Northern Rock, the Government-owned mortgage lender, has been forced into a raft of new sub-prime writedowns that will see its total impairment charge nudge £400m

In total, writedowns are understood to have increased by 40 per cent from £281m in December to around £395m this month, with the Rock's £167m US CDO portfolio virtually worthless because of deteriorating economic conditions.


The bank will also detail how much money it has paid advisors for the strategic review that led to the Government's decision to nationalise it. It is understood Northern Rock's investment banking advisors Merrill Lynch, Citigroup and Blackstone - who at one stage hoped to share a success fee of £75m - have so far been paid just £5m between them.

But the bank will say it has paid more than £50m to its legal and accountancy firms - including City firm Freshfields Bruckhaus Deringer and PricewaterhouseCoopers - whose fees are based on an hourly rate.

Meanwhile Northern Rock is in the midst of an internal communication programme with the 85 per cent of its staff who participated in its employee share schemes and who are almost certain to lose all their money. Those who have been with the company for up to 10 years will have lost an average of £10,000.

The annual report will also detail the pay-off of former Rock chief executive Adam Applegarth, thought to have received a golden handshake worth more than a million pounds. The deal has been criticised by shareholders.

Applegarth's successor Ron Sandler will also use the report to flesh out his plans for Northern Rock and will say the bank's mortgage book has already been considerably reduced by customers moving their mortgages elsewhere.



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Notorious ticket tout Michael Rangos was this week officially named as the man behind four online ticket firms featured in Guardian Money last month, which have now been shut down by the government.

Rangos was the boss of another rip-off firm, Getmetickets, and has links to Ticket Tout, which collapsed spectacularly a year ago. Yet it appears he is still peddling his wares online and nobody seems able to stop him.

Last month we told how London Ticket Shop and three other companies had been put into provisional liquidation, amid claims that large numbers of music fans have been left out of pocket. The companies traded via the websites londonticketshop.co.uk and londonticketmarket.com.

This week it was announced by the Insolvency Service that the firms - London Ticket Shop Limited, based in south-west London; London Ticket Shop Szolgaltato Es Kereskedelmi KFT, based in Hungary; Cyprus-based MLT Services Limited; and Ticketout Limited, which operated in central London - have been wound up in the high court following an official probe.

"As a result of the companies' activities, there had been a considerable number of complaints from members of the public concerning the failure to receive tickets they had paid for in advance," says the Insolvency Service. "The court heard that Michael Rangos was behind the operation of the four companies wound up, although he attempted to conceal this involvement."

The investigation found tickets had been sold which the firms did not possess - and, in some cases, which did not even exist.

The judge, registrar John Simmonds, said he had read the evidence "and was very satisfied that there had been a conspiracy to defraud the public and benefit the particular 'gentleman' behind the companies".

Some Guardian Money readers will be aware that Rangos has a lot of form in this area. His online ticket company Getmetickets was shut down by the government two years ago after it was found to be charging way over the odds for concert and theatre tickets it did not have.

On BBC1's Watchdog programme in late 2005, Sir Cliff Richard memorably said of Rangos: "I think that he's being manipulative. I think he's extortionate and I think he's a very mean man doing this to people."

Then there was Ticket Tout, which collapsed a year ago. Well over 6,000 music fans lost out to the tune of £1.7m as a result of its demise. Many had forked out hundreds of pounds to see acts such as Muse and Arctic Monkeys. Both Ticket Tout and Rangos's Ticketout Limited shared the same central London address; the Insolvency Service says Ticketout Limited was set up to provide a bank account for Ticket Tout, "which had its bank facilities withdrawn".

It is still not clear how many people have lost money because of the activities of the four firms wound up last week. But, last month, officials were saying they had not been able to recover any tickets for events, so there were none that could be distributed to customers. Fans of Bruce Springsteen - who played a show at London's O2 Arena in December which sold out in minutes - were among those affected.

Money revealed last month a 'clone' of the London Ticket Shop website had been launched - presumably by Rangos - and it was still up and running this week, which makes you wonder why the powers-that-be have not managed to pull the plug on it.

This new site, London Tickets Express, claims to be "the web's premier ticket brokers," and is selling tickets for acts including Kylie at Manchester's MEN Arena (prices range from £49 to £245), Bon Jovi at Twickenham Stadium (with prices for standing tickets starting at £35, even though See Tickets and Ticketmaster quote a face value for these of £45-plus) ... and Rangos's old friend, Sir Cliff. It says it is a "Hungarian-based sole trader business". No address is given, and there does not appear to be a phone number for people to call, just an email address.

