Insolvency News

1 May 2009

Record numbers of personal insolvencies points to a grim year ahead

Today’s announcement of 29,774 personal insolvencies (comprising 19,062 bankruptcies and 10,713 Individual Voluntary Arrangements) is a shock rise of 19% on the same quarter a year ago. A survey of the UK’s insolvency practitioners, expects a dramatic increase of 31% in personal insolvency by the end of 2009 compared with 2008. The survey, carried out for R3, by polling company ComRes gave a prediction of around 139,000 personal insolvencies for whole 2009 in England and Wales.

R3 President Peter Sargent comments: “Today’s figures show the start of major rises in personal insolvency, which insolvency practitioners, those on the front line, believe will rise quarter on quarter this year. We know personal debtors usually take up to six months to seek a statutory debt solution and by the end of 2009 the figures will reflect this lag.

We see cases of people seeking non-statutory debt solutions (such as a Debt Management Plan) or simply hanging-on, neither of which is a viable solution and this is reflected in today’s figures. The small increase in IVAs of only 11% is counterintuitive to rises in bankruptcy and perhaps indicates debtors’ affairs are in such a poor state they’ve gone straight to bankruptcy.”

The R3 survey also revealed that over 33% of insolvency practitioners have seen an increase in personal fraud and a similar rise in corporate fraud.*

“Personal and corporate fraud is always there, but pressure is driving more people to consider it but now they are more likely to get caught. The scrutiny of cost-cutting exercises or an actual insolvency will reveal the crime. Companies try over invoicing, and people avoid paying taxes naively thinking they won’t get caught. Then often when bankruptcy nears, individuals try and transfer assets to keep those assets out of the insolvency. Corporate and personal fraud spiral in desperate times.”

Company Voluntary Liquidations

Creditors Voluntary Liquidations (CVLs) are up by 62.9% on the same quarter in 2008. Peter Sargent, President of R3, the insolvency trade body explains: “A CVL is the insolvency mechanism by which company directors voluntarily wind up their own company. In good times it is generally used for companies which are no longer viable, for example due to advancing technology; or companies working on projects which have naturally come to an end. However, we believe that in this case there have been numerous company directors who have come into the New Year, looked at the gloomy economic outlook, and decided the best option is just to call it a day.”

Debt denial - two thirds of those with major financial problems are not seeking advice

09 April 2009

R3, the insolvency trade body, is concerned that those with financial problems do not think they ‘need’ debt advice, while those that do seek advice are not always going to the right places for it. Last month the OFT told 11 financial management businesses to close down websites that ‘looked like’ governmental or charity advice sites.

According to YouGov’s quarterly ‘DebtTracker’* undertaken in February 2009, only 37% of those who had ‘fallen behind with many bills or credit commitments’ (the highest levels of debt category in the survey) sought debt advice in the previous 6 months. 65% of all those struggling with bills and commitments who do not seek financial advice thought they did not ‘need’ advice on their financial problems.

“For anyone to say they do not need financial advice is troubling, but doubly so for those in financial difficulty. The only way to sort personal debt problems is to seek advice early, it’s as simple as that,” said R3’s President Nick O’Reilly. “Seeking professional advice does not mean you will immediately be declared bankrupt or have your credit cards taken away. People should not be afraid of that first step. Often it could just be about budgeting, but ultimately it will cost you less if you address these issues early.

“While it is good that the higher numbers of respondents are contacting recognised bodies such as the Citizens Advice Bureau (CAB), CCCS and National Debtline, more people should think of contacting a local licensed insolvency practitioner (IP). An IP has undergone a rigorous training programme and has to apply every year to renew their licence. The CAB cannot actually resolve your financial problems or perform the majority of statutory debt resolution procedures and may direct you back to an insolvency practitioner anyway. Over 80% of insolvency practitioners offer their first hour of advice free of charge.”

When seeking financial advice, 27% of respondents, the highest response for those who sought debt advice, contacted the CAB, 25% the CCCS and 15% the National Debtline. 9% contacted an ‘other advice centre’ who could be unregulated, while only 7% contacted an insolvency practitioner.

Getting what you pay for-top tips for buying a business

31 March 2009

Late summer is likely to see more than just the usual retail ‘summer sales’. R3, the trade body for insolvency practitioners believes that the recession will mean a significant increase in the number of businesses being sold this year, but warns those companies in a position to expand to be cautious when completing ‘distressed’ deals.

R3 President, Nick O’Reilly says: “Trends are going to change this year. We expect to see a big increase in the volume of businesses for sale at the end of the summer. By then we are likely to have a better idea of where the economy is heading, so companies who want to expand will be looking to buy. This is positive because it will go some way to preserve some businesses which are struggling, which will save and create jobs.”

“However we urge companies with the capacity to expand not to make impulse buys that they could later regret. Distressed deals are completely different from buying other businesses - things move more quickly, there is less due diligence and no warranties. Therefore buyers need to be well prepared and aware of the risks involved to increase the chances of a positive outcome.”

