NEW YORK, Oct 29 (Reuters) - Tesco Plc (TSCO.L: Quote, Profile , Research) on Monday sold $2 billion of debt in two parts in the 144a private placement market, said a source familiar with the deal.

The sale included $850 million of 10-year notes yielding 1.18 percentage points more than U.S. Treasuries and $1.15 billion of 30-year bonds priced to yield 1.53 percentage points more than Treasuries.

Citigroup and J.P. Morgan were the joint lead managers of the sale, the source said


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Smoke ban rebel Nick Hogan has settled his case against former Provence boss Paul Kiely to remain at the Swan and Barristers in Bolton.

However, his future is still unclear after a notice appeared in the Bolton Evening News that a company called "Chipmunk City Ltd t/a the Swan" had called for a meeting under the Insolvency Act. Its director is Nick Hogan.

The MA could not reach Hogan or the pub but his solicitor Andrew Haffner of Manchester law firm Stripes said: "Nick is still at the pub. We have settled with the Kielys and agreed Nick is to stay at the pub."

Hogan was set to face former Provence boss and owner of the pub Paul Kiely at Manchester High Court on 1 November.

Kiely argued that Hogan had broken the terms of his lease by allegedly flouting the smoking ban.

Hogan is also due before magistrates on 12 November on charges of flouting the ban.

Earlier today, the news broke that the other two high profile rebels – Hamish Howitt and Tony Blows – had both decided to sell up.



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Elephant Loans and Mortgages has seen its share price haemorrhage as it revealed profits are likely to be below expectations.

The lender’s share price plummeted 14% to 0.750p today as its trading statement revealed a “weak performance” in the first half of the year.

The board has told investors it believes it is “prudent to anticipate that profits for the full year are likely to be below current market expectations.”

The statement adds: “In the light of changed market conditions and in order to ensure that the company is well positioned for future growth, the board is implementing changes to its regional branch structure.

“It is entering into an agreement regarding its insolvency solutions subsidiary, DebtSmashers Limited.”

Elephant is now consolidating its south of England operations, at Ashford,
Peterborough and Cardiff, into its Twickenham head office branch.

The board says it believes that it can achieve superior financial performance and improved customer service in the southern region by “centralising support functions” while retaining locally home-office based mortgage advisers.

The statement adds: “This change will result in immediate cost savings, which will be evident in the second half of the current financial year.”


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Investors in United Land Holdings - the "landbanking" company whose stand at the Ideal Home Exhibition 2006 was shut down by the Department of Trade - have learned they have no legal title to land they thought they had bought.

In all, investors paid in £5m - around £10,000 to £15,000 for each small plot of agricultural land they purchased, convinced by ULH that it could get planning permission for housing, so multiplying their money many times. Now they have nothing, not even a narrow strip of farmland.

The government pulled the plug on ULH "in the public interest" in April 2006 for operating an unregulated investment scheme.

In July 2006, director Martyn Hayes told Guardian Money he would challenge the ULH closure. "We are putting together an argument that will stop ULH investors from losing out. We have lawyers working on this."

However, they failed to attend a court hearing in July this year, leaving the company to go into liquidation.

Documents from the official receiver, part of the government's Insolvency Service, now reveal ULH never legally purchased the property it sold on to landbanking clients. These show that sister company United Land Acquisitions paid £1.5m for a 42.5 acre site at Melksham, Wiltshire - "substantially more than the market price for agricultural land." But this purchase was never registered as the £61,810 stamp duty was never paid. The official receiver does not have the cash to fund this, so the land remains with its previous owner.

Despite having no legal title to this land, ULH sold it on to investors.

Keith Cox from Bedford was one of the 470 ULH victims. He says: "I bought land in Wiltshire and also at Chicksands here in Bedfordshire. I have never received any legal paperwork to either site. I've lost more than £20,000. Just where is all the money? None of the official receiver's documents give any idea where it all is."

Mr Cox adds: "There were loads of glossy brochures. But it now appears to have been a delusion - all made up."

ULH directors including Hayes and Mark Faulkner made much of their "expertise" and "strong team of planning experts". But all their experience was in conservatory sales and installations.

Faulkner told the official receiver he had been at an exhibition selling conservatories in autumn 2003 when he saw landbankers marketing land without planning permission on another stand. He moved into that business.

Hayes then switched from conservatories to landbanking and set up the Land Investment Association, purportedly an independent body for the industry - in reality, just a rubber stamp for ULH.

The judge in the liquidation case said: "It is clear the public has been duped into investing in land that is presently of little value. There were fundamentally dishonest representations to investors. ULH was used as a personal moneybox."


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Luciano Pavarotti died with debts of at least £12 million, according to bank statements in Italy.

According to his account at the Monte dei Paschi di Siena bank in Bologna, the opera singer had a £7 million overdraft and owed more than £5 million in mortgage payments on his properties in New York, Monte Carlo and Modena.

The statements were reported in La Repubblica, an Italian newspaper, which also said Pavarotti had cash and stocks worth £14 million at other banks. The figures have not been confirmed or denied by the notary employed by Pavarotti’s family.

Giorgio Bernini, a lawyer for Nicoletta Mantovani, the singer’s second wife, said: “It is no secret that the maestro had debts. In the final years of his life he cut back on his performances and he also had very expensive hospital bills to pay.” However the figures may not reflect the full value of Pavarotti’s estate, which could be as large as £200 million.

“We have only just started taking the inventory. We have made a programme and we will be working hard up to December 6. These figures are just a tiny part, so you are only seeing a partial vision of his finances,” said Giorgio Cariani, the notary.

Fabrizo Corsini, the lawyer representing Pavarotti’s four daughters, expressed his surprise at the size of the debts. He said: “We never imagined Pavarotti would owe so much. We have received the paperwork and we are going through it with a fine-tooth comb to see what exactly he had or did not have.”

Meanwhile, Katia Ricciarelli, a soprano singer who was a close friend of Pavarotti’s, condemned the media circus about his fortune. “Big Luciano was a very generous man. I find all these quarrels about his inheritance disgusting.

"They started on the day the man was buried. He was a man who gave so much, and did not deserve to have his name finish up in the newspapers for these reasons.”