The new site even refers to the now-defunct London Ticket Shop - the "LondonTicketsExpress.com frequently asked questions" section includes the line "London Ticket Shop operates a very strict non-negotiable no cancellations policy..."

London Tickets Express's website address is londonticketsexpress.com. However, if you accidentally type in londonticketsexpress.co.uk, you will find some enterprising soul (not us) has pasted up the Guardian Money report from February 16, to act as a warning to music fans.

A spokeswoman for the Insolvency Service says that once a company goes into compulsory liquidation, the service will look at the conduct of the directors during the period leading up to the firm's insolvency.

If there has been misconduct, a director can be disqualified for up to 15 years, though it can take months for it to emerge whether or not action has been taken against any individuals.

If you bought tickets from one of the four companies and did not get any, send an email to piu.or@insolvency.gsi.gov.uk or write to The Insolvency Service, Public Interest Unit, 21 Bloomsbury Street, London WC1B 3SS.

Rangos sent us an email saying: "My legal team is currently in the process of reviewing what was actually said in court about me, as I was not involved and did not participate in any way in these proceedings, which were actually about the companies and not myself.

"I categorically deny being involved in any criminal activity, including 'conspiracy to defraud'. These are, therefore, highly defamatory allegations made against me."


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Two weeks after Grand Slam success, WRU group chief executive Roger Lewis talks candidly to Steffan Rhys about his months spent trailing Eric Clapton with a tape recorder, almost turning down Welsh rugby’s top job and the pursuit of happiness

ROGER LEWIS pauses and thinks for a long time when asked if he is happy. “There are moments of happiness,” he says.

“But how do you define happiness? I suppose it is an inner glow, a sense of seeing people fulfil themselves or seeing what my children have achieved.

“Or being around close, intimate friends I’ve known since I was 12 with no airs or graces and we’re all completely relaxed.

“But at the moment there’s a job to be done and I approach it with an intensity that does not allow it to be diluted.”

Until that job is done, until the Welsh Rugby Union has reached the levels to which he aspires, the man who has headed it since 2006 remains firmly fixed on the continual improvement of both himself and the organisation he heads. And he will allow himself few distractions, despite once having a plan that would have seen him retire three years ago.



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The number of IT firms going bust decreased in the first quarter of the year, according to figures from credit reference agency Graydon.

But channel players are being warned to get their businesses in shape to avoid the credit squeeze.

January 2008 saw four administrations, 10 creditors’ meetings and 16 winding-up petitions issued compared with 14 administrations, 19 creditors’ meetings and 13 winding up petitions in 2007.

Figures fell in February with nine administrations (11 in 2007), 14 creditors’ meetings (19 last year) and 16 winding-up petitions (no change). March paints a similar picture.

Mark Ancell, head of intelligence at Graydon, told CRN: “The channel appears to be holding its own in the first part of the year, but there are larger insolvencies to come. Last year we saw some sizeable failures, including Evesham and Watford Electronics.

“The credit crunch in the US will filter to the UK and a lot of analysts are talking about a recession,” he said. “But firms that have their back-office business in good shape and are not borrowing heavily should be able to weather the storm.”

Nitin Joshi, founder of ChannelMoney, agreed: “Last year some large players went out of business and some distributors’ debts were large. Distributors now have a more measured response and have learned from those mistakes. But I think we are seeing the calm before the storm.”

Eddie Pacey, director of credit at Bell Micro, said: “Lenders will get tougher with credit terms. System builders and sub-distributors operating on thin margins will be hit.”


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Adsearch (UK) Ltd invoiced local businesses in connection with advertisements it said had appeared. But an investigation by The Insolvency Service found no evidence of website development after nine months of the company's existence.

The Companies Investigations Branch of The Insolvency Service, which works on behalf of the Department of Business, Enterprise & Regulatory Reform, said that the company did not appear to have undertaken work it might expected to have.

"Despite the fact that the company had been trading for more than nine months by the time the investigation commenced, no website had been created and no evidence of development could be produced to the Investigator," said a statement from The Insolvency Service.

The investigation found that the company had earned income during its existence, despite a seeming lack of publication activity. "Nevertheless, the Investigator was able to show that the company's bank account had received more than £22,000 and that it had failed to maintain or preserve any records to show where these funds had emanated or to whom they had been paid out," said the Service.

The investigation also found that the company's only director had not exercised the kind of control over the firm that it would hope for.

"The sole director of the company had made no attempt to monitor or control representations made to advertisers, had only attended its business premises intermittently and for short periods, had failed to take adequate steps to safeguard the company's accounting records and had, therefore, failed to exercise proper stewardship of its affairs," said the statement.