Nick O’Reilly has the following top ten tips for those planning an acquisition:

1. Use advisers who have previous experience of doing deals in these circumstances. Consider bringing an insolvency practitioner onto your team – their experience from the other side of the fence means they will understand the nature of the deal, and help guide you around possible pitfalls.

2. This team must be prepared to carry out an accelerated and extensive due-diligence exercise. This will help anticipate possible problems and lessen the chances of future problems arising from the deal.

3. If you are looking at buying assets from a struggling company try and wait until the insolvency practitioner is appointed. If it’s not possible, be aware that you could have to show that you have paid a fair price for them when the insolvency practitioner is appointed.

4. Find out if anyone has registered security over the company’s assets. If they have, you will need to obtain releases for any charges to which the sale may be subject. The releases have to be obtained directly from the charge holders, not the insolvency practitioner. Charges have to be registered with Companies House, so you can use the WebCheck function on the website to find out.

5. Be aware that assets may also be subject to a retention of title deeds which means that suppliers still own them until they are paid for. Ask the insolvency practitioner for copies of the suppliers’ terms and conditions to check this.

6. Ensure you have the funding in place - insolvency practitioners will want to move quickly and a cash deal is always more attractive than some form of deferred arrangement.

7. Be aware that more and more contracts with customers, suppliers and possibly landlords are beginning to include an automatic termination clause in the event of insolvency. Find out from the insolvency practitioner which contracts will be continuing, and how.

8. Check whether the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) applies, even if you are only buying assets. If the sale amounts to a transfer of a qualifying, discrete business unit, with machinery and stock which is going to continue to be used then it could. TUPE ensures that employees’ existing contracts are transferred which will have implications if redundancies are going to be needed.

9. You will need a good management team, and one with the skills to integrate the distressed business - although bear in mind this is likely to take twice as long as you had anticipated.

10. Incorporate the new business to ringfence the assets and make sure that if things don’t work out it doesn’t threaten your existing business.

Fair Pint and FSB campaign to lift the Pub Company tie

The Fair Pint Campaign and the Federation of Small Businesses (FSB) are launching a national campaign to push for government action to refer the unfair tie between the country’s pubs and the Pub Companies that own them to the Competition Commission.

The tie means that as well as paying rent, tenants are forced to buy beer and often other products, from the company that owns their pubs at prices which are much higher than the same products on the open market.

The Business and Enterprise Select Committee report on Pub Companies, published in mid May, was highly critical of the way in which pub companies run their business, questioning the fairness of the relationship between pub companies and their tenants.

The report concluded that the tie was making it difficult for landlords to make a living, with 67% earning less than £15,000 from their pubs despite in many cases having a turnover in excess of £500,000. The report also showed that the tie raised the cost of beer for consumers and reduced choice. It recommended that the Government refer the tie to the Competition Commission and that it takes action to increase the fairness of the relationship between publicans and their landlords.

The Fair Pint Campaign and the FSB will call on their members to take action and send letters to their MPs expressing their concern about the Pub Company tie and demand that it be lifted.

The campaign specifically asks the Government to:
- Refer the Pub Company tie to the Competition Commission
- Introduce a statutory code of practice to improve fairness in the relationship between the companies that own pubs and the tenants who run them

Steve Corbett, a tied tenant and founder member of Fair Pint said:

“The Business and Enterprise Select Committee has exposed the unfairness of the tie. Their report made it clear that tied arrangements are not fair and the high cost of beer combined with high rents means that publicans are struggling to earn even the equivalent of the national minimum wage from their pubs.

“If we are going to secure the future of pubs in the UK it is important that the Government takes action to respond to the recommendations of the Select Committee by referring the tie to the Competition Commission and by introducing a statutory code of practice to improve the fairness of the relationship between lessees and the pub owners.

“We are delighted to be working with the FSB on this national campaign to persuade publicans and all those who care about the future of the British pub to write to their MP asking them to put pressure on Lord Mandelson to adopt the recommendations of the Select Committee report.”

Clive Davenport, Federation of Small Businesses Trade and Industry Chairman, said:

“With 40 pubs closing every week, it’s time the Government took urgent action to stop the trend. The Government must listen to the concerns the Select Committee report raised about Pub Companies, and listen to the voices of the country’s publicans, who are telling them the tie is unfair.

“The single biggest reason for this dramatic rate of pub closures is the tie; there is enough evidence available to prove this. Britain is on the brink of losing its traditional community hub – the British pub – and it is time for action.

“The FSB has been campaigning on this issue on behalf of its publican members since 2004, and it’s time we saw a change.”

Ends

Notes for Editors
Fair Pint is an independent campaign group which is calling for an end to tied relationships between publicans and the companies that own their pubs. More information can be found on the Fair Pint website www.fairpint.org.uk

The FSB is the UK's leading business organisation with over 215,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at http://www.fsb.org.uk.