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Men are typically in more debt than women when they eventually seek help with their finances, a new report has suggested.

Chiltern discovered that men usually have 20 per cent more debt than women when they look to sort out their finances.

What's more, men are able to pay back less per month as a percentage of their contractual debt repayments.

This means it typically takes men 22 months longer than women to become debt free after opting for an informal debt management programme.

"The debt profile of men and women highlights the really difficult and unsustainable position both sexes are in," commented Chiltern's Joanne Gill.

"They have struggled on their own to manage debts for a number of years, getting caught in a cycle of borrowing to pay off creditors and then spending on credit again because they cannot afford to pay for the things they need in life, like their rent or mortgage and food."

Figures from the Insolvency Service show that 10,698 people sought IVAs in the second quarter of the year.

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Thousands of borrowers are poised to challenge lenders over debt insurance, in what has been hailed a new consumer revolution against mis-selling and "unfair" charges.

Consumer advice Web site MoneySavingExpert.com said 70,000 people had downloaded template letters in the past two months to try to reclaim costs associated with payment protection insurance (PPI).

The policies are designed to cover the repayment of loan, credit card or mortgage debt if people fall ill or lose their jobs, but has long been criticised as aggressively sold, expensive and failing to provide the anticipated level of cover.

There are more than 20 million PPI policies in place, according the Office of Fair Trading (OFT).

The industry generates 5 billion pounds-worth of premiums per year, but only 20 percent of that is paid out in claims, compared to 82 percent of car insurance revenues and 54 percent of home insurance premiums.

The OFT said last year that Britons could save 1 billion pounds per year with greater competition in the PPI market and, earlier this year, referred the sector to the Competition Commission.

Martin Lewis, founder of MoneySavingExpert.com, said PPI revenues were three times those from bank charges, which have come under fire of late.

Consumers have so far reclaimed an estimated billion pounds in "unfair" bank charges, levied when a cheque bounces or balances slip into the red beyond an agreed overdraft for example.


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A BUSINESSMAN who got into financial trouble claimed he had sold his firm to stop a creditor chasing him for money, a court heard.

Paving company owner Andrew Lauder owed Lafarge Aggregates Ltd more than £20,000 when he encountered cash difficulties.

The court heard that the 47-year-old had bought a £140,000 concrete mixer and was unable to keep up his payments in October 2004.

The businessman had an arrangement with Lafarge in which he was supplied with decorative concrete and other materials on credit.

Prosecutor Jenny Haig told Teesside Crown Court that by May 2005, Lauder owed £20,311 and concocted a story to dodge the debt.

A manager from Lafarge, which operates a quarry near Ferryhill, County Durham, tried to recover some of the cash, but Lauder, from Darlington, claimed he was trying to sell his business.

By June of that year, Lauder faxed a fake document purporting to show that the sale of the firm had gone through, the court heard.

Miss Haig said: "The effect of that contract of sale was that a person - John Clarkson - was said to have taken over the business and liabilities.

"The document was a forgery, it was false. There was no sale. The firm of solicitors referred to in the contract could not be found."

Lauder was declared bankrupt in August 2005, and also told the Insolvency Service he had sold his company earlier in the year.

But he went on to sign further agreements in the name of his firm, hired a van and took out adverts touting for business in local magazines.

Miss Haig said Insolvency Service investigators also discovered that none of the parties mentioned in the contract - the buyer and legal firm - existed.

Simon Myers, mitigating, said: "He was trying to juggle in order to keep the company going, but ge was in so deep he could not resurrect the situation.

"But he did not extend his line of credit with the creditor, and there is no suggestion that if he had come clean at that stage any different financial situation would have occurred."

Lauder, of Downing Court, admitted securing the remission of a liability and making a false statutory statement, and was ordered to carry out 200 hours of unpaid work for the community.

Judge George Moorhouse told him: "It would seem you foolishly behaved out of character."


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Otto Thoresen has, perhaps, the toughest job in British financial services. The Scottish chief executive of insurer Aegon UK has been asked by the Government to convince the young and impoverished that pennies spent down the pub would be better off in savings. His role is to crowbar financial planning into the public consciousness.

It won't be easy, but it's a message that is getting ever more urgent. In its financial capability report last year, the Financial Services Authority noted: "Nearly half of all adults have no savings at all… two million households are constantly struggling to keep up with their commitments… the under-40s are less capable than their elders (especially the 18-30 age group)… [and] unless action is taken, the population will store up problems for the future."

Record levels of personal debt, currently averaging £9,000 per household excluding the mortgage, and personal insolvencies, which topped the 100,000 mark for the first time last year, simply underline the problem. "There is a syndrome of hoping this will just go away," Thoresen muses.

Of course, it won't. Which is why the Government is co-ordinating efforts to make the public more financially savvy. It started by reforming the pension system so employees are automatically enrolled on company schemes. Thoresen has been tasked with the next step – designing a nationwide service to offer the public free, basic and impartial financial advice. He publishes his interim report today.

It doesn't take long to work out why the 51-year-old son of a Norwegian merchant navy captain was chosen for the job. His open and straightforward manner gives him a common touch and he brims with energy. "This business is not about pushing bits of paper around, it can change people's lives," he says. "If you get people thinking like that you can open a whole new level of engagement."

Numbers are not the easiest of concepts to "engage" with. They are more likely to turn people off than inspire them. But Thoresen, a qualified actuary, is passionate about their power. As a student, he discovered a "love of pure mathematics" that lingers today. "It is close to art… I still find maths fascinating," he says, though the delights of Sudoku bore him.

But it's Thoresen's other talents that have propelled him to the top of one of the UK's 10 largest insurers and a Government review. Early on in his career, while working for the marketing department at Scottish Equitable before it was bought by Aegon in 1994, he unearthed "an ability to write and get enthusiastic about what we do". "I have traded on it ever since. That's why I got involved in the Treasury piece," he says.

Enthusiasm is a quality he believes is vital to everyday success, recently spreading the word to students at his alma mater, Buckie High School. "I was told I had five minutes to say something useful. So I told them I had flown to Mumbai alongside [Celebrity Big Brother winner] Shilpa Shetty," he says. "That got their attention. But the one thing of use I said was that what makes a difference to an employer is attitude. Eye contact and level of enthusiasm."