The Insolvency Service said that the company was insolvent, that it could not meet its ongoing obligations, and had it wound up.

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Mortgage debt in Northern Ireland is rising faster than anywhere else in the UK, the Belfast Telegraph can reveal today.

The news comes as the property market begins to feel the full effects of the credit crunch and threatens to spell financial heartache for thousands of Ulster homeowners.

House repossessions via the courts have risen by almost 40% in just six years - with experts predicting that figure will rocket over the coming months.

But although court service figures confirm a significant increase in Mortgage Repossession actions - from approximately 1,600 in 2002, up to 2,213 in 2007 - the figure falls short of reflecting reality.

Speaking to the Belfast Telegraph today, Scott Kennerley, Research, Training and Development Officer (Money Advice) at Citizens Advice Regional Office, said it was only the tip of the iceberg.

"The 40% increase in mortgage actions for repossession in Northern Ireland is sizeable, but that doesn't give the full picture," he said.

"They are only the cases that get to court. Some people sell their homes, or give them back, to avoid court action, but at the end of the day they still lose their homes."

He added: "The time for tightening our belts is upon us."

Research by credit reference agency Experian revealed that on top of growing mortgage debt, Northern Ireland also experienced the biggest change in total debt, up 23% in the last 12 months.

The findings also showed that spiralling house prices - where the NI average is £250,586, and the UK is £222,256 - represent a hike of 39% in just one year, compared with just 6% nationwide.

Analysts agree there are tough times ahead - especially given the recent hikes in fuel prices, rates and grocery bills - with some feeling that consumers were duped during the property boom.

Housing expert Paddy Gray pointed to what he called "irresponsible lending" on the part of financiers, which has helped fan the flames of repossession.

"There's an affordability crisis looming," he said.

"There was a frenzy at the peak of the boom last year, when people were willing to pay just about anything for a property. Many over-stretched themselves beyond their means, and didn't factor in the cost of living."


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THE number of people declared insolvent in Wales has risen for the seventh successive year, as the impact of heavy credit card borrowing hits consumers, the Insolvency Service revealed.

There were 2,968 bankruptcies in Wales in 2007 – a 168% increase on 2000. A total of 2,218 – a huge 446% increase over the same period – chose an Individual Voluntary Agreement (IVA), a controversial alternative that freezes debts and usually writes them off after five years. IVAs were designed to help small businesses but have become increasingly popular with individuals. The highest rises in the use of IVAs by individuals in Wales were in Rhondda Cynon Taf, Cardiff, Swansea and Flintshire.

Separate research from the Skipton Building Society suggests three quarters of young people are struggling with debt, with one in five admitting they spend more than they earn each month. Around 74% of under-35s are in the red, owing more than £9,000 on average, while 12% owe more than £20,000.

Half of young people have debts on credit cards, while a further 33% have a student loan, 28% have a bank loan and 12% owe money on store cards. And 12% also owe money to their parents and 4% borrowed cash from other relatives.

Jenny Willott, the Liberal Democrat MP for Cardiff Central, said, “Labour’s economic boom is turning into financial bust for an increasing number of people right across Wales. Personal debt levels in Wales have swelled beyond recognition over the last 10 years.

“High interest rates are hitting an increasing number of Welsh families who have borrowed heavily to meet the rising cost of living and spiralling house prices.

“We must tackle low financial literacy levels and meet the growing demand for independent financial advice.” A network of free financial advice centres could be created.

The Association of Business Recovery Professionals’ Nick O’Reilly said, “The Government is out of step with how bankruptcy is used in this country. They don’t seem to understand that it is now mostly used by private individuals to get relief from personal debt.”


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THE Hearts Supporters' Trust today admitted concern over the club's impending financial results, which will be published at the end of the month showing a loss of more than £8million on last year with debt levels peaking at £38m, writes BARRY ANDERSON.

Derek Watson, chairman of the Trust, told the Evening News: "We are always concerned by debt at the club but it's not unexpected. The figures quoted are pretty much what we imagined they would be despite rumours the debt was going to be higher.

"An important aspect is that you still have the Craig Gordon transfer money to factor into this amount. Hopefully it's manageable but it's worrying because the figures are too big."

Hearts have so far received £7m of the agreed £9m from Sunderland for Gordon, with the deficit dependant on appearances and Sunderland's ability to avoid relegation from the English Premier League. Details of the goalkeeper's transfer will not be included in the accounts due as they only cover the period to July 31, 2007. Gordon left Tynecastle just over a week later.

