 25 years, it is so sad for us and for the community we have been such a large part of.
“We have seen many other publications fail and never thought we would too but the combination of the lack of advertising revenue, rising costs and competition from free advertising online platforms means we also haven’t survived.
“We tried all we could to turn things around but it just wasn’t enough.”
Rococo
Reputably HM The Queen’s favourite chocolate brand, Rococo, has been brought out in a pre-pack administration deal by the Prestat Group who own coffee brand Illy.
They have bought three of Rococo’s five London shops and taken on all 60 members of staff too.
This was the second time the business has been in administration in three years. New chief executive Micaela Illy said: “We were very fortunate to be able to acquire the brand and build on the unique Rococo legacy.”
Adam Jones & Sons Transportation
A haulage business based in Halesowen has gone into administration with the loss of 50 positions.
Adam Jones & Sons operated a fleet of more than 70 trucks and provided haulage and distribution services across the UK.
Sadly with the advent of Covid having a material effect on the company and its prospects, without the prospect of investment or a sale the decision was taken for the business to be wound down in order to minimise disruption to the customer base and other stakeholders.
A spokesperson said: “The pandemic significantly impacted firms from all sectors in the UK, including those in the transport and haulage sector.
“Significant trading losses were incurred during Covid, mainly as a result of key customers ceasing production and the company was unable to return to profitability. Driver shortages and increasing fuel prices exacerbated the problems and as cash pressure mounted unfortunately the only option was to cease to trade.
Minerva Industries
The Wolverhampton based automotive supplier has gone into administration while seeking a buyer for the business.
Minerva Industries formed in the early 1980s as Wolverhampton Pressings but became a leading supplier of cosmetic parts to the automotive industry.
The company started experiencing trading difficulties in the past few months with various ongoing issues facing the global automotive industry including semiconductor shortages, rising costs, supply chain issues and other trading difficulties.
21 staff have lost their positions as a result of the immediate administration but the rest have been retained while a buyer for the business and its assets is sought.
SPAC Nation
A Christian church charity aimed at helping young offenders was wound up in the High Court after it “either failed to comply or partially complied” with statutory requirements relating to its finance according to the Insolvency Service.
SPAC Nation was incorporated in 2012 as a charity to advance Christianity by helping vulnerable young people and offenders.
The Insolvency Service investigated several allegations regarding complaints about church personnel before further investigations found that there were several discrepancies with accounts and donations.
The court concluded that the company operated with a lack of transparency, filed suspicious or incorrect accounts and most importantly, was insolvent at the time of the hearing. The company also remains subject of a statutory inquiry by the Charity Commission who are examining financial, governance and safeguarding matters at the charity.
Edna Okhiria, Chief Investigator for the Insolvency Service, said: “While SPAC Nation claimed it had noble intentions to support vulnerable and young people, our enquiries uncovered a different side of the charity.
“There were clear concerns around how the church group managed its affairs and SPAC Nation failed to properly account for income received from donations and other expenditure. The court recognised the severity of SPAC Nation’s actions and this sends a strong message that proper records and accounts must be maintained, even if you’re a charity.”
Autorestore
Autorestore, one of the UK’s leading providers of mobile body repair services based in Rushden went into administration this month with the loss of over 180 positions.
The business operated a fleet of over 130 mobile repair rigs and repaired over 30,000 vehicles a year.
It was reported that the business had been running at a loss and that turnover had also dropped, both affected by consumer demand and Covid.
A spokesperson said: “Significant losses in recent years due to challenging economic conditions mean that despite undertaking extensive marketing, the business unfortunately has ceased trading.”
Macmerry300
The Scottish bar group which ran 11 locations based in Dundee and Glasgow has gone into administration with immediate effect making 63 staff redundant in the process.
Due to the detrimental effect of Covid-19 on the hospitality industry and trading performance, the business incurred significant losses which resulted in substantial liabilities being accrued. As a result the directors resolved that the business was insolvent and should be wound up voluntarily.
A spokesperson said: “This is unfortunately another further example of a hospitality business being unable to withstand ongoing testing trading conditions against a backdrop of accumulated debt.”
Building Supplies Online
Online retailer Building Supplies Online has ceased trading with immediate effect and been placed into administration.
The company, founded in 2010, began as an online aggregates business before examping its product range according to nationwide demand. It was bought by Cairngorm Capital in 2017 which also owned other building supplies companies.
A spokesperson for the company said: “Businesses are battling difficult economic conditions with inflation and supply chain issues putting real pressure on their ability to operate.
“Sadly, without the prospect of investment, Building Supplies Online was unable to continue trading and regrettably, all employees have been made redundant.”
T Wilson and Sons
45-year old farming business T Wilson & Sons, based in St Helens, has gone into administration after battling against the negative effects of the Covid-19
The business operated an 1,800 acre farming section that grew vegetables and salad produce to providers all over the North West including Aldi and Hello Fresh. They also had a 25 truck haulage division that supplied produce themselves.
The haulage section was sold to Len Wright Salads in May but directors were unable to secure a sustainable future for the farming side of the business.
A spokesperson for the company said: “The last few years have seen an unprecedented squeeze on many farms and aspects of food producing businesses and, sadly, despite the strongly performing specialist haulage business, it was simply not possible for the company to keep trading as it was in the current economic climate.”
4D Pharma
Drug company 4D Pharma has gone into administration as a result of its lenders stopping financial support and demanding repayment.
The business is focused on live biotherapeutics which is a relatively new group of medicines that use bacteria in the human body – the microbiome – to tackle disease.
Oxford Finance, a lender which provides capital for healthcare and life science companies provided a credit facility of £24.4 million to the business in July 2021.
Directors were exploring opportunities to secure additional funding for the company in recent months but despite this Oxford demanded immediate repayment of the outstanding loans to the company which totalled approx. £11.1 million.
A spokesperson confirmed that the company wasn’t able to make the immediate repayment from existing cash resources so “with no immediate certainty of how that repayment could be made, the board requested that trading in ordinary shares be immediately suspended pending clarification of the company’s financial position.
“Subsequent to the suspension, the board was informed that Oxford had instructed that the company be placed into administration, in accordance with the terms of the lending facility.”
The board said they intended to work with administrators on proposals to rescue the company as a going concern, albeit with no guarantee that this would be successful.
With the number of corporate insolvencies above their pre-pandemic numbers, it’s no surprise to see more of these stories that we bring you every month.
If your business is undergoing financial stress or you can see certain troubling signs then you should use the time available to you now to get in touch with us.
We continue to offer a free consultation for any business owner or director who’s worried about what the next few months could bring them.
Working with one of our experienced team of expert advisors, they will let you know exactly what options you have and how each could positively impact you and your company’s future.
But only if you take the first step and arrange your appointment – and soon.