Thoresen will need every ounce of that enthusiasm to engage with his new audience. "The concept of the service is to make people feel more comfortable dealing with financial issues," he says, stressing that all levels of society are deficient in their financial planning and stand to benefit from his efforts.

"We hope to provide a touchpoint for people to deal with saving for retirement and getting them more in control of their finances. There are a lot of good agencies out there for crisis management but there is nothing that is preventative."

His taskforce will publish guiding principles in today's interim report, before delivering a final proposal early next year, and is expected to suggest a range of delivery methods – the internet and telephone as well as face-to-face, possibly through outlets at the Citizens Advice Bureau, Post Office or other community hubs. He will also be careful not to duplicate the work done by crisis management agencies such as the National Debtline.

Financing will be key to its impartiality – so it will be funded equally by the Government and the financial services industry. Early estimates of £50m annual running costs may be revised upward depending on the scale of the project.

Thoresen has an even bigger goal, though. "The industry has to step up to the challenge too," he says. "The biggest challenge for us long term is to engage with a younger generation of savers. We need products that are easier to understand. So far, the industry has been reluctant to focus on the customer. Products were driven by actuarial capability rather than consumer needs, which causes barriers."


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WASHINGTON (Reuters) - U.S. President George W. Bush on Thursday said the International Monetary Fund should help Liberia cancel its debts and that Treasury Secretary Henry Paulson would take that message to IMF meetings this weekend.

His call was later echoed by Liberian President Ellen Johnson-Sirleaf and U2 lead singer and debt activist Bono.

"We are committed to helping you relieve your debt," Bush said after meeting with Johnson-Sirleaf in Washington ahead of the IMF and World Bank meetings starting on Saturday.

"It's very important for our friends in the IMF to recognize that debt relief for Liberia is a part of our agenda, and I would hope that they would help you, help you with debt relief. I think it's important," Bush said.

Bureaucratic hurdles and resistance by some IMF donor nations, including large developing countries, over how to finance the IMF's portion of the debt -- around $900 million (440.5 million pounds) -- have stalled Liberia's entry into a global debt relief program.

Johnson-Sirleaf, Africa's first woman president, last year inherited a country ruined by a 14-year civil war, rampant corruption and foreign debts of about $4.5 billion, which creditors promised to cancel.

Writing off the debt would give Liberia more resources to spend on anti-poverty and reconstruction programs.

"Liberia has been waiting patiently for over a year for the international institutions to reach agreement on financing debt relief," Johnson-Sirleaf said in a statement. "We have done our part by establishing a strong record of prudent economic management and policy reform.

"We urgently need to move forward to resolve this issue as quickly as possible," she said.


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A gambler known as the Fat Man has won his appeal against a High Court ruling to pay back a £2m debt amassed in just one night at a London casino.
Businessman Fouad al-Zayat, a regular at Aspinall's, lost £23m over 12 years.

After a dispute during his biggest loss in March 2000, Mr al-Zayat dishonoured a cheque for £2m worth of gaming chips.

A judge ruled he had an arguable court case as Aspinall's delay of almost six years before trying to sue him for the money was an unlawful offer of credit.

Row over croupiers

The High Court ruling in March ordered Mr al-Zayat to settle the £2m debt plus legal costs because he had no realistic defence if the case went to trial.

But on Friday, three judges allowed the appeal, meaning Mr al-Zayat can now challenge the debt at a trial.

Aspinall's is considering an appeal to the House of Lords.

The row broke out at the club after Mr al-Zayat asked for a change of croupiers but was told none were available.

Later that night, he became angry when he found out there had been staff who could have taken over.

Aspinall's...permitted him for another six years to go on gambling so that he could lose millions more pounds to them

Lord Justice Sedley

He demanded four house cheques to be returned and claims Aspinall's accepted his own cheque on the understanding it would not be cashed until their dispute was settled.

The gambler then told his bank not to honour the cheque and claimed in court it represented credit which is unlawful under the Gaming Act.

Lord Justice Sedley said: "Piqued at the club's failure to change a croupier, Mr al-Zayat, although he was undoubtedly good for the amount, dishonoured a cheque for £2m which he owed Aspinall's for gaming chips.

"Aspinall's, instead of burning their bridges with Mr al-Zayat by suing him on his cheque, permitted him for another six years to go on gambling so that he could lose millions more pounds to them.

"Then, at the last permissible minute, they sued him."

Fellow judge, Lord Justice Lloyd, said the action was brought only three days before the end of the six-year limit for a claim on the cheque.

In that time, Mr al-Zayat carried on gambling at Aspinall's and lost another £10m, he said.

Lord Justice Sedley said he would allow the appeal but said it was one of those cases "which have everything to do with law and nothing to do with justice".



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A JUDGE has criticised an apparent attempt to keep a High Court hearing involving Leeds United chairman Ken Bates secret.
Mr Bates and two other directors made an application to be allowed to continue to remain directors of the club after their involvement in a previous Leeds United-related liquidiation left them in breach of insolvency rules.

Judge Langan QC accepted the application but then revealed the court had received a request ahead of the hearing that the names of Mr Bates, his legal advisor Mark Taylor, and club director Shaun Harvey - none of whom were in court yesterday - remain anonymous.

He said: "I want to raise one point as a matter of concern. There was a telephone call to court yesterday taken by a fairly junior member of staff with reference that this case be listed without reference to the names of the parties.

"There are some names for which anonymising on the list is essential, the obvious example being family cases. But I don't know what prompted the request to be made in this case.

"Put bluntly, if it was done in this case, it should have to be done in every case. The public is entitled to know what cases are being heard."

Louis Doyle, the barrister representing the three directors, told the court that he wasn't aware of the approach being made and Mr Bates last night said he "knew nothing about it" and that he would be "very happy to be named".

The legal firm which made the application said it was thought it would be in the "best interests of the hearing".

Mr Bates tonight described the successful application as "another little win", adding "which isn't good news for the people who tried to cause trouble."