The club's AGM will be scheduled for late April, where shareholders are sure to demand answers as to why the debt has risen so steeply from last year's figure of £28.4 million. Hearts' £10m wage bill is not thought to have reduced and planning for Tynecastle's new main stand is understood to have cost around £1million to date. Other causes of the loss are expected to include interest to creditors.


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A company that signed up businesses to advertisements which were to appear on a website dedicated to the theme of crime awareness has been wound up in the High Court following an investigation by the Companies Investigation Branch (CIB) of the Insolvency Service.

CIB's investigation found that Wirral based Adsearch (UK) Ltd issued invoices and demands for payment in connection with advertisements that it had purportedly sold to other small business across the country. However, despite the fact that the company had been trading for more than nine months by the time the investigation commenced, no website had been created and no evidence of development could be produced to the Investigator. Nevertheless, the Investigator was able to show that the company's bank account had received more than £22,000 and that it had failed to maintain or preserve any records to show where these funds had emanated or to whom they had been paid out. Additionally, CIB's investigation also established that the sole director of the company had made no attempt to monitor or control representations made to advertisers, had only attended its business premises intermittently and for short periods, had failed to take adequate steps to safeguard the company's accounting records and had, therefore, failed to exercise proper stewardship of its affairs. Furthermore, the company was found to be insolvent and unable to finance the ongoing development and maintenance of the website.


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A demand that Cardiff City F.C. pay up an alleged 30 million pound debt immediately has been thrown out by the High Court.

The claim by Swiss-based investment company Langston Corporation will now go to a full trial at a later date.

The Bluebirds - who next month meet Barnsley in the semi-final of the F.A. Cup - have said having to pay up would put them into administration.

Administration would trigger an automatic 10-point deduction by the Football League that would move City to the relegation zone.

The club say the debt was arranged by a previous management and is not due to be paid until 2016.


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GUERNSEY, England - (Business Wire) On the 17th March 2008, before the Royal Court of Guernsey, an order was granted placing CCC into compulsory liquidation under section 94(a) of the Companies (Guernsey) Laws 1994 as amended pursuant to a special resolution of members. Mr Alan Roberts and Mr Neil Mather, both of Begbies Traynor, were appointed joint liquidators of CCC and duly sworn into office on that day.

On the 18th March, 2008, the Royal Court in Guernsey approved the appointment of two additional liquidators, Mr Chris Morris and Mr Adrian Rabet, both also of Begbies Traynor.

Under Guernsey law, the Liquidators are now responsible for realising the assets and establishing the liabilities of CCC and are legally empowered to act on its behalf in those connections. All powers of the directors to act on behalf of CCC, except as may be expressly permitted by the Liquidators from time to time, have now ceased and CCC has ceased to undertake business.

Given the circumstances the Liquidators have requested that the Netherlands Authority for the Financial Markets in the Netherlands suspend trading of shares in CCC with immediate effect and until further notice. The decision of that authority is pending.

Section 80 of the Companies (Guernsey) Laws 1994 as amended provides that any transfer of a company's shares after the commencement of a voluntary winding up, other than a transfer made to or with the sanction of the liquidator, is void. There is no equivalent provision of the Companies (Guernsey) Laws 1994 as amended applicable to companies in compulsory winding up. Accordingly, there remains some uncertainty as to whether any transfer of a company's shares after the commencement of a compulsory winding up, other than a transfer made to or with the sanction of the liquidator, would also be regarded as void. Anyone dealing in the shares of CCC should take their own legal advice.

On 17 March 2008 the management of Euronext Amsterdam N.V. announced that as from 18 March 2008 prices and volumes relating to the ordinary shares of CCC will be reported in the special section for securities subject to a listing measure, with reference to the press release of CCC of 16 March 2008. that measure was to conform with Rule A - 2706/1 Euronext Rule Book, Book II and Euronext announcement 2003-058 and 2004-013. The measure will endure for a maximum of one year.

The Liquidators have given an address for any formal service of proceedings relating to the liquidation in Guernsey at the offices of the Liquidators’ legal advisers, Bedell Cristin, La Plaiderie House, La Plaiderie, St Peter Port, Guernsey GY1 1WG.

The Liquidators request that creditors' claims should be submitted to them as soon as possible at the address indicated below and that anyone who holds assets of CCC deliver them to the Liquidators forthwith.


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A stage school that closed weeks before students were due to sit exams may have been a casualty of the credit crunch.

Stonelands School of Ballet and Arts in Hove closed in February without warning forcing scores of students to find new schools weeks ahead of their GCSEs.

