Holiday home buyers at risk of losing tens of thousands of pounds after the collapse of Spanish developer Martinsa-Fadesa have been urged to act fast.

An estimated 12,500 families including potentially thousands of Britons are believed to have put down deposits on off-plan property with the developer – in some cases more than £100,000.
A Spanish judge placed Martinsa-Fadesa into administration on Thursday and British buyers have been warned they have just 30 days to stake their claims to get money back.

Many of the British buyers have placed sizeable deposits on properties often costing £200,000-plus, with some reported to have put down deposits of 50% and 60% on properties that may never be completed.

The collapse of the high-profile developer has rocked the already troubled Spanish property market further.

Martinsa-Fadesa has sites on the Costa Blanca and Costa De La Luz, among its more than 30 developments in Spain, Morocco, Portugal and Bulgaria.

Antonio Guillen, a Spanish lawyer working for Leeds-based law firm DWF, in the UK, says buyers should try to ascertain through their lawyer if the developer has a bank guarantee in place to cover their deposit, or any other sums they have already paid towards the price of their property.

Guillen said: 'Anyone who believes they are a creditor of Martinsa-Fadesa – and that includes purchasers of properties off-plan or owners of properties that have not been fully completed - should inform the administrators and the court as soon as possible.

'This has to be done within 30 days of the insolvency arrangement being published through official channels.

'Under the Spanish Insolvency Act all creditors should receive a personal communication from the administrators but this does not always happen.

'It is advisable for anyone affected to contact a lawyer versed in Spanish insolvency law and provide them with proof of payment. The lawyer will ensure that the necessary papers are in place for the purchaser to have their payment recognised by the court and the administrators.

'The lawyer will also ascertain whether the developer has a bank guarantee in place. This document is extremely important as it could make all the difference between buyers losing all their money and getting a refund.'



See Original Article

Call now for help with corporate debt.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

Sir, John Willman sets out arguments for and against the concept of a Chapter 11-style bankruptcy regime for the UK (“Tide of distress will put salvage system to its toughest test”, July 21) and rightly concludes that the current system is likely to be tested to breaking point in the coming months. And while Tom Brown (Letters, “Chapter 11 proposals unlikely to save more companies or jobs”, July 18) seems to be an experienced operator, his opposition to the Conservatives' initiative in this area is evidenced by examples from another era in terms of restructurings and turnrounds.

Capital structures have become very much more complex and the current Enterprise Act does not allow for a venue to conduct a valuation fight. Nor does it provide for a stay or freezing of past debts to allow a company breathing room to prepare a turnround plan or address core issues. It also does not have a mechanism for super-priority new money to come in for rescue financing.

The Enterprise Act works if more than 75 per cent of the creditors agree and do a scheme or pre-packaged restructuring.

But with the growth in complex financial instruments, more companies will fail and more jobs will be lost than in the prior wave of restructurings. Having been involved across Europe during the past downturn (in both in-court and out-of-court rescues), I have to say that whatever your politics, British and indeed European lawmakers need to move faster if they are genuinely to support the growth opportunities of their entrepreneurs in the increasingly competitive reality of global business.

The UK has become a financial centre of excellence that has greatly contributed to both the UK economy and Europe generally. But if its insolvency regime proves ineffective in the next downturn, which is obviously looming, then it will deter investors who seek greater predictability.



See Original Article

If you have problems with corporate debts then call us now for help.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

Almost eight times as many companies are having critical problems that could lead to insolvency than at this point last year, according to a report published today.

The report from the business restructuring specialist Begbies Traynor is a further sign of the sharply worsening economic climate.

It says that during the second quarter of the year, 4,258 companies faced "critical" problems, defined by the firm as businesses with county court judgments of more than £5,000 against them or winding-up petitions. That compared with just 542 in the second quarter of 2007.

From historical data, Begbies predicts about 15% of companies with critical problems will be insolvent within a year.

Ric Traynor, Begbies Traynor chairman, said figures for the first quarter of the year showed the credit crunch was beginning to have a material impact on businesses in Britain. "With credit conditions still tightening, these new figures demonstrate that the effects are certainly getting worse and we would anticipate that they will continue to do so, certainly until the end of this year at least," he said.

The company said creditors, under pressure themselves, were far less patient, not least Revenue and Customs.

The pain is being felt across the economy but the industry suffering the most is construction, which has 639 companies facing critical problems according to Begbies, up from 136 a year ago, as the credit crunch torpedoes the property market. In the past few weeks, the industry has announced thousands of job cuts.

Retailers are also suffering. According to the report, 200 are facing critical problems compared with 46 a year earlier, reflecting falling consumer confidence.

IT has seen the sharpest percentage rise in companies facing difficult conditions: 113 in the second quarter of this year, up from 24 last year - a 371% increase.

"In times of economic slowdown, you would expect the construction and retail sectors to suffer, and that is certainly borne out by our research," said Traynor. "However, many other industry sectors are being affected by the current conditions. Credit lines have dried up and companies which might have been supported by extended credit up to a year ago are now at real risk."



See Original Article

If you need help with corporate debts then call now.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

The number of construction companies facing “critical problems” between the 2007 and 2008 has increased almost fourfold, according to Begbies Traynor's Red Flag Alert statistics.

Data from the business rescue, recovery and restructuring specialist today reveals that in the second quarter of this year there was a 370 per cent increase in construction companies reporting severe difficulties over the same period last year.

There was also a 13 per cent increase in construction firm reporting similar difficulties between the first and second quarter (Q) of the year.

Begbies Traynor defines a critical problem as a county court judgement in excess of £5,000 or any winding-up petition-related action.

Based on previous research, approximately 15 per cent of the companies experiencing the most difficult of circumstances, categorised by Red Flag as those with ‘Critical Problems’, will enter into a formal insolvency procedure within 12 months.

Begbies data also revealed that the number of UK companies experiencing “critical problems” in the second quarter of 2008 increased substantially over the same period last year.

Overall, 4,258 companies faced critical problems, such as county court judgements in excess of £5,000 or winding-up petition related actions, in the first quarter (Q) of 2008 compared with 542 as in the same period last year.

The research also showed conditions getting more difficult as the year progresses, with an increase in the number of companies facing critical problems of nearly 30 per cent in Q2 2008 compared to Q1 2008.

The Q2 2008 statistics show substantial year on year increases in critical problems across all sectors, but construction and IT (up 371 per cent) showed the largest percentage increases followed by retail (up 335 per cent).

On the positive side, the statistics show a fall in the rate of growth of appointments within the manufacturing, automotive and wholesale sectors in Q2 2008 compared to Q2 2007.

Additional analysis of the trends in the first half of the year show financial services (Q2 up 36 per cent on Q1) and property services (up 20 per cent) as also suffering. Pressure did ease slightly in Q2 2008 in certain sectors, including engineering and automotive industries which, although the overall numbers were higher, the rate of increase had slowed in actions received over the first quarter of the year.

Ric Traynor, executive chairman of the Begbies Traynor Group, said: “In times of economic slowdown, you would expect the construction and retail sectors to suffer – and that is certainly borne out by our research. However, the statistics also show that many other industry sectors are being affected by the current conditions, and the gloom is certainly not restricted to those areas.

“Credit lines have dried up and companies which might have been supported by extended credit up to a year ago are now at real risk.”