The Business and Enterprise Select Committee’s report Pub Companies was published on the 13th of May. The Committee’s press release on their report can be read here

The report can be downloaded from here

Contacts

Andrew Smith
Fair Pint
Telephone: 020 7592 9592
Mobile: 07833 093 275
Website: www.fairpint.org.uk

Federation of Small Businesses
Website: www.fsb.org.uk

Sophie Kummer
Senior Press Officer
Telephone: 020 7592 8128
Mobile: 07917 628 998

Prue Watson
Press Officer
Telephone: 020 7592 8121
Mobile: 07825 125 695

FSB News Release

PR 2009 49

Issue date: Thursday 27 August 2009

Government must abolish the Pub Company tie to save Britain’s pubs

One in eight tied pubs are struggling to survive, hit hard by inflated prices of beer imposed on them by the Pub Company (Pubco) that owns them, according to a new report by the Federation of Small Businesses (FSB).

In a survey of the FSB’s publican members, one in eight said they are paying up to 50 per cent or more for beer compared to untied pub owners who buy their products on the open market. They are then forced to pass these inflated charges to the customer to make ends meet. Another 85 per cent said that high beer prices imposed on them by the Pubco is a problem for their business and nearly three quarters (73 per cent) said they would support a complete removal of the tie.

The FSB believes the tie is the principle reason for over 50 pub closures a week and is urging the Government to take action now to save the country’s tied pubs.

Over the past year, 2,377 pubs have closed; now at least seven close every day. Pub closures not only affect the tenants and their families, but the wider community – more than 600,000 people rely on their local pub for employment, yet over the past year 24,000 people have lost their jobs due to closing pubs.

Tenanted pubs have been struggling with high rents and hikes in the price of alcohol, enforced on them by the Pubco. In the survey, 87 per cent of tenants said that the tie is a problem for their business and nearly 80 per cent of tenants said that the transparency in rent reviews is an issue.

The FSB urges the Government to take the following actions to ensure tenants are given a chance to make a fair profit:

• Abolish the tie where it does not give tenants the opportunity to make a fair profit;
• Create an independent Ombudsman who will support and advise tenants in conflict with their Pubco that cannot be resolved; and
• Enforce fully transparent rent reviews through a statutory code.

Clive Davenport, Trade and Industry Chairman, Federation of Small Businesses, said:

“Tenanted pubs are being crippled by high beer prices: one in eight tenants are paying 50 per cent or more for their beer because of the inflated prices imposed on them by the Pubco. This then has to be passed onto the customer for the pub to survive. Three quarters of tied tenants said they would support a complete removal of the tie, so we must see change. The tie must be abolished.

“Pubs are closing at a rapid rate and if action is not taken now, the great British pub will become extinct – leaving the next generation unable to visit a traditional pub. The dramatic number of pub closures is not only affecting the tenants and their families, but the wider community - 24,000 people lost their jobs over the past year.

“Tenanted pubs are not being given a fair deal from the Pubcos that own them: nearly one in six say they do not receive enough business support and a further seven out of ten are left to their own devices once the contract has been signed. The FSB is calling on the Government to introduce an independent ombudsman and a statutory code to ensure transparency at rent reviews. Without urgent action, we could see the pubs at the heart of our communities disappear forever.”

ENDS

Notes to Editors

1. The FSB is the UK's leading business organisation with over 215,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at http://www.fsb.org.uk.

2. To view the policy document please email prue.watson@fsb.org.uk

3. In May 2009 the Business and Enterprise Select Committee published a report into the relationship between tenanted pubs and the Pubcos that own them and revealed that around 67 per cent of managers of tenanted pubs with a turnover of half a million earn £15,000 – which amounts to less than the average wage.

Contacts

Stephen Alambritis: 020 7592 8112 / 07788 422155
Sophie Kummer: 020 7592 8128 / 07917628998
Prue Watson 020 7592 8121 / 07825 125695
Marc Shoffman 020 7592 8113 / 07595 067068

For regional FSB contacts please go to www.fsb.org.uk/regions

FSB News Release

PR 2009 50

Issue date: Wednesday 02 September 2009

Small firms now waiting up to four months to be paid, FSB reveals

Small firms are waiting up to four months for invoices to be paid by several big brand names, Federation of Small Businesses (FSB) research has revealed.

Around 4,000 business failures were caused by late payments last year and one in three FSB members are waiting longer to be paid during the credit crunch.

A number of small businesses have contacted the FSB over the last year naming several large companies extending their payment times:
• Delivery firm TNT, food producer Bernard Matthews, and catering company the Compass Group have all told small firms to wait 60 days for invoices to be paid;
• Builders firm Jewson has done the same and is also charging a ten per cent settlement fee as a discount for paying within the 60 day period
• Shopping website Amazon has also extended its payment terms to 90 days with a two per cent settlement fee if paid in that time or 120 days without one;
• Courier company DHL is now charging three per cent for paying invoices on time; and
• Brewer Carlsberg has also changed its payment terms to 95 days from the end of the month of invoice, which could leave a small business owner waiting a total of 135 days for a bill to be paid

The FSB has written to these companies to explain how badly late payment affects the cash-flow of small firms, particularly during this economic period, and is urging them to sign up to the Government-backed Prompt Payment Code.

The FSB is urging businesses and agencies in both the public and private sector to sign up to the Prompt Payment Code to highlight best practice and help boost the cash-flow of small firms during these tough times. The FSB is also calling for Companies House to be given the power to name, shame and fine late payers and is calling on the Government to take on board a measure recently announced by the Scottish Government –a new clause requiring timely payment to sub-contractors working on Government projects.