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Cheyne Finance has become the first structured investment vehicle to stop repaying its short-term debt after the administrator of the troubled fund won court backing to declare it in breach of insolvency tests.

The move came as Cheyne Finance entered final negotiations with four banks bidding for its assets, which stood at $6.6bn (£3.2bn) at the start of last month.

The hold on repayments of the SIV’s commercial paper will hit short-term debt markets just as they had begun to show some signs of recovery from the ravages of the summer credit squeeze.

But Neville Kahn, a partner at Deloitte, the administrator, said the insolvency would not force it to sell assets at firesale prices and would make it easier to push through a sale.

“It will mean that we will get to a solution quicker,” he said. “We hope to have a recommended deal very shortly to communicate to creditors.”

The SIV still has $1.3bn of cash and could have continued to repay maturing commercial paper until at least the end of this month.

The administrator won backing from the High Court in a sealed judgment on Wednesday, said people present at the hearing.

However, the court’s interpretation of the insolvency test – using a balance sheet measure, in spite of the SIV’s cash pile – could prove controversial, as many SIVs would be insolvent if a similar measure was applied.

Mr Kahn refused to say which banks were bidding or at what prices, but said it was wrong to assume the holders of mezzanine debt – the lowest-rated tranche – would be wiped out.

That suggests holders of the top-rated commercial paper will be repaid in full, in spite of the insolvency.

Cheyne Finance, set up and managed by Cheyne Capital, the $12bn London hedge fund, is one of several vehicles either struggling to find new financial backers to support a restructuring or have triggered restrictions on their operations.

Two SIV-lites struggling to restructure have turned to Barclays for support, although Golden Key, set up by Swiss-run hedge fund Avendis, is in dispute with the bank about whether it has to repay a loan it drew down, reported to be worth $250m. Mainsail II, an SIV-lite run by London hedge fund Solent, had a rescue plan backed by Barclays turned down by investors.

In total, more than $42bn of assets in SIVs and SIV-lites are facing limits on their operations.



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Portland Business & Financial Solutions Limited has been appointed to handle the affairs of T A Supplies Limited, based in West Sussex.

T A Supplies Limited were behind the Socca Box and Little Rascals brands at the Manor Royal Leisure Centre, Crawley - organising a league for five-a-side football teams, as well as providing the children's indoor play area and party location.

The Directors of T A Supplies Limited consulted Peter Howard of Portland's London Office and despite eleventh hour attempts to sell the company, there was no alternative but to finally cease trading.

Peter Howard commented 'Unfortunately there was not sufficient support for the five-a-side football league and the good weather has meant parents prefer taking their children to outdoor play areas, staying away from Little Rascals at the leisure centre.'

The T A Supplies Directors regret that customers will be let down by this action, the company will now go into Creditor's Voluntary Liquidation and two Directors at Portland will be appointed as Liquidators.

Being the largest independent business recovery firm in the South, Portland operates from offices in Whiteley, Poole and London and has a vast experience in handling such matters.

Portland staff members will continue to work hard to contact all members of the public with future bookings, to minimise the disappointment that arises from the T A Supplies Limited failure.

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FIGHTING the obesity epidemic could bankrupt the NHS, the Government has been warned.

The National Obesity Forum has called on the Government to confront the food industry about the problem and to factor in obesity when developing new transport policies.

The warnings come as the Foresight report predicts half the UK population will be obese within 25 years.

Wales’ chief medical officer, Dr Tony Jewell, will list obesity as one of his top five priorities in his annual report, to be published this month.

He said, “There is an obesity epidemic happening at the moment and it hasn’t peaked yet.

“We have to make healthier choices easier choices and that applies to transport policy and encouraging people to do more exercise.”

And consumer groups last night again called on the Government to introduce a 9pm watershed for junk food advertising, in a bid to address children’s appetites for calorie-laden foods.

Speaking at its fifth annual conference, the chairman of the National Obesity Forum Dr Colin Waine said despite warnings to successive governments in the past three decades, there has been no really effective joined-up action to combat the epidemic. He said the financial cost would have “huge implications”.

“It could bankrupt the NHS,” Dr Waine added.

He said, “It may need government to confront the food industry . . . it also means governments rethinking environments to plan them around the pedestrian, not the motor car.

“It does require a large amount of political courage to do it.

“Even with the generous funding we have had, the problem is escalating so quickly we are not just going to get an epidemic of obesity, we are going to have an epidemic of type 2 diabetes.”

The financial implications come not only from the cost of treating associated health problems – such as diabetes and heart disease – but from investing in equipment. It emerged yesterday that a 28-stone dummy has been created to help emergency services train staff how to safely lift and move extremely obese people. It is thought to be the largest and heaviest in the world and was made by Corwen-based firm Ruth Lee Fire and Rescue Equipment.

It needs six people to lift it.

It is estimated around 9% of the NHS budget in Wales is already spent on treating diabetes. The International Diabetes Federation believes cases of the disease are likely to rise by 28% by 2030.

Wales is already starting to see overweight children being diagnosed with type 2 diabetes, a condition which was previously only diagnosed in the over 40s.

Roger Williams, the Liberal Democrats’ Welsh affairs spokesperson and MP for Brecon and Radnorshire, last night accused the Government of fuelling the problem of child obesity by cutting lottery funding for the Sports Council for Wales.

By 2012, government changes to the National Lottery funding will have cut £100m in lottery funds from the council’s budget.

He said, “If tackling child obesity in Wales was really a government priority, Labour would have ensured an increasing level of grassroots sports funding.”

The Welsh Consumer Council and Which? last night said the introduction of a 9pm watershed on junk food advertising must be a priority for the Government.


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There’s Armageddon, and then there’s the alternative – a massive funding vehicle the banks have dreamed up to avoid a fire sale of financial assets. This $75bn-plus vehicle should allow US banks to avoid something seriously nasty. But that does not necessarily make it attractive. It all depends on the details.

