Here’s your handy weekly round up of all the business and insolvency stories from the past week that you might have missed.
Silicon Valley Bank
Following the collapse of Silicon Valley Bank in the US, Silicon Valley Bank (UK) has been bought by HSBC for £1.
The transaction was announced by the UK Government, which confirmed the transaction had been facilitated by the Bank of England in consultation with the Treasury, using powers granted by the Banking Act 2009.
They confirmed that no taxpayer money was involved and customer deposits were protected. The Chancellor Jeremy Hunt said: “The Government and the Bank of England have facilitated a private sale of Silicon Valley Bank UK; this ensures customer deposits are protected and can bank as normal, with no taxpayer support.
“I am pleased we have reached a resolution in such short order. HSBC is Europe’s largest bank, and SVB UK customers should feel reassured.”
Speaking to reporters later, he was franker and said: “We were faced with a situation where we could have seen some of our most important companies, our most strategic companies, wiped out and that would have been extremely dangerous.”
A Bethnal Green based brewer has gone into administration but plans to return in the future once certain intractable issues have been resolved.
Founder Sam Dickison started the business in 2016 and issued a statement saying: “Due to an unworkable situation with our landlords, partly due to the pandemic and overhanging debt, we had to leave our premises on February 23rd. This was incredibly upsetting for us all and we were faced with no option but to put the company into administration.
“The administrators have helped us through the process of holding onto the brand which we’ve now confirmed has gone through. We are starting again and are planning to work with other breweries to help us make our beer for a while, while the long term plan is to build another site in another place.”
A previously award winning black country brewery has gone into voluntary liquidation citing crippling energy costs as the main reason.
Backyard Brewhouse formally entered liquidation last week with all staff being made redundant.
Formed in 2008, they grew to producing 650,000 a year by 2020 but the impact of the Covid pandemic had been tough.
A statement from the business explained: “By the end of 2021 we knew we still had a viable business but would need some help to survive.
“In January 2022 the business was sold in its entirety to an entrepreneurial company that was new to the brewing industry that took the business as a going concern with the desire to drive things forward.
“The founders stayed with the business for the following 12 months to help the new owners become familiar with the business, the broader trade and understanding the ins and outs of a cask ale brewery.
“Sadly, the efforts of the previous 12 months have not been sufficient to get the brewery to a stable state. The hangover from Covid combined with crippling energy costs and a broader financial crisis have contributed to an unsustainable situation.”
The Backyard Brewhouse joins several other midlands breweries that have recently closed or are stopping production this year including Morton Brewery, Slater’s Brewery and Digbeth’s Dig Brew.
Monks & Crane
A 160-year-old industrial supplies company, Monks & Crane, has gone into administration after suffering Covid-related losses.
Specialising in the sourcing and distribution of industrial products for UK customers, the business employed 190 people and had a £40m turnover last year.
A statement from the company said that despite the efforts of the management team to recapitalise and rescue the business, they were unable to reach a solid position and it reflects the issues facing many SMEs in the current challenging economic environment.
The business was severely impacted by Covid shutdowns and supply chain issues which was compounded by recent inflationary pressures. The consequent increase in its borrowing costs which significantly increased operational losses.
Management explored a range of options to rescue the business including implementing a turnaround strategy. The inability to access new funding undermined this process with the directors concluding that the company could not continue to trade in the absence of any new funding.
A Leeds based construction company has ceased trading and gone into administration after suffering significant financial challenges.
Castlehouse Construction undertook new build and refurbishment work across various sectors including industrial healthcare, residential and education.
The rising cost of raw materials alongside fixed price contracts and the cancellation and deferral of two anticipated contracts proved critical.
The business has ceased trading with the immediate redundancy of 26 staff with a small number retained to help wind down the operations of the business.
A statement from the business reads: “The construction sector has been heavily impacted by the ongoing economic challenges facing the UK. Castlehouse Construction was a well established business in and around Yorkshire but due to the rising cost of materials was unable to continue trading.”
Lomond Hills Hotel and Airth Castle
A historic boutique hotel in Fife has been placed into liquidation with all 17 staff positions being lost.
The Lomond Hills Hotel is a converted coaching inn that dates back to 1733 with 24 bedrooms and a restaurant. It also had a leisure centre and was a popular wedding venue in the local area.
A spokesperson said: “Like many boutique hotels in small villages, the Lomond HIlls Hotel experienced very difficult trading conditions during the challenging winter season.
“Facing a perfect storm of financial pressures, the directors in consultation with their lenders have made the decision to enter liquidation as the hotel was no longer able to trade.”
They cited that the hotel has been hit by the cost of living crisis on top of the impact of Covid lockdowns leading to cash flow problems that meant it was no longer viable for the hotel to trade.
Airth Castle Hotel in Falkirk also ceased trading and went into voluntary liquidation this week with the loss of 26 positions.
The 18th century building which was once owned by the family of Robert the Bruce had been a successful spa but the pandemic and soaring energy bills have proved insurmountable.
A statement said: “The Coronavirus pandemic had a major financial impact on the operating company as the hotel was forced to close for an extended period.
“Then, as the energy crisis unfolded and supplier costs increased, the company’s level of debt reached unmanageable levels and we had to take the reluctant decision to place the company into liquidation.”
More and more businesses are finding 2023 tougher than they imagined it would be – especially after some of the worst trading conditions in memory recently.
While some directors might be able to plot a way back to profitability, many realise that the only option available to them is to close and to close quickly and efficiently to allow them move onto their next venture.
No matter what situation your company is facing, we offer a free initial consultation for any director or owner who wants to better understand their options.
Even the toughest situations might have an exit but it might not always be easy to find the best route out without a little help. Get in touch with one of our experts, who will always be happy to help.