See Original Article

Need help with corporate debt? Call us now.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

SemGroup, the US physical oil trader, on Tuesday filed for bankruptcy as it acknowledged trading losses of more than $3.2bn in different energy markets after betting this year that crude oil prices would fall. Its collapse came as oil prices plunged to their lowest levels since early June. West Texas Intermediate crude oil fell to an intraday low of $125.63 a barrel, down $5 on the day.

Traders sold oil futures as news emerged that tropical storm Dolly was set to miss oil and natural gas installations in the US Gulf of Mexico.

Oil traders said SemGroup could have exacerbated the spike in oil prices this month, when the market experienced unprecedented swings of more than $10 a barrel, as the company was buying back some previous bets on lower prices.

The bankruptcy of SemGroup, which describes itself as the fourteenth largest US private held company, affects approximately $3.1bn of debt, according to court filings. Oil company BP is the largest creditor, with almost $160m.

SemGroup bet in the futures market that oil prices would fall as a way to hedge its positions in the physical market. But as prices jumped this month to a record of $147.27 a barrel from less than $100 a barrel at the beginning of the year, the mounting losses triggered large margin calls from banks – a request to put up more collateral – draining the company’s cash reserves.

The company said in a court filing that it had lost $2.4bn in oil hedges at the New York Mercantile Exchange and another $850m in over-the-counter energy markets. The credit crunch has exacerbated energy traders’ battle with margin calls as banks are reluctant to extend their credit lines.

Terry Ronan, SemGroup’s acting chief executive, said: “We are taking aggressive steps to address our financial challenge.” Mr Roman said the company would sell now assets.

“We believe there will be significant interest in our assets,” he said. David Kirsch, of PFC Energy, the consultancy, said that SemGroup was “a casualty” of the run-up in prices in the first half of the year.

With the dramatic change in market direction, Mr Kirsch said more bankruptcies were likely, which underlined that for every trade there was a counter-party.

That is particularly important to remember when people are talking about “speculators as the evil force’’ in the run-up in oil prices, he said.

SemGroup’s publicly traded subsidiary, SemGroup Energy Partners, which is not part of the bankruptcy, on Tuesday rose 10.9 per cent on Nasdaq as it said it would be able to carry on its business. It had lost more than 70 per cent in the three previous trading days.



See Original Article

Call now for help with corporate debt.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

The company responsible for the annual Healthcare Computing exhibition in Harrogate has gone into liquidation, ending an event that has run for a quarter of a century.

BJHC Ltd has run the Healthcare Computing exhibition for the past 25 years alongside the Healthcare Computing conference organised by the British Computer Society’s (BCS) Health Informatics Forum.

The move into voluntary liquidation follows BJHC making all of its staff redundant in June.

Since the inception of the NHS National Programme for IT in 2002 the exhibition has been in steady decline, after an initial boost as suppliers competed for NPfIT contracts. In its prime the exhibition could fill five halls of the Harrogate International Conference Centre, this year it barely managed two.

Despite the demise of BJHC, the BCS has pledged to run a version of the event in 2009. Dr Glyn Hayes, former president of the BCS Health Informatics Forum, told E-Health Insider. “There will be an event called HC 2009 taking place April 21-24, that will be held in Harrogate.”

He added that the plan was to run the event in a different format, without a parallel conference and free exhibition. “It will be a single event, with no free exhibition, but instead a mixture of demonstrations, showcases and more widespread networking.”

When BJHC Ltd appointed liquidators on 4 July, the company owed creditors almost half a million pounds. The largest of the creditors were BJHC directors Nettie De Glanville and Dr Hugh De Glanville, who are owed a total of £261,581.

In a ‘company history’ provided as part of the liquidation papers to creditors Mrs De Glanville attributed the company’s decline and downfall to the introduction of NHS National Programme for IT:

“BJHC’s main revenue stream – sales of exhibition and advertising spaces – depends on competition between the suppliers of healthcare-ICT products and services. England’s National Programme for IT in the NHS, started in 2003/04, however, introduced and attempted to enforce centralised procurement of healthcare ICT, which resulted in a severe curtailment of the open marketplace and, thereby, a downturn in BJHC’s revenues.”

The commentary says that as result by April 2007 BJHC’s “not insubstantial reserves” were almost “depleted”, forcing corrective action to be taken even as the market was beginning to open up again.

“As the NPfIT blight had begun to lift, the shareholders/directors downsized the business and arranged a loan to the company of £250,000.” But by the end of April 2008 it was “seen that the company would need a further loan or cease trading”, the directors chose the latter.

The company was placed into receivership despite having significant cash reserves of £169,000 and reported intangible assets of £300,000. Employee claims by former BJHC staff total £72,705.



See Original Article

If you are worried about debts in your company then call now for help.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

The number of companies going into administration has risen 16 per cent so far this year as British businesses succumb to the effects of the credit crunch, and the picture is expected to worsen, according to analysis by Deloitte.

Property and construction-related businesses experienced the most administrations – a 54 per cent rise in the first half of 2008 compared with the same period last year – as the value of land stocks fell, along with house prices and mortgage approvals.


See Original Article

Call now if your company is struggling with debts.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

The initial cause of the credit crunch was the collapse of the US sub-prime market and its knock-on effect has brought an end to cheap and available credit in the UK and raised the spectre of recession.

The decade-long consumer boom is over and the UK is left with a personal debt mountain of over £1.39trn, with individuals owing an average of £33,000.
A squeeze on credit has hit individuals and companies and the residential property market has slowed to a 30-year low. Allied to these problems are inflationary pressures on fuel, utilities and commodities.

The downturn will come as a shock to many after a decade of continuous growth but those with longer memories will recall how cycles of economic growth have inevitably led to recession. Businesses must adapt to changing conditions.

Business directors are subject to a barrage of obligations. Within this legally complex world of increasing regulation and scrutiny, a director must tread a careful path. Failure to fulfil duties can lead to civil and even criminal sanction, personal liability and disqualification as a director.

Case law has developed to the extent that directors cannot defend their actions on the basis that they held a genuine belief that the prosperity of the company could be restored by trading through difficulties.

A more objective standard is applied and directors will be punished if they have not acted with proper regard for the interest of creditors.

A director's overriding duty can be distilled as the basic responsibility to act in good faith in a way likely to promote the success of the company for the benefit of its members. However, if insolvency of the company arises or becomes a possibility, the directors must have primary regard to the interest of creditors.

It is a difficult balance. The Insolvency Act 1986 imposes a duty on directors to take every step expected to be taken to minimise any loss to creditors from the moment a company cannot avoid insolvent liquidation. This does not necessarily mean that a director should cease trading as soon as a company becomes insolvent. Such a step may have disastrous consequences, causing additional loss to the creditors. For example, it may increase employee claims, destroy the goodwill of the business, leave client positions exposed and incur additional liabilities.

The directors should give careful thought to actions which may turn round the business, head off cashflow difficulties and return it to profitability. Steps to be considered may include:


Disposing of surplus assets.

Changing working methods or practices to increase efficiency.

Eliminating unprofitable products or service lines.

Introducing additional equity or loan capital.

Seeking to reach informal agreements with creditors.

Seeking a sale or merger with third parties which have the resources to assist. It is increasingly common to pursue an accelerated merger and acquisition strategy before formal insolvency proceedings.
Finally, the management should consider whether the structure and personnel of the existing board are best placed to bring a turn-round of the business.