The Argus can reveal Stonelands will hold a meeting of creditors on Thursday to place the school in voluntary liquidation.

Although no reasons have been given for the sudden closure, an insolvency firm has hinted the economy may be to blame.

Richard Simms, the managing director of insolvency practitioners FA Simms and Partners Limited, which is managing the liquidation, said: "The current economic and market conditions may have contributed to the business difficulties.

"Once we are appointed, we will be working with all the key parties involved to investigate the reasons for the failure and ensure that any required action is taken."

The meeting will discuss deferring payments to creditors. Mr Simms said there was no other option but to do a managed close down of the school.

The sudden closure of the £3,000 a term academy in Church Road shocked parents who were given just five hours notice.

Parents have received no explanation as to why the school closed which has added to their frustration.

Ian Jowitt's daughter was about to sit her GCSEs at the school. He claims the school owes him nearly £4,000 in fees and deposits and is one of a handful of parents who have threatened to sue the school's owner, Diana Carteur.

Former teachers have claimed they were also kept in the dark over the closure which laid off a staff team of ten.

One teacher, who did not wish to be named, said: "We have all been left devastated. None of the teachers knew of the impending closure until we arrived at school on the Tuesday.

"We were asked not to tell the students until their parents had been informed. Many parents could not collect their children until the end of the school day.

"This was very distressing for the staff who all stayed on to keep the children calm, this despite having been told we had also lost our jobs.

"We were asked not to speak to the press, which we did assuming there would be some kind of official statement.

"As it is many of us are now unemployed and for some it was our only form of income to cover mortgages, rents and provision for our own children."


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The number of people seeking advice because they were struggling with mortgage repayments and other household bills surged in the first two months of this year, and the rising cost of living could force many more people into insolvency, charities warned today.

Citizens Advice said its bureaux in England and Wales had seen a 35% increase in the number of cases involving mortgage arrears, compared with the same period last year.

A survey of 73% of its offices found debt counsellors had dealt with 215,000 new debt cases in January and February alone, many of them involving people struggling to keep up with rising living costs.

As well mortgage arrears, an increasing number of homeowners contacted the charity about problems involving day-to-day costs such as energy, water, telephone and council tax payments.

Meanwhile, the Consumer Credit Counselling Service (CCCS) said it had set up a bankruptcy centre in Birmingham to help the growing number of people finding themselves with too little money to go onto a debt management plan.

The charity said "super-inflationary" rises in basic living costs were making it tougher for people who were in debt, particularly the least well off.

The news comes as the latest inflation figures show a rise in consumer price inflation from 2.2% in January to 2.5% http://www.guardian.co.uk/business/2008/mar/18/economics.interestrates, with rising energy and food costs pushing up the cost of living.

It follows warnings from the Council of Mortgage Lenders that repossessions could rise by 50% this year, as the credit crunch forces lenders to raise interest rates and tighten lending criteria.

Additional pressure
Teresa Perchard, director of policy for Citizens Advice, said the sharp increase in the number of mortgage arrears problems was "worrying".

"These latest figures paint a worrying picture, suggesting a significant number of households are struggling to meet their most basic living costs," she said.

"The combination of big increases in household bills, especially fuel, and rising housing costs is putting additional pressure on people's finances when they are already stretched to the limit."

Despite the rise in mortgage-related enquiries, credit and store cards still account for the largest proportion of debt problem, Citizens Advice said, although the number of cases was down 9% on the first two months of last year, reflecting a fall in outstanding balances across the industry.

However, problems relating to overdrafts were up 7% and debt is now the number one issue dealt with by the charity's counsellors.

It said in the 2006/07 financial year it had dealt with 5.7 million new cases, more than 1.7 million of which concerned debt, and advisers are now dealing with more than 6,600 debt problems every working day.

"If people have debt problems they should get help straight away," said Perchard.

"We cannot stress enough the importance of telling your creditors as soon as you have difficulties in paying - they should treat you sympathetically."

As well as giving advice on repaying a debt, a charity like Citizens Advice could also help someone ensure they were claiming the benefits they were entitled to, she added.

Belt tightening
Separate research published today by credit reference agency Experian suggested consumers and lenders had already begun to tighten their belts before the credit crunch started to bite late last year.

Figures show the total outstanding balances on UK borrowing rose by 9.24% over the last 12 months, slowing from a 14% rise over the previous year.

The total outstanding debt now stands at £1.1 trillion, up from £1tn this time last year.

However, Experian said the "negligible growth" in credit card balances suggested consumers had taken a "more responsible approach to borrowing".