The news of its imminent creation was somewhat surprising, given how well the asset-backed commercial paper market had seemed to recover its poise. But, in one – $400bn – corner, things were not looking so good. Structured investment vehicles are fancy names for the oldest financing trick in the book – a company, often sponsored by banks, that buys and holds financial assets (such as credit card and trade receivables, auto loans and, of course, mortgages) and funds this partly through the issuance of short-dated paper. SIVs, crucially, do not have the benefit of huge credit facilities from large banks. So in the event that senior debt cannot be rolled over, assets have to be sold. This represents a serious refinancing risk if the markets seize up and, because of this, the assets in the SIVs were meant to be high grade and high quality. But they did also have a sprinkling of subprime which, like shouting fire in a crowded theatre, meant investors have stampeded out of SIV paper, full stop.


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Credit checking firm e-bcm calls on government to reverse its decision to withdraw funding

Andrew Charlesworth, CRN 12 Oct 2007

Online credit checker, e-bcm, is calling on the UK government to reverse its decision to scrap the Better Payment Practice Group.

Dissolution of the BPP Group will mean UK small businesses will have nowhere to turn for advice on bad debt and late payments.

The Department for Business, Enterprise and Regulatory Reform (formerly the DTI) recently announced that it is cutting funding through the Small Business Service for the Better Payment Practice Group, which provided advice and guidance to small firms on avoiding late payments and bad debts.

“It is small businesses that suffer most as a result of bad and late payment and the withdrawal of government support sends out completely the wrong message, especially at a time when credit is getting tighter and more firms are likely to be put out of business due to cashflow problems," says Dennis Scott, commercial director of e-bcm. "Effectively, the government is cutting small businesses adrift. We think that it will end up costing the taxpayer money, in lower company profits and lost tax revenues.”

Last year, research by BACS Payment Schemes showed that at any one time, UK small businesses are owed almost £16bn and that 59 percent of SMEs have experienced problems with delayed payments at some time.

A separate report from Leeds University Business School stated that the UK small businesses write off an average of £14,000 in bad debt each year.

“We know from our own work with customers that the problem is getting bigger not smaller and disbanding the Better Payment Practice Group is a move in entirely the wrong direction," says Scott. "The government should

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Plans for a US-style insolvency regime for UK banks that would hand administrators sweeping powers in a collapse were on Thursday proposed by Alistair Darling in his formal response to the Northern Rock crisis.

In a statement to MPs, the chancellor, who revealed he had a Northern Rock mortgage himself, set out steps the government could take to prevent a repeat of Britain’s first run on a bank in more than a century.

They included raising the £35,000 ceiling at which savers’ money is protected, faster pay-outs to depositors and maintaining “critical” banking services such as direct debits and the use of cash machines. But Mr Darling was attacked by the opposition on his handling of the crisis. Banks said they would resist moves to raise the savings guarantee to £100,000 – a level the chancellor floated in a newspaper interview.

Among the options in the consultation paper was an administration system for insolvent banks. Some countries, such as the US, have a separate re?gime for banks. The proposals would allow administrators to sort out problems more quickly by attaching the same strategic importance to banks as to essential services provided by utilities. An administrator could take over and operate client accounts, with depositors given higher priority with creditors.

“This new regime would mean depositors are insulated from a bank that has failed, greater compensation for them, and certainty their compensation can be paid out quickly,” Mr Darling said.

George Osborne, shadow chancellor, said the regulatory system put in place by Gordon Brown had “failed its first serious test” and Northern Rock’s woes had made the government’s boasts of financial stability “ring hollow”.

The consultation paper comes four weeks after the Newcastle-based bank, one of the UK’s largest lenders, was forced to seek emergency financial help from the Bank of England.

In spite of assurances that the bank remained solvent, savers queued to withdraw their money. Only when the Treasury guaranteed their deposits did the crisis abate. By then, customers had taken out about £2bn and its shares had plunged. Mr Darling said: “The availability of credit has increased in the last few weeks but we cannot be cer?tain when the instability will end.”



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Alan Tabley, of Vine Court, Box, also failed to disclose the extent of company property to the liquidator and did not preserve accounting records for a three year period.

Now the 59-year-old, who was an officer of Kempton Properties Ltd which went into voluntary liquidation in 2003, could face the prospect of a jail term.


Tabley pocketed more than £50,000 worth of property from the company when it was being wound up, a judge at Swindon crown court was told today.

In January he took £21,750 in shares and a property on Heathfield, Chippenham, another £12,542 two days later and a further £18,623.99p from the proceeds of sale of another property on Heathfield.

He also did not declare the full extent of the company's property to the liquidator on May 14, 2003, or retain the accounts from May 2003 up to May 2005.

Tabley pleaded guilty to three counts of removing part of company property.

He also admitted one charge of failing to disclose the full extent of company property to the liquidator and one of not retaining accounts for three years.

Tabley pleaded not guilty to failing to keep proper accounts, removing £2,000 in cash from the company, failing to deliver all documents to the liquidator and failing to comply with parts of the Insolvency Act.

He had originally denied all of the allegations but changed his pleas to guilty on the five matters meaning a trial will not be necessary.

Oliver Willmott, prosecuting, said "These pleas have been considered and are acceptable. We propose to deal with the outstanding counts at sentence."

Simon Morgan, defending, asked for the case to be adjourned so a pre-sentence report can be prepared on his client by the probation service.

He also said that Table was receiving psychiatric assistance' for some time and said he may submit a report from a psychiatrist.

Recorder Nicholas Haggan QC adjourned the case to Thursday November 29 and released Tabley on unconditional bail.

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Bankruptcy is the legal situation in which a corporation may temporarily or permanently close, due to the impossibility of fulfilling its obligations.

In El Salvador, bankruptcy is regulated under several legal authorities, such as: the Code of Commerce, the Law of Commercial Procedure and the Code of Civil Procedure. The process itself is basically to immobilize the goods of the debtor and supervise that such goods are equally distributed among its creditors. During bankruptcy process, a Trustee is named and is responsible for administration of the estate and liquidation of the goods/assets of the corporation.

Besides the process of bankruptcy, a debtor, may also request a suspension of its payment obligations; however both legal processes are obsolete as once a corporation or a debtor is in an extreme debt, banks and financial institutions immediately file Executory Proceedings in order to obtain the appointment of an Intervenor to exercise authority over the corporation’s assets. Any other creditors that appear in Court will embargo the same properties, triggering a technical joinder of legal actions or claims into one. Notwithstanding the aforementioned, secured or preferred creditors have priority over the rest of the creditors.