The FSB will be discussing this issue at an economic summit attended by politicians and business representatives in London on September 2 aiming to change the damaging culture of late payments.

John Wright, National Chairman, Federation of Small Businesses, said:

“Poor payment practices in both the public and private sector can drastically affect cash-flow for small firms at a time when business owners are doing their best to hold on to precious funds.

“This summit will put forward proposals on support for small businesses during the recession. Larger organisations must be given a loud and clear message that they must stop using the recession as an excuse to use small firms as source of credit. The FSB would like to see as many private and public sector organisations as possible signed up to the Prompt Payment Code to ensure we can put an end to this plague and change the culture of late payments for good.”

Ends

Notes to Editors

2. Research from the Department for Business Innovation and Skills shows that 4,000 business failures in 2008 were caused by late payment.

3. Research by credit agency Intrum Justitia places UK businesses amongst the top ten of countries of late payers costing the economy 2.5 per cent of GDP.

4. The Scottish Government’s announcement can be read here,

http://www.scotland.gov.uk

/News/Releases/2009/06/19131609

Contacts

Stephen Alambritis: 020 7592 8112 / 07788 422155
Sophie Kummer: 020 7592 8128 / 07917628998
Prue Watson 020 7592 8121 / 07825 125695
Marc Shoffman 020 7592 8113 / 07595 067068

For regional FSB contacts please go to www.fsb.org.uk/regions

FSB News Release
PR 2009 52

EMBARGOED: 00.01 Tuesday 15 September 2009

The job centre isn’t working: reform Jobcentre Plus to tackle unemployment, FSB says
FSB takes job centre exhibition to all three Party Political Conferences

The Jobcentre Plus must be urgently reformed and equipped to tackle rising unemployment, said the Federation of Small Businesses (FSB), following research showing one in three small businesses find Jobcentre Plus ineffective.
According to a survey of 2,500 FSB members, 34 per cent said they found Jobcentre Plus ‘ineffective’ or ‘very ineffective’, while another 49 per cent did not even know if it worked well or not.
With unemployment set to rise to three million by the end of the year, and the number of under-25s on job seekers’ allowance having risen by 80 per cent in the past year, it is clear that urgent action is needed.
In another FSB survey, nine per cent of respondents said they planned to take on more staff in the next six months, despite the recession – which would amount to more than 400,000 new jobs. It is well known that small firms are the country’s job-creators, with 84 per cent of new jobs across the EU created by small businesses between 2002 and 2007.
A new FSB report, entitled The job centre is not working, sets out recommendations for reforming Jobcentre Plus from an organisation that appears focused on processing benefits applications to one that supports work. Fewer than 20 per cent of small businesses said they used Jobcentre Plus to recruit, using instead costly advertising and recruitment services. On the 100 year anniversary of the establishment of the job centre, the FSB proposes the Government:
- Establishes links between Jobcentre Plus, Businesslink and skills boards, to create a focus on business needs and the skills needed for local employment;
- Appoints a dedicated small business manager in each Jobcentre, who understands the specific circumstances and needs of small firms;
- Commissions research to examine how funding allocated to unemployment, training and business support initiatives is spent;
- Overhauls the Jobcentre Plus website, to make it fit for 21st century online recruitment.
The FSB’s report is released ahead of the Liberal Democrat, Labour and Conservative party conferences over the coming weeks, at which the FSB will have a stand in the form of an employment centre, with a focus on small businesses – the country’s big employers.
John Wright, National Chairman, Federation of Small Businesses, said:
“FSB members feel let down by a service which appears to offer them precious little for the £3.36 billion Jobcentre Plus spends each year. As small businesses are the country’s key employers, and are known to give a larger proportion of jobs to those who have previously been unemployed than big businesses, it’s time the Government reformed Jobcentre Plus and made it work effectively. The FSB is concerned the lion’s share of funding from Jobcentre Plus currently goes to large companies and multinationals, which would still provide training if public funding were not available.
“Small businesses are big employers, and with 57 per cent without employees keen to employ people in the future, they must be given all the support they need to create jobs, and so effectively tackle the problem of rising unemployment head-on.”
ENDS
Notes to Editors

2. For a copy of the report, The job centre is not working, please email sophie.kummer@fsb.org.uk

3. The number of under-25s on job seekers’ allowance having risen by 80 per cent in the past year:

http://www.princes-trust.org.uk/about

4. 84 per cent of new jobs across the EU were created by small businesses between 2002 and 2007:
5. The job centre is 100 years old this month. An Act of Parliament established the then Labour Exchange in September 1909.