"The debt data shows that, in the last 12 months, growth in lending has slowed markedly across all key credit products (mortgages, hire purchase, loans, credit cards and overdrafts) compared with the previous 12-month period," Experian said.

"Credit tightening on cards, loans and mortgages was already well established in advance of the credit crunch.

"This cautious and responsible approach has prevented an explosion in credit card usage."

The research suggested that people in Richmond-upon-Thames were the most indebted, with £53,533.16 per head, while the least indebted area was Dumfries, with £12,458.07 per head.

Northern Ireland showed the biggest change in total debt, up 23% in the last 12 months, to £17,921.63 a head.

This was followed by Kensington, Chelsea, Wandsworth, Hammersmith and Wolverhampton.


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Apollo Management, the American private equity group, could be forced to pump millions of pounds of cash into Countrywide, Britain's biggest chain of estate agents, in a bid to shore up its investment in the group.

Countrywide's debt is changing hands at "seriously distressed" levels, according to specialist traders who believe the company will need to call on Apollo's support to help it through the slowdown in the British housing market.

Apollo bought Countrywide in April last year for £924m which included £305m of equity provided by Apollo. Traders said that, given the decline in share price of Countrywide's quoted rivals, Apollo's equity stake will have at least halved. The various tranches of debt were arranged by Credit Suisse, Deutsche Bank and Goldman Sachs.

One trader said: "Countrywide's senior debt is trading at 67p in the pound and the bonds are 51p in the pound. The big discount is because traders believe the company will need more cash from the sponsor if the housing market continues to deteriorate. The discount also shows the market believes there's a risk the sponsor won't stump up more cash."

Sources close to Apollo said they were "not worried" about their investment.

There are also concerns in the market over the performance of Foxtons, the London-based estate agent bought by BC Partners in May 2007, although people close to BC insisted this weekend that Foxtons was trading according to a plan that was drawn up last June. The takeover of Foxtons was valued at £355m, of which BC Partners paid £121m.

This weekend a spokesman for BC Partners declined to comment.



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HUNDREDS of mums-to-be have been plunged into crisis as a baby goods firm crashed.

Many have paid a small fortune for prams and maternity essentials ahead of the big day.

But now they look like getting nothing after the owners of the Newcastle Pram and Nursery Company, on Shields Road, Byker, put the firm in voluntary liquidation.

The business ran a savings card-style scheme, where customers paid cash installments up front for items they would receive in the future.

But now, its shelves have been cleared and its warehouse emptied as administrators moved in.

That leaves huge numbers of expectant mums in the lurch, desperately trying to raise the money to pay for replacement prams, cots and other accessories.

Today, victims told of their anguish as company bosses blamed the rise of internet shopping for its crash.

Keith Miller, one of the firm’s registered directors, said: “We tried everything and borrowed as much as we could but we had no choice but to go into liquidation.

“There will be hundreds of customers who have paid money and we have tried to speak to as many as possible.

“We just want to apologise to everyone. The internet has rocked everything and even though we started trading on the internet, we couldn’t cope with it.”

Company records show the Newcastle Pram and Nursery Company has two directors - Keith Miller, of East Denton, Newcastle, and Colin Tweddell.

Today, the shop shutters are down and a sign in the window, says: “Closed due to illness.”

The company’s website says it has been shut down for maintenance.

Punters were given payment cards and invited to call in any time they wanted to pay some of their balance off. This was recorded in writing on their cards, with most agreeing to collect their goods immediately before or after having their babies.

The firm is also listed as having a warehouse on the Westway Industrial Estate, Throckley, Newcastle, and that has also been emptied.

Administrators Tenon Recovery was appointed on February 28, with customers still paying just a week before that, and creditors will be invited to register with them.

Police and trading standards officers also received calls about with some customers fearing they were victims of fraud.

Dave O’Brien, of Newcastle trading standards, said: “We have received a number of reports.

“Because of the present situation, we would advise people to contact the administrators who have been appointed and to put their name down on the list of creditors.

“If people have not received their goods and they have paid on credit card, or any other form of credit, these firms have joint liability under the terms of section 75 or the Consumer Credit Act.”

A police spokesman said: “At this time there is no criminal investigation into this company.”

What to do now

ANYONE who fears they are owed cash or products by the Newcastle Pram and Nursery company is being asked to get in touch with its administrators.

Tenon Recovery, in Sunderland, is holding a meeting for all creditors of the company on April 7 at 11am.

Anyone wishing to attend needs to register with Tenon no later than noon the previous day, as well as lodging evidence of their dealings with the firm.