This does not alleviate the obligations of a debtor; furthermore, it does not guarantee either a restructuring or a re-organization of the debt that may assure that the creditors will indeed receive their payments.

It may also be the case that corporations have goods whose assets are worth many times the amount owed by it. In this circumstance they will be condemned to lose all their assets in order to pay their debts if they don’t find potential buyers.

In contrast to the Salvadoran system, other countries have modern insolvency regimes, in which honest debtors seek protection under a special procedure. In the United States, the US Code, regulates Bankruptcy and Chapter 11 contemplates the re-organization of a corporation that is in bankruptcy. Chapter Eleven allows large corporations facing a complicated financial situation to declare themselves in bankruptcy and may temporarily suspend their payment obligations. They also have to generate a plan of re-organization of their corporation, and it has to be approved by creditors and confirmed by a Bankruptcy Court, allowing the corporations not to close their businesses and to move on gracefully.

CAFTA has caused a series of reformations to the Salvadoran legal system, allowing us to anticipate the adoption of more sophisticated bankruptcy procedures in the near future. Adoption of such procedures will foster the investment environment in El Salvador which has always been in the vanguard of progress for Central America.



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UP to nine people have been made redundant after a lubricant distribution company formed less than two years ago was forced out of business.

Brett Oils Business Services Ltd (BOBS) was formed by managing director Alistair Hain in May 2005 when his old employer Brett Oils sold Ovoline Lubricants to German company Fuchs Lubricants, and its Brett Fuels business to Flogas from Leicestershire.

BOBS bought a customer list from Fuchs, and set up in business distributing the company’s products in the North-East.

The new company started out operating from Brett’s premises at Pipewellgate in Gateshead. The business traded profitably for its first 18 months and then took new warehouse and office premises at Morston Quays in Wallsend in March this year.

Regional development agency One NorthEast backed the expansion plans and helped to create several jobs. Mr Hain said the company was hit “by several problems outside its control” including allegations that the business was passing off as Brett Fuels, and a fine for an alleged breach of environmental regulations involving a small amount of oil found in the Tyne. The latter was later quashed on appeal.

Mr Hain says those issues, along with other problems with commissioning the new premises put pressure on the company’s finances and he moved to sell the ‘packaged distillates’ side of the BOBS business.

The company’s bank supported a revised business plan in July this year but then Mr Hain says delays in completing the legalities of the new funding package meant that by the end of last month BOBS was technically insolvent and he started voluntary liquidation proceedings.

A creditors’ meeting will be held next Tuesday, October 16, at RMT accountants in Gosforth.

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SKY BLUES fans could be forgiven for thinking it's the beginning of the end if the club goes into administration.

But other clubs - notably including Leicester City - have survived it.

With debts of £38 million, very few assets apart from players and on-going losses, Coventry City Football Club are in a difficult position.

If they can find an investor who'll put in enough to get them into the Premiership, they'll get an automatic payment of £30 million and brighter prospects.

Going into administration could rid them of their debts - but it will also lose them points in the Championship, under the Football League's rules.

Political editor Fiona Scott tries to unravel the rules which could be as important to Sky Blues fans as an under-standing of the off-side rule.


So what does administration mean?
When a company is failing, its directors or lenders can call in an "insolvency practitioner" to run the firm.


He or she will look at ways of making the business profitable and will negotiate with creditors about the debts.


The aim is to reach a legal agreement called a "Company Voluntary Agreement" about how debts will be paid.


Are there any exceptions?


Yes. If a company in trouble has borrowed money from a lender (usually a bank) before September 2003 and given that lender security by way of a "fixed or floating charge", that lender can block the appointment of an insolvency practitioner.


This appears to apply in the case of Coventry City Football Club.


What if the creditors and insolvency practitioner can't agree?


The insolvency practitioner will then look at "administrative receivership" - essentially trying to find a buyer for the business.


The proceeds of the sale will then go to pay off the creditors.


Will creditors get all their money back?


It depends on how much the business is sold for, and the status of the creditor.


They'll all have the chance to attend a special meeting with the insolvency practitioners.


Do some creditors get preference?


Yes. Bank debts secured against assets and preferential creditors such as the Inland Revenue, get paid back first.


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Pensioners who fail to claim the benefits to which they are entitled risk joining the rising number of older people who are slipping into insolvency.


William and Kathleen May-Chappell found they were eligible for additional benefits (see case study)
The number of over-65s declared bankrupt has more than doubled in the past five years, according to accountants Wilkins Kennedy. Retired people now account for 7 per cent of all bankrupts, up from 3 per cent in 2002.

Experts blame the debt crisis facing pensioners on the facts that they are living longer but may have inadequate savings to cope with rising food and utility prices. They say the complex benefits system has also been a contributing factor, as it deters pensioners from claiming and leaves them out of pocket by more than £2bn.

Gordon Lishman, director general of Age Concern, said: "Many pensioners are put off claiming benefits because they find the system confusing. Yet this is money that is rightfully theirs."

Many pensioners have turned to credit cards or mortgages to raise the extra funds needed to supplement their retirement income. But recent increases in interest rates mean that these additional debts are catching up with them, and reaching unmanageable levels.

Keith Stevens, insolvency partner at Wilkins Kennedy, said: "Although attitudes towards bankruptcy have changed dramatically, the older generation still feel the stigma of bankruptcy and are often reluctant to ask for help until it is too late."

Anyone relying on the state pension alone at just £87.30 a week for a single person would be scraping by on a fifth of national average earnings at £23,250.

Even if this amount is topped up with means-tested pension credit, pensioners are still only entitled to £119.05 per week.

To qualify for the full basic state pension, you need to build up National Insurance contributions over 39 years for women and 44 years for men – although both these requirements will fall to 30 years after April 2010.

The retirement age for women is set to increase gradually from 60 to 65 between 2010 and 2020. The retirement age for both men and women is then set to rise to 68 by 2046.