Turning round a business requires a significant amount of time and effort. Perhaps new blood is needed. Those who have built the business and led it in a certain way might not be best placed to effect a change. Different skills sets are required.

In continuing to trade and trying to turn round a business, directors need to have regard to the proceedings that could be taken against them in circumstances where the company eventually enters into an insolvency process. Steps that should be taken to avoid potential personal liability may include:


Undertaking a full and frank evaluation with fellow directors, questioning whether the business remains viable and documenting the conclusions.

Identifying steps to be taken to turn round the fortunes of the business and drafting a business rescue plan which is agreed by all.

Evidence that a rescue plan has been implemented and followed while remaining flexible and being prepared to adapt it in light of changing circumstances.

Ensuring that accounts are kept orderly and up to date.

Ensuring the board meets regularly and receives full information on the state of the company's trading. If it appears to be facing insolvency, the regularity of such meetings must be increased significantly.

Ensuring that creditors are regularly informed - and certainly not misled - regarding the company's situation. If possible, enlisting the support of key creditors in the continued operation of the company.

Keeping careful records and minutes of any decisions taken and remedial action to be pursued.

Obtaining advice from specialist legal and accountancy professionals. Guidance from the Department for Business, Enterprise & Regulatory Reform accompanying the new Companies Act instructs directors to get advice from an insolvency professional when in financial difficulty.
Directors must be aware of the personal liabilities that can arise and the steps that can be taken to safeguard a company, its creditors and themselves. A three-step process should be taken:

1: Stop

Think about whether your business is strong enough to withstand a recessionary period.

2: LOOK

Review all areas of your business. Are there steps that can be taken to improve its financial strength and avoid insolvency?

3: listen

If the company is potentially heading into insolvency, seek out the advice of professionals.


See Original Article

Corporate debts spiralling out of control? Call now for help.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

So now we know: the Government gave the public a "wholly misleading picture" of the safety of their savings. That is the assessment of the Parliamentary Ombudsman after an exhaustive inquiry into Equitable Life's collapse.

Well, blow me down. Who would have believed it? Ministers, best known for squandering public resources, have discovered a commodity with which they prefer to be economical - the truth. Shocking! How long before an official investigation concludes something very similar about Northern Rock, for which Alistair Darling approved a £25 billion state loan and other guarantees worth at least as much again? When the Newcastle-based bank, crippled by a flawed strategy, began sucking in public money last autumn, the Chancellor's message was unambiguous: taxpayers' money is safe. In November, he insisted that the Rock's debt was underpinned by "quality assets", including mortgages.

Given that the cash was being absorbed by a dysfunctional business, his confidence about the likelihood of full repayment seemed strangely at odds with reality. What's more, the housing market had already cracked and the value of the Rock's collateral was starting to slip away.

Not surprisingly, Mr Darling's reassurances and those of his puppet master next door have since morphed, in the style of Animal Farm, into something less certain (some subsidies, it seems, are more equal than others). Even so, as recently as February, when the Government decided to nationalise the Rock, the Chancellor was still looking on the bright side. "When market conditions improve, the value of Northern Rock will grow and therefore the taxpayer will gain," he said. Gain? Wow, there was I thinking that Mr Darling had been driven by political expediency - a desperation to shore up votes in Labour's north-east heartland - but all along he had a cunning plan to outwit professionals and make a profit.

Ah, if only the Grey Fox had been running the Treasury when Equitable Life went under. Who knows, instead of having had their pensions slashed, the members might now be lighting cigars with £10 notes. Or maybe not.

An important difference between Equitable and the Rock is that, whereas the mutual insurer's customers were invited to contribute, taxpayers were compelled to hand over a sum not far short of Britain's annual defence budget to an ex-building society that had become too big for its boots. As Westminster's resident comedian, Vince Cable, pointed out: "This Prime Minister and his Chancellor have invested the equivalent of 30 Millennium Domes in this bank and we don't even have a pop concert to show for it."

The Chancellor's case was that he had acted to protect taxpayers' money and save the banking system from ruin. It sounded noble enough, but didn't bear scrutiny. First, when has taxpayers' money ever been safe with Government? Second, the world would not have ended had the Rock tumbled into administration like any other poorly managed company.

Willem Buiter, a professor at the LSE and a former member of the Bank of England's Monetary Policy Committee, said Northern Rock had no systemic significance: "Its insolvency would not threaten financial stability… Indeed in the longer run, the insolvency of Northern Rock would no doubt enhance the financial stability of the UK banking sector, because it would represent a stark warning against reckless funding."

On the day Gordon Brown moved into Number 10, he promised us a new style of government. And, to be fair, he has delivered something different: an origami administration. Everything it touches folds like rice paper.

The 2p increase in fuel duty, the abolition of the 10p income tax band, the reform of capital gains tax and plans to levy a charge on wealthy foreigners have crumpled in the hands of a Chancellor whose capacity for U-turns suggests he might be better employed as a BSM instructor. Only a brave man, or a fool, would bet against a future Darling embarrassment being a volte-face over the amount taxpayers will claw back from Northern Rock. Had the cash been ploughed into any other leading British bank, hefty writedowns would certainly be required.

HBOS is facing the humiliation of its £4 billion share issue being left with underwriters, because existing investors don't want to add to their holdings. Barclays has lost 60 per cent of its stockmarket value, Royal Bank of Scotland 75 per cent. Bradford & Bingley has passed round the hat for emergency funds, while Alliance & Leicester is fainting into the arms of a Spanish suitor.

Northern Rock's main business was mortgages. It chased market share with aggressive offers that, even in the gold rush of 2006-07, looked ridiculously imprudent. Not until February this year did the bank finally withdraw its "supersize" home loan, 125 per cent of a property's sale price.

Widening faults in the housing market are creating deep holes in many homeowners' finances. The Halifax index is down by 10 per cent since last August, and the trade in property derivatives is signalling that prices have much further to fall, perhaps by up to 20 per cent. Such an outcome would be far more severe than when the roof fell in during the recession of the early 1990s. Worse still, unemployment is rising sharply, with the inevitable effect that some unfortunates will fail to meet their mortgage obligations. Capital Economics, a forecasting group, predicts that the jobless total will reach 2.5 million by the end of 2010, an increase of 900,000. If that were even half right, we should expect a surge in arrears, defaults, repossessions and what the banks call "impairments", ie, irrecoverable loans.

Regular readers will know that this is not a conclusion that I have reached just recently. In May 2003, I wrote in our sister paper, The Sunday Telegraph: "A new study from the Citizens Advice Bureau reveals the extent to which Britain's credit boom threatens to explode in the Government's face… A significant portion [of the 8,000 surveyed] had borrowings that were 'totally unmanageable in proportion to their income'. This problem isn't going to go away, and when interest rates start to rise (they always do at some stage), the social and economic impact will be devastating."

It remains a mystery why, when the CAB was flagging up a crisis, so few at the top of banking and almost nobody in government took notice. There was a conspiracy of silence, for which millions of decent taxpayers, who never lived beyond their means, will have to foot the bill. We will learn more next month, when Northern Rock unveils interim results and an update on the deterioration of its mortgage book.

Whatever the true position, Mr Darling will doubtless try to play down the risk to our £25 billion. As Equitable Life's victims learnt the hard way, when it comes to painting misleading pictures, this Government is an Old Master.



See Original Article

Call now for help with corporate debts.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

THE financial crisis facing Aberdeen City Council deepened last night as calls intensified for its leaders to quit following revelations that the authority was facing £50 million in budget cuts – almost double the previous estimates.