A list of creditors will also be publicly available at the Tenon offices, Ferryboat Lane, Sunderland, between 10am and 4pm on the two working days prior to the meeting.

The meeting, where creditors will vote on issues relating to the business’ assets, will also see decisions made about payments to the liquidators.

Customers who used credit cards to pay for products should contact the companies with whom they hold their account.


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Bear Stearns has been forced to seek emergency funding to stave off insolvency, as the ongoing credit crisis threatened to claim its biggest victim yet.

Shares in the New York investment bank tumbled 8% at the start of trading on Wall Street after it revealed the bailout package, backed by the US Federal Reserve and JP Morgan.

The company admitted that its financial position had "deteriorated sharply" in the last 24 hours.

Bear Stearns had repeatedly denied in recent days that it has a liquidity problem through its exposure to hedge funds, which are currently being squeezed hard by the credit crunch.

According to analysts, Bear Stearns was the biggest buyer and packager of mortgage securities in the boom years. These mortgage-backed assets are at the heart of the credit crunch. Yesterday the Carlyle Capital hedge fund went bust after investing around £11bn in mortgage debt.


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In the tidal wave of comment that followed yesterday's Budget, the trade association for insolvency specialists, R3, struck a particularly relevant note, albeit on one of the Budget's more obscure provisions.

In 1900, it said, 3571 individuals went bankrupt. In 2006 the number was 52,000 - and that, of course, was when times were good and lenders were still willing to indulge. In the same period, the amount of debt attributable to companies in the insolvency market had shrunk significantly. The message was clear. These days it is individuals rather than companies that go bust.
It is likely to get much worse. A meeting of the Insolvency Practitioners Association in the City last night should have been an upbeat occasion on the basis that bad times are just around the corner. But the view from the front was that they are already upon us.

In the words of one member, the phones started ringing at Christmas and they have not stopped. Indeed, he said, the real level of personal bankruptcy is far higher than official Government figures shows because people and their lenders are still in denial.

There are large numbers of cases where people have stopped paying their mortgages but they are not being foreclosed upon because the lenders know there is nowhere near enough security for the loan and do not want to have to recognise the loss, he claimed.

Shades of Northern Rock, which had a reputation for not co-operating with Individual Voluntary Arrangements - a kind of bankruptcy by instalments - because it did not want to have to admit its loans were going sour. But the practice has apparently spread. Lenders prefer a kind of phoney war, full of empty threats and gestures but always stopping short of confronting reality.

But reality will catch up with them soon enough. What sets this credit crunch apart is that the distress is in the personal sector, not the corporate. Companies outside private-equity are quite robust and well financed. Individuals, in contrast, have been on a 10-year debt binge where they have treated their homes like automated cash machines, and now an uncomfortably large number can keep afloat no longer.

How the Government will cope with this as the problem snowballs is a moot point. Whether it is compatible with its growth forecast of 2.75% is highly unlikely.


Fed puts Rock in a new light


The decision by the US Federal Reserve to accept mortgage-backed securities as collateral for loans to the banking system does rather put Northern Rock in perspective.

Cut through the jargon, and what the Fed has agreed to do is take on to its own books a load of mortgage assets that commercial banks were unable to sell at face value to anyone else. This may be because those assets were not worth face value, or it may be that they are probably OK but there is such distrust around no one could be sure. Only the government has deep enough pockets to take the chance.

That is essentially the Northern Rock problem - the assets are said to be sound and of good quality, but no private organisation was prepared to take the chance so in the end only the Government was prepared to lend the organisation any money.


Scary stats on US home loans


People compiling the figures for the US mortgage meltdown certainly know how to frighten. America has an estimated 46m residential mortgages and, in the final quarter of last year, 2% of them had been foreclosed upon and almost 6% - which equates to more than a quarter of a million homes - were behind on the payments.

However, those figures apply to all homes. Looking only at subprime mortgages the figures were very much worse, with some 13% already in foreclosure and 20% past their due date. And this, of course, is before the majority come up for resetting at higher rates of interest when their initial, enticingly low teaser rates run out.

Going forward, American economists widely predict that house prices, which are already down an estimated 10%, could fall by another fifth. If this happens, they further predict that as many as 20m homeowners will have negative equity - meaning the loan exceeds the house value - which of course makes it financially, if not morally, rational for them to default and send back the keys.

But the scary thing is the size of this potential default. A figure of 20m with negative equity would account for more than two out of every five US homeowners.



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A court has ruled that Whistlejacket, a structured investment vehicle (SIV) that went into receivership last month, must pay off creditors that were due to be paid on the day it declared insolvency.