Contacts

Stephen Alambritis: 020 7592 8112 / 07788 422155
Sophie Kummer: 020 7592 8128 / 07917628998
Prue Watson 020 7592 8121 / 07825 125695
Marc Shoffman 020 7592 8113 / 07595 067068
For regional FSB contacts please go to www.fsb.org.uk/regions

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Tenable Solutions Limited, Unit 3 Thornes Office Park, Monckton Road, Wakefield, West Yorkshire WF2 7AN Tel: 0844 855 0 225 Fax: 0844 855 0 229 > Email Us <	Insolvency News 1 May 2009 Record numbers of personal insolvencies points to a grim year ahead Today’s announcement of 29,774 personal insolvencies (comprising 19,062 bankruptcies and 10,713 Individual Voluntary Arrangements) is a shock rise of 19% on the same quarter a year ago. A survey of the UK’s insolvency practitioners, expects a dramatic increase of 31% in personal insolvency by the end of 2009 compared with 2008. The survey, carried out for R3, by polling company ComRes gave a prediction of around 139,000 personal insolvencies for whole 2009 in England and Wales. R3 President Peter Sargent comments: “Today’s figures show the start of major rises in personal insolvency, which insolvency practitioners, those on the front line, believe will rise quarter on quarter this year. We know personal debtors usually take up to six months to seek a statutory debt solution and by the end of 2009 the figures will reflect this lag. We see cases of people seeking non-statutory debt solutions (such as a Debt Management Plan) or simply hanging-on, neither of which is a viable solution and this is reflected in today’s figures. The small increase in IVAs of only 11% is counterintuitive to rises in bankruptcy and perhaps indicates debtors’ affairs are in such a poor state they’ve gone straight to bankruptcy.” The R3 survey also revealed that over 33% of insolvency practitioners have seen an increase in personal fraud and a similar rise in corporate fraud.* “Personal and corporate fraud is always there, but pressure is driving more people to consider it but now they are more likely to get caught. The scrutiny of cost-cutting exercises or an actual insolvency will reveal the crime. Companies try over invoicing, and people avoid paying taxes naively thinking they won’t get caught. Then often when bankruptcy nears, individuals try and transfer assets to keep those assets out of the insolvency. Corporate and personal fraud spiral in desperate times.” Company Voluntary Liquidations Creditors Voluntary Liquidations (CVLs) are up by 62.9% on the same quarter in 2008. Peter Sargent, President of R3, the insolvency trade body explains: “A CVL is the insolvency mechanism by which company directors voluntarily wind up their own company. In good times it is generally used for companies which are no longer viable, for example due to advancing technology; or companies working on projects which have naturally come to an end. However, we believe that in this case there have been numerous company directors who have come into the New Year, looked at the gloomy economic outlook, and decided the best option is just to call it a day.” Debt denial - two thirds of those with major financial problems are not seeking advice 09 April 2009 R3, the insolvency trade body, is concerned that those with financial problems do not think they ‘need’ debt advice, while those that do seek advice are not always going to the right places for it. Last month the OFT told 11 financial management businesses to close down websites that ‘looked like’ governmental or charity advice sites. According to YouGov’s quarterly ‘DebtTracker’* undertaken in February 2009, only 37% of those who had ‘fallen behind with many bills or credit commitments’ (the highest levels of debt category in the survey) sought debt advice in the previous 6 months. 65% of all those struggling with bills and commitments who do not seek financial advice thought they did not ‘need’ advice on their financial problems. “For anyone to say they do not need financial advice is troubling, but doubly so for those in financial difficulty. The only way to sort personal debt problems is to seek advice early, it’s as simple as that,” said R3’s President Nick O’Reilly. “Seeking professional advice does not mean you will immediately be declared bankrupt or have your credit cards taken away. People should not be afraid of that first step. Often it could just be about budgeting, but ultimately it will cost you less if you address these issues early. “While it is good that the higher numbers of respondents are contacting recognised bodies such as the Citizens Advice Bureau (CAB), CCCS and National Debtline, more people should think of contacting a local licensed insolvency practitioner (IP). An IP has undergone a rigorous training programme and has to apply every year to renew their licence. The CAB cannot actually resolve your financial problems or perform the majority of statutory debt resolution procedures and may direct you back to an insolvency practitioner anyway. Over 80% of insolvency practitioners offer their first hour of advice free of charge.” When seeking financial advice, 27% of respondents, the highest response for those who sought debt advice, contacted the CAB, 25% the CCCS and 15% the National Debtline. 9% contacted an ‘other advice centre’ who could be unregulated, while only 7% contacted an insolvency practitioner. Getting what you pay for-top tips for buying a business 31 March 2009 Late summer is likely to see more than just the usual retail ‘summer sales’. R3, the trade body for insolvency practitioners believes that the recession will mean a significant increase in the number of businesses being sold this year, but warns those companies in a position to expand to be cautious when completing ‘distressed’ deals. R3 President, Nick O’Reilly says: “Trends are going to change this year. We expect to see a big increase in the volume of businesses for sale at the end of the summer. By then we are likely to have a better idea of where the economy is heading, so companies who want to expand will be looking to buy. This is positive because it will go some way to preserve some businesses which are struggling, which will save and create jobs.” “However we urge companies with the capacity to expand not to make impulse buys that they could later regret. Distressed deals are completely different from buying other businesses - things move more quickly, there is less due diligence and no warranties. Therefore buyers need to be well prepared and aware of the risks involved to increase the chances of a positive outcome.” Nick O’Reilly has the following top ten tips for those planning an acquisition: 1. Use advisers who have previous experience of doing deals in these circumstances. Consider bringing an insolvency practitioner onto your team – their experience from the other side of the fence means they will understand the nature of the deal, and help guide you around possible pitfalls. 