A confidential report, leaked in advance of tomorrow's meeting of the council's urgent business committee, has disclosed that the savings which must be made in the current financial year total £49.7 million – the equivalent of 15 per cent of th e authority's annual budget.

The report claims that only £10.2 million of savings are guaranteed to be delivered, with uncertainty surrounding £26.8 million and the remaining £12.7 million regarded as unachievable.

And it reveals the measures being considered to help balance the books include a freeze on recruitment, the transfer of funds from other accounts, a moratorium on capital projects and bringing in officials from North Lanarkshire Council to review the social work budget.

Opposition councillors claimed the council was now facing bankruptcy and called on Kate Dean, the Liberal Democrat leader of the authority, and Kevin Stewart, the SNP deputy leader, to resign, claiming their positions were untenable.

Willie Young, secretary of the council's Labour group, said: "They told us the savings would be £27 million but it is now £49.7 million because they didn't add in more than £20 million in other savings. Why were we not told this before?

"What other council in Scotland has ever been faced with problems like this? And it is down to the administration's mismanagement. It is time Kate Dean and Kevin Stewart went. Their positions have become untenable."

He added: "We could be facing bankruptcy and our big fear is that if Councillor Dean doesn't vacate the leader's chair, auditors are going to be forced to come in and run this council."

Frank Doran the Labour MP for Aberdeen North, claimed: "The extraordinary revelation is one more shock in a year which has seen a catalogue of disclosures which embarrass the city and show a level of incompetence and ineptitude in the present administration."

Anne Begg, the Labour MP for Aberdeen South, added: "This new figure represents swingeing cuts and will seriously affect frontline services."

Tommy Campbell, the regional organiser of the T&G Unite union, said: "It's disgraceful. It's pure financial madness."

A spokesman for the city council insisted there was "nothing new" in the figures contained in the committee report.

He said: "Aberdeen City Council has always been entirely transparent about the savings. The total level of savings needed was included in the reports to the February budget meeting and in the budget booklet published subsequently.

He added: "The city council is working to meet the challenge of delivering these budget savings, with help from chief executives, finance directors and senior councillors from other local authorities."


See Original Article

Call now for help with corporate debts.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

If Britain had wanted to adopt America’s Chapter 11 insolvency regime it would have incorporated it in the Enterprise Act of 2002. Instead, when the bankruptcy process was changed we took the best parts of the US system and rejected the rest.


Now that we are heading towards a recession that will increase insolvencies the regime will be tested but that does not mean the Conservative party is right in calling for Chapter 11 to be imported to Britain.

The long-standing US law allows insolvent companies to bring in new capital that old creditors cannot touch. But it leaves the old management – whether incompetent or crooked – in charge and free to burn through the new money as quickly as it wasted the old.

Perhaps if new financiers are daft enough to lend to proven losers they should be allowed to, but the old creditors deserve to be protected.

Chapter 11 allows companies to rip up agreements such as employment contracts and leases and to walk away from pension liabilities. Employers can cut wages with little protection for workers.

In practice all big decisions have to be approved by special bankruptcy courts, but the process is slow and expensive. Shareholders – who have probably lost everything anyway – must give consent but old creditors have no say even though it is their money that is being diluted. Rather than giving troubled companies a breathing space it allows them to suffocate slowly.

The UK administration process allows many of those benefits but imposes external managers who can make a business efficient and viable, thus retaining jobs and providing a payment for creditors.

With British business sliding into economic slowdown there is no choice but to use the existing insolvency processes. Perhaps after that there can be a new change but we should not assume that a Chapter 11 law would be better. It will take until the recession after this to test that new regime however.


See Original Article

If your business has debts then call now for assistance.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

CBI president Sir Martin Broughton must have been less them impressed yesterday when Tory leader David Cameron used a CBI platform to sing the praises of Chapter 11, the US system under which insolvent companies are protected from their creditors and given time to restructure themselves.

Broughton's day job is chairman of British Airways and, as he and his predecessors have said for years, one of the reasons global aviation is so consistently financially chaotic is that US carriers are never allowed to go bust. Delta, United, Continental, US Airways - almost all of them with the exception of American - have gone into Chapter 11, often more than once, shed their debts and carried on flying.
Not only does this encourage irresponsibility in overgearing, overexpansion and general lack of prudence, it also creates permanent overcapacity and is grossly unfair on competitors such as British Airways, which have to operate within the constraints of running the business properly.

Closer to home, one of the concerns highlighted by the occupational pensions crisis is the unfair advantage given to companies that use the insolvency laws to shed their pension obligations, and re-emerge as much more dynamic and financially sound competitors able to wipe the floor with rival companies which continue to support their pension schemes.

Chapter 11 embodies the same principle of incentivising irresponsibility to the detriment of firms that run their businesses properly - a strange principle for a Tory leader to promote, and one which suggests he and Shadow Chancellor George Osborne are not yet as financially and economically sophisticated as they would have us believe.

Cameron is not much of a historian either. In 1986, under a Conservative Government, the UK insolvency acts were completely redrawn with the aim of getting the best of the US system without its drawbacks.

This led to the concept of administration - a step short of bankruptcy - and the appointment of an administrator, whose brief is very much to keep the viable parts of the business going and find a secure new home for them, rather than simply shut down everything to raise money for creditors. That, in fact, is precisely the feature Cameron admires about Chapter 11.

It is interesting, too, who is backing him on this. Prominent among them are the hedge funds and others who specialise in trading distressed debt, and who would welcome the opportunity for every corporate restructuring and insolvency to degenerate into a lawyer-fest because it gives them the platform to exert maximum leverage in what is inevitably a grey area of rights and obligations. One wonders how much they really share Cameron's professed interest in preserving jobs.

There is, however, something the Tory leader could do if he wants to cut down on the number of bankruptcies and give business more time to solve its problem. It is, generally speaking, not the banks that drive companies to the wall, or their customers and trade creditors.

Rather, it is Her Majesty's Revenue & Customs, which bankrupts businesses to get its hands on unpaid tax, accounting for by far the largest number of insolvencies. If Cameron really wants to reduce the number, perhaps he should drop the taxman down to the bottom of the list of preferred creditors rather than having him at the top.

See Original Article

Call now if need help with the debts in your company.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

The peculiar structure and dynamics of hedge funds ­create unique complexities for those responsible for their management when they enter the twilight zone of insolvency.

Those who mismanage funds incorporated in the Cayman Islands can expect legal repercussions. Cayman law does not proscribe fraudulent or wrongful trading, but there is a provision for liquidators to bring misfeasance proceedings against delinquent directors guilty of breaches of fiduciary duty, without the statutory defence provided by Section 727 of the UK’s Companies Act, whereby a court may excuse a director who has acted honestly and reasonably.

Cayman procedural rules also specifically allow the courts to exercise extraterritorial jurisdiction over non-resident directors of Cayman-registered funds. Against that ­background, this article seeks to assist those charged with managing a troubled fund through its final days.

Suspension of redemptions One of the first steps taken by a fund facing a serious and possibly terminal liquidity crisis is to suspend subscriptions and redemptions, effectively ceasing to trade. A review of the fund’s offering documents and articles should identify the threshold test for this action. Unfortunately, experience has shown that different language is used for different funds in the structure (not only onshore and ­offshore feeders, but possibly also between an offshore feeder limited company and a ­master fund limited partnership).