Depending on their circumstances, pensioners are eligible for several types of benefit, including housing benefit, council tax benefit and pension credit.

Anyone who wants to enjoy a financially secure retirement should begin planning as early as possible.

Tom McPhail, head of pensions research at asset managers Hargreaves Lansdown, said: "One of the advantages of saving into a pension fund is that it diminishes the risk of bankruptcy in retirement."

If you lock your savings into a pension fund you are less likely to spend that money before you get to retirement. Also, most pension assets are protected from creditors in the event of bankruptcy.

A government spokesman said: "It is therefore very unlikely that a bankrupt who is retired will be asked to make any contribution from their income."



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What are a company director's obligations to creditors if the firm gets into financial difficulties? Bryn Robertson of Davenport Lyons solicitors advises

The problem

I'm a company director. We're experiencing serious cash-flow problems and can't pay our creditors. I suspect we may go into insolvent liquidation. Will I be held personally liable for the debt of the company?

The Law

"Wrongful trading" as set out in section 214 of the Insolvency Act 1986 applies when a company has entered into insolvent liquidation and the conduct and affairs of its directors will be investigated. In particular, a liquidator will see if there was a time at which a director knew, or should have realised, that the company's creditors were likely to go unpaid. From that moment he can be personally liable unless he does everything reasonably possible to minimise creditors' losses.

Objectively, the law assumes a minimum standard of skill and care that can be expected of any director. Subjectively, the law will take into account his particular skills and what can be expected of him in that context, in addition to the basic minimum standards.

If a director is found liable for wrongful trading, he will not receive a criminal record. The purpose of the legislation is to compensate creditors for the loss caused by the director's conduct, with the guilty director being ordered to make a payment. The courts can also disqualify him for up to 15 years.

Where a claim is brought for wrongful trading against a number of directors, the position of each director is individually assessed.

Expert advice

The key priority for a director who realises that the company cannot avoid going into insolvent liquidation is to minimise potential loss to creditors. He should raise the problem with the rest of the board immediately and then seek advice from an insolvency practitioner and solicitor.

As the interests of creditors are paramount, the directors cannot, for example, enter into an agreement to distribute the company's assets to shareholders without proper provision for all creditors. Neither should directors choose to pay friendly creditors ahead of others, nor take any arrears of salary, dividends, pension payments or repay directors' loan accounts.

To avoid wrongful trading, directors may have to cease trading. This can happen without resorting to one of the insolvency procedures if the company is solvent and can pay off all its debts. If not, the directors must instigate a formal insolvency procedure.

Check list

• If in financial difficulty, hold regular full board meetings, ensure commercial decisions are reported in full in the minutes and ensure that accounts are properly managed.
  
• Consider preparing cash-flow forecasts over certain periods and then updating them in light of actual results - take into account past performance, current conditions and future prospects.
  
• Ensure directors have up-to-date financial information.
  
• If you suspect the company will go into insolvent liquidation, seek professional advice from a solicitor and insolvency practitioner.
  
• Don't incur further credit until such advice is received.
  
• Take every step to minimise losses to all creditors equally.
  
• Do not: pay out shareholders or distribute profits without proper provision for all the creditors pay friendly creditors ahead of others take arrears of salary, dividends, pension payments or repay directors' loan accounts.

Beware!

A director found liable for wrongful trading can be ordered to pay a contribution to the assets of the company, which may compromise all the debts in the worst-case scenario, followed by a disqualification of up to 15 years.


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PARENTS end up an average of £1,140 in debt in the year following the birth of their first child, a survey showed.

Four out of ten parents go into the red in the 12 months after having a baby as they struggle to balance the increased costs associated with their new child and a loss of income.

The research, by MoneyExpert.com, found while the average parent goes £1,140 into the red, 7 per cent end up owing £2,500 after the first year and 2 per cent owe more than £7,000.

About 39 per cent of parents saw their income drop after having a baby, with one partner giving up work or reducing their hours in the first few months after the birth.

Nearly three out of ten people asked family to help them, while 22 per cent used a credit card and 10 per cent took out a loan.

Sean Gardner, the chief executive of MoneyExpert.com, said: "Financially, a new baby can cause havoc."

This article: http://news.scotsman.com/uk.cfm?id=1583402007



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Responding to a new survey by Wilkins Kennedy which showed that bankruptcy among the elderly had increased, on expert has suggested most people are "quite canny" when it comes to personal finance.

A spokesperson for Saga said that while there are people facing financial hardship because of how easy it is to obtain credit, many people have a "strong dislike" for getting into debt.

However, society's attitude towards debt appears to have changed, he said, arguing that people seem to be "happier" with higher levels of debt.

According to Wilkins Kennedy, the percentage of people filing for bankruptcy who are retired has doubled over the last five years.

The firm noted that the number of pensioners who have become insolvent over the course of the last year rose to 7,900 from 900 in 2002.

Keith Stevens, insolvency partner at the company, said that many older people go bankrupt because their pension is their only income.


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The number of pensioners who have been forced into insolvency has soared in the last five years, new figures showed today.
According to the accountancy firm Wilkins Kennedy, around 7% of all those who have filed for bankruptcy or taken out an individual voluntary arrangement (IVA) in the past year were retired - a total of 7,900 people. This compares with a figure of just 3% for all 2002 - some 900 pensioners.

The figures reflect the rising number of insolvencies in Britain - from 30,587 who became bankrupt or took out an IVA in 2002 to 113,445 during the year to the end of June 2007.
The firm said rises in fuel and food prices were taking their toll on pensioners' finances. It warned the trend was likely to continue as increased life expectancy meant pensioners' limited savings were put under further strain.

The group said the financial difficulties were added to by the government's complicated tax system and pension credits system that left many old people unaware of the benefits they were entitled to.

Keith Stevens, insolvency partner at Wilkins Kennedy, said: "Although attitudes towards bankruptcy have changed dramatically since the days of debtors' prisons the older generation still feel the stigma of bankruptcy and are reluctant to ask for help until it's too late.

"At the same time they are often unused to being offered high level of credit and may take on unmanageable levels of debt without considering how they will make repayments when their income falls back on retirement."