2. This team must be prepared to carry out an accelerated and extensive due-diligence exercise. This will help anticipate possible problems and lessen the chances of future problems arising from the deal. 3. If you are looking at buying assets from a struggling company try and wait until the insolvency practitioner is appointed. If it’s not possible, be aware that you could have to show that you have paid a fair price for them when the insolvency practitioner is appointed. 4. Find out if anyone has registered security over the company’s assets. If they have, you will need to obtain releases for any charges to which the sale may be subject. The releases have to be obtained directly from the charge holders, not the insolvency practitioner. Charges have to be registered with Companies House, so you can use the WebCheck function on the website to find out. 5. Be aware that assets may also be subject to a retention of title deeds which means that suppliers still own them until they are paid for. Ask the insolvency practitioner for copies of the suppliers’ terms and conditions to check this. 6. Ensure you have the funding in place - insolvency practitioners will want to move quickly and a cash deal is always more attractive than some form of deferred arrangement. 7. Be aware that more and more contracts with customers, suppliers and possibly landlords are beginning to include an automatic termination clause in the event of insolvency. Find out from the insolvency practitioner which contracts will be continuing, and how. 8. Check whether the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) applies, even if you are only buying assets. If the sale amounts to a transfer of a qualifying, discrete business unit, with machinery and stock which is going to continue to be used then it could. TUPE ensures that employees’ existing contracts are transferred which will have implications if redundancies are going to be needed. 9. You will need a good management team, and one with the skills to integrate the distressed business - although bear in mind this is likely to take twice as long as you had anticipated. 10. Incorporate the new business to ringfence the assets and make sure that if things don’t work out it doesn’t threaten your existing business. Fair Pint and FSB campaign to lift the Pub Company tie The Fair Pint Campaign and the Federation of Small Businesses (FSB) are launching a national campaign to push for government action to refer the unfair tie between the country’s pubs and the Pub Companies that own them to the Competition Commission. The tie means that as well as paying rent, tenants are forced to buy beer and often other products, from the company that owns their pubs at prices which are much higher than the same products on the open market. The Business and Enterprise Select Committee report on Pub Companies, published in mid May, was highly critical of the way in which pub companies run their business, questioning the fairness of the relationship between pub companies and their tenants. The report concluded that the tie was making it difficult for landlords to make a living, with 67% earning less than £15,000 from their pubs despite in many cases having a turnover in excess of £500,000. The report also showed that the tie raised the cost of beer for consumers and reduced choice. It recommended that the Government refer the tie to the Competition Commission and that it takes action to increase the fairness of the relationship between publicans and their landlords. The Fair Pint Campaign and the FSB will call on their members to take action and send letters to their MPs expressing their concern about the Pub Company tie and demand that it be lifted. The campaign specifically asks the Government to: - Refer the Pub Company tie to the Competition Commission - Introduce a statutory code of practice to improve fairness in the relationship between the companies that own pubs and the tenants who run them Steve Corbett, a tied tenant and founder member of Fair Pint said: “The Business and Enterprise Select Committee has exposed the unfairness of the tie. Their report made it clear that tied arrangements are not fair and the high cost of beer combined with high rents means that publicans are struggling to earn even the equivalent of the national minimum wage from their pubs. “If we are going to secure the future of pubs in the UK it is important that the Government takes action to respond to the recommendations of the Select Committee by referring the tie to the Competition Commission and by introducing a statutory code of practice to improve the fairness of the relationship between lessees and the pub owners. “We are delighted to be working with the FSB on this national campaign to persuade publicans and all those who care about the future of the British pub to write to their MP asking them to put pressure on Lord Mandelson to adopt the recommendations of the Select Committee report.” Clive Davenport, Federation of Small Businesses Trade and Industry Chairman, said: “With 40 pubs closing every week, it’s time the Government took urgent action to stop the trend. The Government must listen to the concerns the Select Committee report raised about Pub Companies, and listen to the voices of the country’s publicans, who are telling them the tie is unfair. “The single biggest reason for this dramatic rate of pub closures is the tie; there is enough evidence available to prove this. Britain is on the brink of losing its traditional community hub – the British pub – and it is time for action. “The FSB has been campaigning on this issue on behalf of its publican members since 2004, and it’s time we saw a change.” Ends Notes for Editors Fair Pint is an independent campaign group which is calling for an end to tied relationships between publicans and the companies that own their pubs. More information can be found on the Fair