The decision, made last week, may have some impact on how creditors of other troubled vehicles -- Cheyne Finance, set up by hedge fund Cheyne Capital Management, and Rhinebridge Plc, set up by German bank IKB (IKBG.DE: Quote, Profile, Research) -- will be paid.

Deloitte & Touche was appointed as receiver of Whistlejacket on February 12 after a drop in the value of the SIVs assets led its sponsor, Standard Chartered (STAN.L: Quote, Profile, Research), to shelve a plan to rescue it by providing liquidity. The SIV was declared insolvent on February 15.

Deloitte declined to comment on how the judgement might impact Cheyne and Rhinebridge, for which it is also acting as a receiver.

A statement on the ruling was issued on Tuesday, detailing how different holders of debt issued by Whistlejacket would be paid.

The court ruled that holders of Whistlejacket U.S. medium-term notes, due to be redeemed on February 15 on the same date as the insolvency notice, should be paid the amount due in full.

The obligation to repay them "occurred prior to the occurrence of the Insolvency Redemption Event and therefore did not fall to be redeemed on the Insolvency Redemption Date," the statement said.

The Insolvency Redemption Date is March 16, when holders of medium-term notes due to be redeemed after February 15 will be paid.

"If there are investors whose notes fell due before the insolvency event but after the SIV stopped paying, this could have the effect of releasing some of the money to them," said one London-based analyst who declined to be named.


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Devon-based regional contractor Web Group is expected to be formally placed in liquidation by the end of the month following a creditors' meeting last week.

The company - which undertook construction, civil engineering and design-and-build contracts up to the value of around £3m - went into administration in January.

Latest: Conexpo 2008 exclusive: Grammer introduces vibration-levels device... BUDGET: Government reveals new PFI plans... JCB concerned over 2008 construction industry demand... Thursday, 13 March 2008 Web Group facing liquidation
(12 March 2008 00:00)

Devon-based regional contractor Web Group is expected to be formally placed in liquidation by the end of the month following a creditors' meeting last week.

The company - which undertook construction, civil engineering and design-and-build contracts up to the value of around £3m - went into administration in January.

Around 50 people were laid off shortly afterwards, while a skeleton staff remained to complete a few ongoing profitable jobs.

Joint administrator Kirk Hills chartered accountants failed to find a buyer for the company and it was decided to put the company into liquidation at a creditors' meeting last week.

In its last available published set of accounts for the year ended 31 May 2006, Web suffered a pre-tax loss of more than £376,000 - a slight improvement on its £473,000 loss the year before. No turnover figure was included in the abbreviated accounts.


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Cadbury Schweppes today announced it has secured $3.8 billion in financing to finally demerge its confectionary and US drinks arms, nearly a year to the day after the company first revealed plans to split the two groups.

The company is expecting to demerge its confectionary group and its beverages arm, which will be known as Dr Pepper Snapple Group (DPSG), on May 7 after a group of five banks agreed to fund the deal.

Immediately prior to the split, Cadbury Schweppes will have £3.2 billion in debt. After the split, Cadbury Plc, the confectionary business, will have £1.65 billion in debt which will be financed through its existing borrowing facilities.

JP Morgan Chase, Bank of America, Goldman Sachs Credit Partners, Morgan Stanley and UBS will provide $3.8 billion to DPSG, to ensure the division is awarded investment grade status that will allow it to raise $2 billion though a bond issue immediately after the split.

In total, the $3.8 billion funding package provided by the banks to DPSG includes $1.4 billion debt, $2 billion in bridge funding that will be refinanced through the bond issue and a $500 milllion credit facility which will immediately be reduced to $400 million by $100 million on DPSG's balance sheet.

Cadbury Schweppes will still pay out a final dividend to shareholders, but is sticking to plans not to make an additional return to shareholders.

In March last year, Cadbury Schweppes announced it was splitting the business in two with hopes it would sell off the US soft drinks business.

However, a sale became less likely as the credit crunch spread through global markets, scaring potential bidders, and their financiers away from making large acquisitions.

Subsequently in October, Cadbury Schweppes announce it would demerge the two groups.

A spokeswoman at Cadbury Schweppes denied that the company had experienced difficulties in raising finance for today’s deal because of the credit crunch.

Though she admitted that the company's own caution about the state of the credit markets had prompted it to secure definitive credit agreements from the five banks instead of the usual commitment letter, which state financiers' intention to lend to a company.

Cadbury Plc will be listed on the London Stock Exchange while DPSG will be listed in New York.


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