Investors who have been trying to redeem may challenge whether the test has been met. The investment manager’s ­recommendation that a fund take this step must therefore be adequately documented, along with the directors’ assessment that the test has indeed been met (with the benefit of legal advice where necessary).

Best practice dictates that the Cayman Islands Monetary Authority should be informed of a suspension (if a fund is ­regulated), as should the fund’s auditor. The suspension is likely to raise a going concern issue, which needs to be determined one way or another to the auditor’s satisfaction, and may require the last audit report to be revisited or supplemented.


Liquidation

Assuming that a suspension of redemptions does not achieve the desired objective and there are no prospects of resuming ­business, the directors must then consider liquidation options. These are generally (i) an informal winding down process managed by the investment manager, who requires ­constitutional change to alter the fund’s investment objectives and/or compulsory redemption of all investors; (ii) a ­shareholders’ voluntary liquidation, which may or may not involve court supervision of the liquidators; or (iii) a court petition for a compulsory winding up. The independent directors should instruct separate counsel in relation to this.

Consideration must be given to the ­relative merits of appointing a liquidator in a formal winding up, or a workout/ restructuring specialist for an informal winding down of the fund, as against this being undertaken by existing management. The latter may appear cheaper, but could also be inappropriate – any controversy ­surrounding the collapse of a fund will invariably require a professional insolvency practitioner to be appointed with court-sanctioned powers who can carry out an independent investigation into the causes of, and those responsible for, the insolvency.

Insolvency practitioners are used to ­managing the conflicts inherent in a ­master/feeder fund structure. However, ­separate liquidators are sometimes required, depending on the nature of the insolvency and its causes, and depending also on the stakeholders’ wishes.

Before any action is taken, the directors must determine who holds the fund’s voting shares – for example, the investors ­themselves, the manager or an affiliate, or even the trustee of an ‘orphan’ charitable trust. The directors should consider polling or otherwise informing investors whose shares are non-voting before they take action using their effective control of a fund’s voting shares. The presentation of any ­decision or recommendation by the board may be ­critical to its success – this is an objective for independent directors, since their views should not be tainted by self-interest.


Cross-border issues

The nature of hedge funds is such that a simultaneous ancillary liquidation process may well have to be initiated in other ­countries to safeguard assets held by ­custodians or prime brokers – New York, London, Geneva or Singapore, for example. This requires coordination of legal advice and court filings in these jurisdictions. As recent hedge fund cases in the New York Bankruptcy Court have shown, there may be difficulties in trying to make use of Chapter 15 of the US Bankruptcy Code, although other jurisdictions that have adopted the United Nations Commission on ­International Trade Law (Uncitral) model law on cross-border insolvency in whole or in part have taken a more liberal approach.

The board should consider taking pre-emptive steps, whether to improve the prospects of a liquidator obtaining recognition and assistance in other jurisdictions, or to minimise the challenges they will otherwise face in the absence of such recognition. It may therefore be advisable to transfer fund assets back to Cayman before initiating the liquidation process. This requires care – the duty of directors to act in the best interests of shareholders becomes subject to an ­overriding duty to have regard to the interests of the general creditors of a fund that is descending into insolvency. Some creditors may challenge such a transfer of funds if they feel it was done to frustrate their claims.


The endgame

Once a fund is in liquidation, the investment manager and directors will have to cooperate with the liquidators, who have extensive powers to summon and examine the former management. Recognising that they are likely to be the first targets in litigation to recover or compensate for ­losses sustained by the fund, they should check their indemnities and any insurance cover, take separate legal advice and prepare ­themselves for claims.



See Original Article

Call now if you need help with any debts in your business.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

As the country slips into recession, business failures are mounting.

Buoyed by surging economic growth and supportive banks, the number of Irish business failures has consistently fallen over the past five years. Various sectors have suffered at different times, but the overall economic and business climate has remained strong - until now.

The most recent figures paint a far more depressing picture, with a 76 per cent increase in the number of companies that collapsed in the first half of this year, as the economy slips into recession and Irish companies feel the pinch.

The corporate recovery and insolvency department of accountancy firm Farrell Grant Sparks (FGS)maintains a running total on the number of Irish companies going out of business. FGS said that 312 companies collapsed in Ireland in the first six months of the year, up from 177 for the same period last year.

If the trend continues, the annual total could top the 600 mark for the first time in living memory.

The FGS figures cover all companies that have gone into liquidation, examinership or receivership, and offer the first significant snapshot of how Irish businesses are performing this year.

The figures also show the increased readiness of the banks to call in loans and seize assets. In the first half of 2008, Irish financial institutions appointed receivers over the assets of 23 companies, up from just five in the same period in 2007.

In the past, most banks would prefer an informal scheme of arrangement, rather than put in a receiver. In recent days, however, Bank of Ireland installed a receiver for the first time in almost a decade.

Many of the receiverships have been in the property sector, with banks moving to secure loans advanced for large-scale property deals.

Given the current housing climate, it is not surprising that the largest number of corporate failures were in the construction and engineering sector, with some 130 companies going out of business. This sector accounts for 42 per cent of all failures in Ireland this year, according to the FGS data.

All over the country, construction companies and subcontractors are appointing liquidators on an almost daily basis. More construction firms have gone under in the last six months than in the whole of last year.

But it’s not just construction suffering. The FGS figures show that there has been an increase in the number of failures across all areas of the economy, with the hospitality sector hit particularly hard. A total of 42 bars, restaurants and hotels went bust in the first half of the year, compared with 22 for the same period last year.

In recent weeks, for example, a examiner was appointed to Dunne Group Hotels, one of the country’s largest hotel chains, while Bank of Ireland appointed a receiver to Redcorn Development, the company that developed the Watermarque Boutique Hotel and Spa in Caherciveen, Co Kerry.

The Irish technology sector, which has rallied in recent years, recorded its highest number of failures since the dotcom crash. Fourteen technology companies went out of business during the first half, up from six and nine during the previous two years.

An analysis of the FGS data reveals increases in business failures in the security sector, healthcare and leisure, and the motor industry.

Companies operating in the interior design and home furnishings sector have also noted a surge in liquidations and examinerships. The retail sector was an exception to the trend, with a drop in the number of company failures to 26, from 32 the previous year.

Almost half of the companies that went bust were based in Dublin, while Cork, Wicklow and Galway also registered high numbers of insolvencies. Roscommon was the only county in Ireland not to record a corporate casualty in the first half of the year.

A number of the companies to go bust this year have been high profile and have left behind large debts. Iqon Technologies, the award-winning Co Louth computer manufacturer, left debts of more than €11.8 million after going into liquidation; while AgCert, the Dublin carbon credits firm, sought bankruptcy protection after amassing a financial deficit of €90 million.

With the economy predicted to go into recession in the latter half of this year, experts are predicting that the trends will continue throughout 2008.


See Original Article

Call now if you need help with corporate debts.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

LONDON, July 14 (Reuters) - The cost of insuring the debt of British airport operator BAA against default fell sharply on Monday after the company announced a key step in its long-awaited refinancing plans.

BAA, bought by Spain's Ferrovial (FER.MC: Quote, Profile, Research) in 2006, said on Monday it had made significant progress on a plan to refinance its debt and would ask investors to vote on a bond exchange [ID:nL14718658].

Five-year credit default swaps on BAA tightened around 70 basis points versus late on Friday to 200 basis points, traders said.