Pint website www.fairpint.org.uk The FSB is the UK's leading business organisation with over 215,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at http://www.fsb.org.uk. The Business and Enterprise Select Committee’s report Pub Companies was published on the 13th of May. The Committee’s press release on their report can be read here The report can be downloaded from here Contacts Andrew Smith Fair Pint Telephone: 020 7592 9592 Mobile: 07833 093 275 Website: www.fairpint.org.uk Federation of Small Businesses Website: www.fsb.org.uk Sophie Kummer Senior Press Officer Telephone: 020 7592 8128 Mobile: 07917 628 998 Prue Watson Press Officer Telephone: 020 7592 8121 Mobile: 07825 125 695 FSB News Release PR 2009 49 Issue date: Thursday 27 August 2009 Government must abolish the Pub Company tie to save Britain’s pubs One in eight tied pubs are struggling to survive, hit hard by inflated prices of beer imposed on them by the Pub Company (Pubco) that owns them, according to a new report by the Federation of Small Businesses (FSB). In a survey of the FSB’s publican members, one in eight said they are paying up to 50 per cent or more for beer compared to untied pub owners who buy their products on the open market. They are then forced to pass these inflated charges to the customer to make ends meet. Another 85 per cent said that high beer prices imposed on them by the Pubco is a problem for their business and nearly three quarters (73 per cent) said they would support a complete removal of the tie. The FSB believes the tie is the principle reason for over 50 pub closures a week and is urging the Government to take action now to save the country’s tied pubs. Over the past year, 2,377 pubs have closed; now at least seven close every day. Pub closures not only affect the tenants and their families, but the wider community – more than 600,000 people rely on their local pub for employment, yet over the past year 24,000 people have lost their jobs due to closing pubs. Tenanted pubs have been struggling with high rents and hikes in the price of alcohol, enforced on them by the Pubco. In the survey, 87 per cent of tenants said that the tie is a problem for their business and nearly 80 per cent of tenants said that the transparency in rent reviews is an issue. The FSB urges the Government to take the following actions to ensure tenants are given a chance to make a fair profit: • Abolish the tie where it does not give tenants the opportunity to make a fair profit; • Create an independent Ombudsman who will support and advise tenants in conflict with their Pubco that cannot be resolved; and • Enforce fully transparent rent reviews through a statutory code. Clive Davenport, Trade and Industry Chairman, Federation of Small Businesses, said: “Tenanted pubs are being crippled by high beer prices: one in eight tenants are paying 50 per cent or more for their beer because of the inflated prices imposed on them by the Pubco. This then has to be passed onto the customer for the pub to survive. Three quarters of tied tenants said they would support a complete removal of the tie, so we must see change. The tie must be abolished. “Pubs are closing at a rapid rate and if action is not taken now, the great British pub will become extinct – leaving the next generation unable to visit a traditional pub. The dramatic number of pub closures is not only affecting the tenants and their families, but the wider community - 24,000 people lost their jobs over the past year. “Tenanted pubs are not being given a fair deal from the Pubcos that own them: nearly one in six say they do not receive enough business support and a further seven out of ten are left to their own devices once the contract has been signed. The FSB is calling on the Government to introduce an independent ombudsman and a statutory code to ensure transparency at rent reviews. Without urgent action, we could see the pubs at the heart of our communities disappear forever.” ENDS Notes to Editors 1. The FSB is the UK's leading business organisation with over 215,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at http://www.fsb.org.uk. 2. To view the policy document please email prue.watson@fsb.org.uk 3. In May 2009 the Business and Enterprise Select Committee published a report into the relationship between tenanted pubs and the Pubcos that own them and revealed that around 67 per cent of managers of tenanted pubs with a turnover of half a million earn £15,000 – which amounts to less than the average wage. Contacts Stephen Alambritis: 020 7592 8112 / 07788 422155 Sophie Kummer: 020 7592 8128 / 07917628998 Prue Watson 020 7592 8121 / 07825 125695 Marc Shoffman 020 7592 8113 / 07595 067068 For regional FSB contacts please go to www.fsb.org.uk/regions FSB News Release PR 2009 50 Issue date: Wednesday 02 September 2009 Small firms now waiting up to four months to be paid, FSB reveals Small firms are waiting up to four months for invoices to be paid by several big brand names, Federation of Small Businesses (FSB) research has revealed. Around 4,000 business failures were caused by late payments last year and one in three FSB members are waiting longer to be paid during the credit crunch. A number of small businesses have contacted the FSB over the last year naming several large companies extending their payment times: • Delivery firm TNT, food producer Bernard Matthews, and catering company the Compass Group have all told small firms to wait 60 days for invoices to be paid; • Builders firm Jewson has done the same and is also charging a ten per cent settlement fee as a discount for paying within the 60 day period • Shopping website Amazon has also extended its payment terms to 90 days with a two per cent settlement fee if paid in that time or 120 days without one; • Courier company DHL is now charging three per cent for paying invoices on time; and • Brewer Carlsberg has also changed its payment terms to 95 days from the end of the month of invoice, which could leave a small business owner waiting a total of 135 days for a bill to be paid The FSB has written to these companies to explain how badly late payment affects the cash-flow of small firms, particularly during this economic period, and is urging them to sign up to the Government-backed Prompt Payment Code. The FSB is urging businesses and agencies in both the public and private sector to sign up to the Prompt Payment Code to highlight best