He said pensioners who went bankrupt were usually not homeowners and had few assets to fall back on when they reached retirement. He added that there was a higher than expected concentration of bankruptcies in rural areas.

Recent research showed one in five retired homeowners - a total of 1.1 million people - were still paying off a mortgage as they entered retirement.

Separate research from the charity Age Concern revealed that more than 50% of pensioners are not receiving all the benefits available to them, meaning an estimated £4.2bn worth of benefits is left unclaimed each year.

Mark Neal, managing director of property specialists Homewise, said the bankruptcy figures reflected the rising financial crisis affecting Britain's pensioners.

Mr Neal, whose firm provides lifetime leases for pensioners who want to sell their homes to release capital, said: "It used to be the case that many of our customers were trying to free up capital to fund their leisure time during their retirement.

"Now almost all the pensioners we deal with are selling their homes to service debt."

Shadow work and pensions secretary Chris Grayling called the bankruptcy figures "profoundly depressing" and blamed the recent pension crisis and stealth taxes introduced by Gordon Brown for "making life immensely difficult for many retired people".

A government spokesman defended Labour's record saying average pensioner net incomes had been rising faster than earnings.

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Leading City lenders today accused the government of reneging on a promise to legislate this year to protect their assets if foundation hospitals go bankrupt.
Heads of companies that lend more than £500m a year to the NHS called for an urgent meeting with Alan Johnson, the health secretary, to avert a crisis that could cause chaos across the financial system.

They said NHS foundation hospitals enjoy independence from Whitehall control on condition that the Treasury will not bail them out if they become insolvent

Leasing companies, which provide the trusts with scanners, IT systems, medical equipment and buildings fear they could be in a double bind if a foundation crashes. Their loans would not be guaranteed, but they would be unable to repossess buildings or equipment because the government has assured patients that hospital services would not be interrupted if a trust collapsed.
In that event the lenders would be secondary creditors and more exposed than on equivalent deals with the private sector.

The big leasing companies became anxious towards the end of 2005 when University College foundation hospital in London delayed paying its bills for several months during a cash flow problem. The trust has since strengthened its finances, but retains the second highest financial risk rating on a scale set by Monitor, the foundation trust regulator.

The leasing companies are concerned that all foundation trusts are entering a period of higher risk as competition between hospitals intensifies, creating winners and losers in the race to attract patients.

Stephen Sklaroff, director general of the Finance and Leasing Association, asked Mr Johnson for a meeting "on the urgent need for secondary legislation on the winding up of foundation hospital trusts."

He told the health secretary: "Health ministers promised the leasing industry in autumn 2006 that regulations would be placed before parliament during 2007. We have now heard from your officials that this will not happen ... You will understand why association members active in the NHS market are deeply frustrated at the lack of legislation."

Mr Sklaroff told the Guardian: "We have been in discussion with the Department of Health since early 2004 on the urgent need for an insolvency regime for foundation hospital trusts ... Hearing of yet another postponement is bad news for the NHS."

The Treasury's comprehensive spending review - due this month - is expected to reduce the rate of growth in NHS spending, encouraging trusts to rely more on asset finance. But this might not be forthcoming if the companies did not get a clear legal framework. "The government needs to create one urgently," Mr Sklaroff said.

Industry sources suggested that ministers might be dragging their feet on legislation for fear of adding credence to the notion that foundation trusts are in danger of bankruptcy.

A Department of Health spokesperson said: "We are currently looking at how we can develop an insolvency regime for NHS foundation trusts that treats creditors fairly while prioritising the continuity of NHS services.

"We had hoped to have one in place this year, but following discussions with the independent regulator we have decided that it is better to develop a system after we have had the opportunity to take in a the views of a wide range of stakeholders.

"There is absolutely no need to rush insolvency regulations. NHS foundation trusts are well managed and high-performing NHS organisations and there is currently no prospect whatsoever of any of them going insolvent."



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More higher-income households are getting into trouble with personal debt, according to debt advisory companies.

Second quarter figures from the Insolvency Service showed a 4.2 per cent annual rise in the number of individual insolvencies through bankruptcy and individual voluntary arrangements and anecdotal evidence suggests these now include borrowers on middle and higher incomes.

Debtmatters, the debt advice group and IVA provider, said it was seeing the first signs of credit problems in wealthier households. “If you look back two to three years, there is a trend to people on higher incomes – doctors, solicitors,” said James Dean, marketing director.

“Demand has increased dramatically but has been held back by the banks’ recent stance on refusing IVAs. We’ve seen that demand across IVAs, debt management plans and calls to charities. So, yes, there’s been an increase, although we’re not saying there’s been a big swing to middle-income earners.”

However, the swing may become more apparent in the next few months, judging by usage of online debt advice forums, such as IVA.co.uk. Andy Davie, site manager, said: “The live forum where people post questions is getting busier and busier all the time and there are now a few posts from quite high earners. More people are coming on board with higher incomes. They ask a lot of questions about their property – how it is affected by an IVA. These people have got a problem.”

For higher earners, an IVA can be preferable to bankruptcy because it provides greater privacy and more control over property ownership. A typical five-year IVA will require homeowners to release equity from their homes to repay debts, but they retain title.

More middle and high-income homeowners are expected to resort to IVAs in the months ahead, as they have greater difficulties servicing their debts.

“Next year, we’re going see more people in these brackets with debt problems,” predicts James Falla, of debt consultancy Thomas Charles. “The middle- to higher-income brackets have seen property prices rise and they’ve pushed themselves to get there. These guys are now coming to the end of fixed-rate mortgage deals. Now they’ll find they’ll only be able to get 6.5 per cent, so we’ll see a trend towards more higher-income people getting into trouble – the trigger will be property.”

More people are also running into difficulties further down the income scale. Many consumer debt groups are reporting sharp increases in inquiries from concerned borrowers in recent months.

Consumer Credit Counselling Service, the debt charity, saw an 18.5 per cent increase in the number of calls it received in the first half of this year. The group typically deals with lower earners who have overstretched their borrowing.

James Ketchell, of CCCS, said: “More people are coming to us looking for help and they are coming earlier.”

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