The bid-offer spread was wide, at 175 to 225 basis points, one of the traders said, which reflects uncertainty about how the plans will impact BAA's CDS.



See Original Article

Call now for help if you have corporate debts.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

Thousands of people could be running up arrears with their energy suppliers because direct debits are set up only to cover predicted bills rather than the final amount.

Up to a third of all bills could be wrong because they are not based on accurate meter readings but an estimate of what consumers will use, according to gas and electricity watchdog Energywatch.

When the properly calculated bill is then issued it is, in many cases higher, than what was first suggested.

The Citizen's Advice Bureau (CAB) said it had received a flood of inquiries from people who realised they had racked up debts because of the system.

Some customers have discovered they owe up to £1,000.

It will come as bad news to many families already tightening their belts because of the credit crunch and rise in food prices, which has already increased monthly bills.

CAB spokesman Tony Herbert said: “Families can rack up huge fuel bills without even realising it because the amount they’re paying is actually based on estimated readings.

“They might have a direct debit set up; they might think they’re paying their bills, but because they’re paying on estimated readings it may not reflect how much they’re actually using.”

Adam Scorer from Energywatch said consumers were struggling because the bills were not collated using "real consumption" data.

“You can just imagine the problems that will come out from the fact that a third of bills in Britain are by and large wrong," he said.

But the Energy Retail Association, which represents the major energy suppliers in the UK, said the majority of the 200 million bills sent out annually were correct.



See Original Article

Need help with corporate debts? Call us now for help.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

So far we have escaped a US-style sub-prime meltdown. We may never see anything so bad, but it's going to be a close call. House prices are falling at a faster rate than the late 1980s-early 1990s slump. House prices generally relate to highly-geared assets (mortgages on homes). As prices fall at rates not seen since the 1930s, equity is vanishing with a rising tide of negative equity the result.

As long as people stay employed and can carry on servicing their debt, they can sit tight and wait for prices to recover to restore their equity. But with more people losing their jobs and the cost of servicing the huge debt pile already taken out, such as credit cards and other unsecured credit, mortgage arrears and repossessions will rise.

Optimists point out that although repossessions have started to rise, they're still way below the levels endured at the height of the last recession. But that's because we're still only at the beginning of this recession.

Over the next 18 months banks are going to face a rising tide of bad debts, arrears and repossessions. The worst hit will be those lenders who have focused on high loan-to-value lending, the buy-to-let market and the self-certification mortgage market where borrowers became their own credit controllers. Another source of worse-than-usual bad debts will come from the large loan books that some high street lenders bought from specialist rivals in a bid to bulk up in the boom.

All of this brings me back to Bradford & Bingley. Assuming it succeeds in raising its £400m capital injection from shareholders it will be, in the happy words of its executive chairman Rod Kent, one of the best capitalised banks in Britain. Phew, because it's going to need to be. Given the profile of its lending (buy-to-let, specialist loan books and so on) it could be one of the worst hit for arrears and further losses and write downs on bad debts. It's going to need the capital it's raising now, not to give it a chance of weathering the onslaught to come, but to give it breathing space until a takeover can be agreed or a run off of its business arranged.

The only engineers you need in the house building trade these days are financial ones. Barratt Developments has sold 43pc less houses in the past six months than the corresponding period in 2007 but is still geared up with debt and a workforce designed for the boom.

Mark Clare, Barratt's chief executive who was finance director of Centrica, has been busy with his financial tool box trying to reinforce the company's financial foundations in the hope that it will be left standing come any recovery. The subsidence showing up on Barratt's balance sheet has been spreading alarmingly and, without yesterday's urgent action, the company's future would have been questionable. It's managed to survive without raising fresh capital but shareholders should put the champagne on hold.

On the debt, it has agreed a refinancing package which gives it breathing space. But this comes at the cost of its interest burden soaring by a third. Paying down this debt now becomes a priority so it must convert shareholders' assets for cash and then pass the cash to the banks. For the foreseeable future, Barratt is working for its banks, not shareholders.

The company's Wilson Bowden Developments will be sold and more cash will be freed up by sacking 1,200 staff. It's also going to stop buying land (which for a house builder isn't great) to conserve cash. But more radical action will be needed.

Its portfolio of starter homes could probably be sold off in bulk to a large buy-to-let specialist because first time buyers can't get mortgages any more so this part of Barratt's market is dead anyway. But this is not a seller's market and shareholders are witnessing a fire sale of their assets to keep the banks happy.

However, all this comes at the start of a possibly prolonged downturn. The shares' 15pc rally yesterday seems a rather premature form of house party.
Bankers want more help from Bank of England
It didn't take the banking sector long to return to the Bank of England asking for an even more special Liquidity Scheme. With the ink barely dry on the initial scheme designed to inject £50bn into the credit market, banks now want the rules loosened so it's easier to borrow from the Bank's scheme.

Some banks that have been downgraded by the rating agencies, or who are at risk of a downgrade, may be finding it particularly hard to parcel up loans into the sort of triple-A rated bonds that the Bank wants in exchange for providing cash. Some want to be able to use new mortgages written this year as security, rather than just last year's vintage or before.

The Bank's scheme cannot yet be counted a success because inter-bank rates remain high, although this is for a number of reasons. But neither can it be counted a failure. The mortgage market is under pressure but that should not be an excuse to help banks back towards the profligacy that's got the economy in such trouble. Those who have over-lent must learn their lessons, just as those who have over-borrowed.



See Original Article

If your business has debts then call us now.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

MANCHESTER car dealership Horners Motor Group is on the brink of insolvency, it emerged today.

Horners, which was hard hit by the collapse of Rover in 2005, now operates Mitsubishi and Skoda franchises on Bury New Road, Manchester, and on Queensway Rochdale.

Sources close to the situation said the company was ‘examining its position’ and was in talks with its lenders, Bank of Scotland, over its future viability.

According to its most recently filed accounts, the company, which is a major sponsor of Oldham Athletic FC, made a loss of £564,275 on sales of £29.7m. According to the accounts for the year to June 30, 2007, Horners employed around 130 people and owed creditors more than £9m.

Although much reduced from its pomp, Horners remains a respected name in the north west motor trade.

Family

The original business was established in 1922 as an Austin dealership. Over the years F Horner & Son became a landmark on Bury New Road. The Horners family sold out in 1986.

The consumer downturn, combined with rocketing fuel prices and government proposals for green car taxation, has hit the new and used car market hard.

Higher interest rates , less available and more expensive and hard-to-access finance have been key, as consumers have shunned spending on ‘big ticket’ items such as car sales.

In the past week, national dealership groups Pendragon and Lookers have warned over difficult market conditions and said they were looking to cut costs. In the case of Nottingham-based Pendragon, this meant 500 job losses.

The financial problems at Horners have left some customers in limbo.

Justin Wilson from Blackley says he is among a string of car buyers who has been left in the lurch. Mr Wilson put down a £500 deposit for a Subaru Impreza at the Rochdale branch last Thursday.

But when he returned this week to collect the keys, trade in his own pick-up truck and pay the final £700 instalment, staff said that because of financial probleems, and they were therefore unable to give him his deposit back or his new car.

Mr Wilson, a 35-year-old landscape gardener, says that when he asked whom he should approach, staff told him they did not have any further information.

The company was unable to provide customers with any details but said they would contact them when they knew more.