practice and help boost the cash-flow of small firms during these tough times. The FSB is also calling for Companies House to be given the power to name, shame and fine late payers and is calling on the Government to take on board a measure recently announced by the Scottish Government –a new clause requiring timely payment to sub-contractors working on Government projects. The FSB will be discussing this issue at an economic summit attended by politicians and business representatives in London on September 2 aiming to change the damaging culture of late payments. John Wright, National Chairman, Federation of Small Businesses, said: “Poor payment practices in both the public and private sector can drastically affect cash-flow for small firms at a time when business owners are doing their best to hold on to precious funds. “This summit will put forward proposals on support for small businesses during the recession. Larger organisations must be given a loud and clear message that they must stop using the recession as an excuse to use small firms as source of credit. The FSB would like to see as many private and public sector organisations as possible signed up to the Prompt Payment Code to ensure we can put an end to this plague and change the culture of late payments for good.” Ends Notes to Editors 1. The FSB is the UK's leading business organisation with over 215,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at http://www.fsb.org.uk. 2. Research from the Department for Business Innovation and Skills shows that 4,000 business failures in 2008 were caused by late payment. 3. Research by credit agency Intrum Justitia places UK businesses amongst the top ten of countries of late payers costing the economy 2.5 per cent of GDP. 4. The Scottish Government’s announcement can be read here, http://www.scotland.gov.uk /News/Releases/2009/06/19131609 Contacts Stephen Alambritis: 020 7592 8112 / 07788 422155 Sophie Kummer: 020 7592 8128 / 07917628998 Prue Watson 020 7592 8121 / 07825 125695 Marc Shoffman 020 7592 8113 / 07595 067068 For regional FSB contacts please go to www.fsb.org.uk/regions FSB News Release PR 2009 52 EMBARGOED: 00.01 Tuesday 15 September 2009 The job centre isn’t working: reform Jobcentre Plus to tackle unemployment, FSB says FSB takes job centre exhibition to all three Party Political Conferences The Jobcentre Plus must be urgently reformed and equipped to tackle rising unemployment, said the Federation of Small Businesses (FSB), following research showing one in three small businesses find Jobcentre Plus ineffective. According to a survey of 2,500 FSB members, 34 per cent said they found Jobcentre Plus ‘ineffective’ or ‘very ineffective’, while another 49 per cent did not even know if it worked well or not. With unemployment set to rise to three million by the end of the year, and the number of under-25s on job seekers’ allowance having risen by 80 per cent in the past year, it is clear that urgent action is needed. In another FSB survey, nine per cent of respondents said they planned to take on more staff in the next six months, despite the recession – which would amount to more than 400,000 new jobs. It is well known that small firms are the country’s job-creators, with 84 per cent of new jobs across the EU created by small businesses between 2002 and 2007. A new FSB report, entitled The job centre is not working, sets out recommendations for reforming Jobcentre Plus from an organisation that appears focused on processing benefits applications to one that supports work. Fewer than 20 per cent of small businesses said they used Jobcentre Plus to recruit, using instead costly advertising and recruitment services. On the 100 year anniversary of the establishment of the job centre, the FSB proposes the Government: - Establishes links between Jobcentre Plus, Businesslink and skills boards, to create a focus on business needs and the skills needed for local employment; - Appoints a dedicated small business manager in each Jobcentre, who understands the specific circumstances and needs of small firms; - Commissions research to examine how funding allocated to unemployment, training and business support initiatives is spent; - Overhauls the Jobcentre Plus website, to make it fit for 21st century online recruitment. The FSB’s report is released ahead of the Liberal Democrat, Labour and Conservative party conferences over the coming weeks, at which the FSB will have a stand in the form of an employment centre, with a focus on small businesses – the country’s big employers. John Wright, National Chairman, Federation of Small Businesses, said: “FSB members feel let down by a service which appears to offer them precious little for the £3.36 billion Jobcentre Plus spends each year. As small businesses are the country’s key employers, and are known to give a larger proportion of jobs to those who have previously been unemployed than big businesses, it’s time the Government reformed Jobcentre Plus and made it work effectively. The FSB is concerned the lion’s share of funding from Jobcentre Plus currently goes to large companies and multinationals, which would still provide training if public funding were not available. “Small businesses are big employers, and with 57 per cent without employees keen to employ people in the future, they must be given all the support they need to create jobs, and so effectively tackle the problem of rising unemployment head-on.” ENDS Notes to Editors 1. The FSB is the UK's leading business organisation with over 215,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at http://www.fsb.org.uk 2. For a copy of the report, The job centre is not working, please email sophie.kummer@fsb.org.uk 3. The number of under-25s on job seekers’ allowance having risen by 80 per cent in the past year: http://www.princes-trust.org.uk/about 4. 84 per cent of new jobs across the EU were created by small businesses between 2002 and 2007: 5. The job centre is 100 years old this month. An Act of Parliament established the then Labour Exchange in September 1909. Contacts Stephen Alambritis: 020 7592 8112 / 07788 422155 Sophie Kummer: 020 7592 8128 / 07917628998 Prue Watson 020 7592 8121 / 07825 125695 Marc Shoffman 020 7592 8113 / 07595 067068 For regional FSB contacts please go to www.fsb.org.uk/regions	Request a callback Name: Tel.: Email: Time: Share \|
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