Mr Wilson, a father-of-one, said: “When I arrived to collect the car, it was mayhem. People were furious, and it’s clear why. I’m obviously not the only one in this situation.

“I’d shown some interest in the car last week, and the garage then called me and pushed a deal through that I was happy with and excited about. I paid the deposit on my debit card, and as far as I’m concerned that car was mine – and I should have the keys by now.

“I’ve been calling all week, but they still can’t tell me what’s happening.”



See Original Article

Call now if you need help with corporate debts.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

The huge increase in the number of empty retail premises in central Southampton dominated the regional television news on the South Coast on Monday. The next morning a headline in The Times business pages cautioned: “Disastrous reports now pour in from every sector.”

In other words, the parlous state of the economy is now top of everyone's agenda. So that is the bad news but, by the same token, are the good times starting to roll once again for the insolvency and corporate recovery lawyers around the City?

Strangely enough the answer is “no”. A straw poll of a cross-section of City law firms with strong insolvency practices produced a remarkably consistent result. “It's extraordinarily quiet - it's actually rather spooky. We seem to be in a strange twilight zone,” Stephen Gale, head of corporate recovery at Herbert Smith, said.

Paul Gordon-Saker, head of restructuring and insolvency at Stephenson Harwood, agreed: “We had been expecting something of a boom but it has not actually started - or at least the banks are not passing much on.”

Meanwhile, south of the river, Nick Pike, a corporate recovery partner at LG, had the same story. “To be honest, I can't say that we are particularly busy right now.”

So what is going on? The business news suggests that thousands of badly wounded businesses should be limping to their legal advisers for assistance and that the banks would be asking the insolvency practitioners to put the mortally wounded out of their misery. But it is not happening.

The only law firm to report more work than at this time last year is Lovells and all its extra cases have come from the financial services sector. “Even so, the volume of work is much lower than we had expected,” said Robin Spencer, of Lovells's business restructuring and insolvency team. Probe a bit deeper and the consensus this week is that we are in the calm before the storm. But that may be a very bad thing. Older lawyers - with experience of the early Nineties' crash - observed that many banks and business alike are still in denial.

“So long as they can defer facing up to reality they can hope that something will turn up to bail them out,” Gale said. “For those who have only lived through the good times, the expression that ‘values can go down as well as up' was purely theoretical. They didn't really believe it might actually happen.”

Other factors have helped to prolong the illusion. For example, it has been suggested that because many of the deals were done two years ago without any covenants in place, the result is that, strictly speaking, there have been no defaults. But while this disguises the depth of the problem it does not alter it. Nonetheless, it may give comfort to the Government, which, it is alleged in some quarters, is applying pressure behind the scenes to discourage the banks from pulling the plugs. It has even been argued - not without plausibility - that the bankers are putting off the evil hour until next year in order to collect one final whopping bonus before it all goes belly-up.

By common agreement, however, the lawyers think that the trick cannot be kept going longer than the fourth quarter of this year. Some think the “dam will start to burst” in early September, after weak summer sales.

As Ernst & Young noted recently: “Insolvencies are set to increase at a much faster pace in the later part of this year and in 2009. The driving force behind the increases will be the tighter credit conditions ... The full impact of this tightening is just feeding through as credit providers deliver sharp doses of reality to credit-addled individuals and businesses, which are just finding out that they can't live in 'never-never' land forever.” Gale believes that it would have been better for the never-never land bubble to have burst much earlier. “The longer you put it off the worse it will get,” he said.

Corporate recovery is only going to be possible for businesses that still have some funds and credit left to give them room for manoeuvre.

“If the money has run out then there will be no alternative to insolvency,” he says. “I think that we are really storing up big problems for 2009.”

The expectation remains that, by the winter, insolvency and corporate recovery departments will be run off their feet. Spencer said only the biggest cases are likely to be given time by the banks to enter into negotiations. “Because of the complexity of their positions it is going to be fiendishly difficult to sort it all out,” he said. “There won't be the time or the people available to deal with the smaller organisations, so many will probably be put straight into administration.”

Among other things this may give rise once again to a demand for the UK to adopt a version of the United States' Chapter 11 protection.

With the benefit of time to get their financial breath back some businesses might survive. That luxury is now likely to be denied them.



See Original Article

Call now for help with corporate debts.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

Vadim Chobanu, the owner of the eponymous Vadim Computers, has announced that V-Solutions Ltd, the official company behind the brand, went into voluntary liquidation today.

Initially, Chobanu blamed the credit crunch for the move, and expanded by detailing how the difficulty in obtaining credit has prevented it from launching an exclusive new case this summer and expanding into the European and US markets.

It seems that after he was rejected by his bank he found some enthusiastic investors who had verbally agreed to offer Vadim even more than it had initially asked for. One of the uses for this cash was to be to further the development of a new super-PC called Ragnarok, currently in prototype phase.

The venture capitalists appear to have had second thoughts at the last minute, which Chobanu ascribes to a lack of understanding of the boutique PC market. It was decided that to commence a new search for investment would increase the risk of not being able to pay existing creditors and so, at an extraordinary shareholders meeting today, the decision was made to go into voluntary liquidation.

Chobanu concluded by saying that the liquidators – BN Jackson Norton – will be looking to sell the company as a going concern and will be dealing directly with those customers who have unfulfilled orders. The situation with warranties will apparently only become clear once they’ve gauged interest in buying the company and it was stressed that the brand and operations of Blastflow are unaffected by all this.

Chobanu himself will be moving to a different market sector, but stated his willingness to assist any potential buyers of the company.



See Original Article

If you need help with mounting debts in your business then call now.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

DERRY'S spiralling debt crisis has sparked a bankruptcy epidemic in the city.
An alarming number of helpless families have found themselves financially squeezed to a point where their only option is to seek bankruptcy to clear debts.

In the first three days of this week alone, nine people presented at Derry's Citizen Advice Bureau to apply for bankruptcy.

Jackie Gallagher, of CAB, says the number of clients seeking help each day with crippling debts has almost doubled since last year. She says an alarming number of people in the city have seen their disposable income "wiped out by the pressing economy".

"This is the worst depression I've seen in Derry for a long, long time," she said. "We are snowed under - our debt management team is busier than ever - our queues are going out the door."

She added: "Usually, bankruptcy is seen as a deviation from the norm but now people really see no other way out, no other way to veil their helplessness. The numbers seeking bankruptcy are increasing at a rapid rate. We can't get away from the fact that Derry is drowning in debt."
Meanwhile, Economy Minister Arlene Foster has announced that funding for free debt advice is to double to help deal with the effects of the credit crunch.

"The additional resources now being made available will increase the capacity of the sector to deal with the ongoing problem of over-indebtedness in our society," she said.


See Original Article

If your business is struggling then call us now for help.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

Traction Technology Plc. said it has decided to stop funding its operating subsidiary Traction Technology (UK) Ltd. and that the

unit's board has begun the process to place it into creditors' voluntary liquidation.

The group said in a statement after its AGM it stopped funding the unit because it has very limited cash resources available and that it is monitoring its credit position closely.

Traction Technology added its shares will stop trading on AIM on July 10 after shareholders approved the plan at an EGM, which was also held Thursday.


See Original Article

If your company is in debt then call in the experts for help.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

The parent company of a popular Lincoln bar which closed in April has gone into liquidation.

As previously reported in the Echo, So:Luxe, in Brayford Wharf North, mysteriously closed its doors leaving staff wondering when they would be paid.

Now Woodhall Spa-based So:Leisure Ltd, which ran the bar, is being wound up because of its liabilities.



So:Leisure Ltd was formed in 2005 by the Cavalier-Jones family.

An un-named representative of the company told the Echo in May that the bar "had not made any money for the best part of a year" and that the unit had been sold.

No-one from So:Leisure Ltd was available to comment on the company liquidation yesterday.


See Original Article

Call us now for help if your business is in debt.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

Ben Anderson, 31, fears he will be a victim of the credit crunch. He is saddled with £36,000 of debt alongside a hefty mortgage after stretching his finances to buy his first home when prices were at their peak.

He pays £1,599 a month on a 25-year £237,450 repayment mortgage with Northern Rock, fixed at 6.35 per cent for two years. To get a foot on the first rung of the property ladder, he borrowed 95 per cent of the value of his one-bed flat, bought in August last year for £249,950.

To meet stamp duty, legal fees and other property purchase costs, he took an additional £30,000 unsecured loan under Northern Rock's controversial "supersized" Together mortgage. "I pay £199 a month for this, at the same rate as my home loan, but this switches to the standard loan rate at the end of the deal, which will see payments shooting up. I worry I will find it difficult to move this debt if I still have a lot to pay off then."

This isn't the only debt burden for Ben, who earns £77,000 as a database administrator for an information technology company.

He also pays £450 a month for a £6,000 personal loan with Royal Bank of Scotland at 9 per cent, with 18 months remaining on the agreement. "I took this out as I was really overdrawn at the time and wanted to clear my credit card debt."

Ben currently has £1,800 on a Barclaycard One Pulse card – an interest-free deal until September for balance transfers and purchases. "I also hold an Amex Gold, Royal Bank of Scotland Platinum and Morgan Stanley Platinum card, all on various interest-free deals. I have nothing on them at the moment," he adds.

For short-term savings, Ben has £1,000 in premium bonds, but after servicing his debts, he has no spare cash to top these up or put anything into other accounts. "I'm no good at leaving money in easy access accounts, which is why I picked premium bonds: they are hard to cash in."

Ben has no retirement plan in place. "I hear too many bad things about pensions," he says. "As I don't have one, I'd like to be able to commit to a long-term investment plan that can grow over time."


THE CURE

Ben earns a high salary, but with large sums of debt and the spectre of negative equity in a sinking property market, he faces an uphill struggle to get his finances on an even keel.

"The size of his mortgage versus the value of his property could see Ben in quite a predicament when his current deal ends," warns Dan Clayden of the independent financial adviser (IFA) Clayden Associates.

However, after mortgage repayments and living costs, he should have some £1,500 a month to focus on reducing his debts and improving his financial situation.


Debt

Ben would be wise to use the £1,000 in premium bonds to pay off some of the debt on the Barclaycard, says Mr Kidd. While this is currently on an interest-free deal, the rate will soar to 19.9 per cent from September, so he should aim to clear it by then.

He should then scan his recent bank statements to see where money could be saved, and put this towards paying down his overall debt, says Adrian Kidd from IFA Mint Financial Services.

It is vital that he maintains repayments on his unsecured loans and overpays when possible to give him the greatest chance of securing good rates in the future, comments Neil Munroe from Equifax, the credit-reference agency. "Any minor indiscretion in the current climate could cost him several percentage points in interest with lenders," he adds.

But Keith Churchouse from IFA Churchouse Financial Planning says Ben should check for any redemption penalties on the Royal Bank of Scotland and Northern Rock loans, as he could be charged for overpaying if he clears the debt ahead of schedule.


Savings/investments

Ben should not be slotting away much in savings until he has his borrowings under control, stresses Mr Kidd. "Any surplus income should be used to pay down debt, and he is only 31 so has time on his side. But he will need to make substantial savings further down the line."

However, Mr Clayden recommends he consider a tax-free cash individual savings account (ISA) as a short-term "emergency fund" and a stocks and shares ISA as an investment that will bring greater returns in the long run. Premium bond prizes may be tax-free, but there is no guarantee Ben will strike lucky.


Property

Ben's mortgage with Northern Rock, the best-known casualty of the credit crunch so far, is due to end in August 2009. "The Rock is actively looking to reduce its mortgage book and has come to an arrangement with Lloyds TSB to offer customers an alternative mortgage at the end of their fixed rate," says Mr Clayden.

He wouldn't be able to remortgage today, the advisers warn, because of the tighter criteria being applied by lenders. "Hopefully the situation for borrowers will improve by next year," says Mr Kidd. "But if it's still bleak and house prices continue to sink, his only option may be a much higher mortgage rate."

Once other debts have been tackled, Ben should make overpayments to reduce his mortgage term and the interest paid, adds Mr Churchouse. It would also be sensible to consult a mortgage broker, who can scour the whole market several months before his deal ends to boost his chances of finding another offer.


Retirement

While Ben is sceptical about pensions – and he has other financial priorities at the moment anyway – they do offer higher-rate taxpayers an attractive means of planning for retirement.

He should check to see if his company offers a scheme and makes contributions on behalf of its staff. If not, he should open a stakeholder pension with a provider like Friends Provident as soon as possible. Payments can be started from as little as £20 a month. "But if he paid in, say, £250, this would come to £312.50 once the tax relief was added," says Mr Churchouse.



See Original Article

Call now if you need help with corporate debts.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk

While most of us will be worrying about the rate of inflation, falling house prices and the looming prospect of stagflation, one group of corporate advisers should be rubbing their hands with glee.

As the downturn bites and company chiefs begin to pay much more attention to the accounts, that’s when the scams, cons and ‘company perks’ come into focus. Who you gonna call? Yes, the fraud busters. Or the forensics experts or, if things get really bad, the insolvency practitioners.

This week claims surfaced that the business world was about to see a significant rise in corporate investigations as a result of the credit crunch.

Observers noted that as the ‘boom time’ fades, cases that would otherwise have ducked below the radar will come starkly into view.

According to Keith Williamson, a director at Alix Partners, there will be a special focus on overseas operations and that companies will need to take proactive steps to avoid fraud and bribery.

Wise words and they should be manna from heaven for fraud and forensics specialists looking to build their practices.

Indeed, the latest figures from BDO Stoy Hayward’s FraudTrack study claims that reported fraud has risen to a value of £705, for the first six months of this year, up a huge 74% on the same period last year.

Simon Bevan, head of fraud investigation at BDO, said: ‘We are seeing a dramatic increase in banks, corporates and public sector organisations contacting us directly about our fraud investigation and prevention services and we expect this to rocket further still. Interest is coming from Board level as senior executives at British businesses are becoming increasingly concerned about fraud risk as the credit crunch bites.’

While you might expect to see insolvency business improve, as an indication that these assumptions are being borne out, it seems this is not happening. While credit insurers are seeing claims rise and an increase in debt collection work, Martin Williams, managing director at credit agency Graydon, says the expected ‘increase in liquidation figures are conspicuous by their absence so far’. Indeed, he hears from insolvency practitioners that the predicted uplift in work hasn’t happened yet.

This might be a concern for some insolvency practices that have recently made acquisitions to beef up their insolvency offering.

However, there is still the rest of the year and if Bank of England warnings are anything to go by, the downturn could end up yielding an insolvency bonanza too.



See Original Article

Call now for help with corporate debt.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk