Insolvency Service to tackle termination clauses

This week we have attached an article that is relevant to many of our clients. The issue of keeping suppliers on board when re-structuring is an important one, however suppliers who “blackmail” clients during these times need to be deterred from doing so. Whether a new  moratorium will be effective remains to be seen.

The Insolvency Service has confirmed that it will finally tackle termination clauses, under wider proposals to create a moratorium for firms which need debt restructuring.

Termination clauses, whereby suppliers can cancel vital contracts and therefore threaten a firm’s rescue plan, will be looked at as part of the Insolvency Service’s next stage of considering how to create a moratorium.

The Insolvency Service recently published responses from the profession to proposals for creating the moratorium.

The moratorium would provide viable businesses some breathing space, outside of a formal insolvency procedure, to restructure their debts successfully.

While publishing the industry’s response to the moratorium proposals, Edward Davey, the minister responsible for the insolvency regime, said: “There have been suggestions that a greater impact might be achieved by the restructuring moratorium were it also to tackle issues such as termination clauses.”

The minister also confirmed that responses suggested the moratorium could tackle “cram down” mechanisms, to reduce the power of small creditors to block proposals.

He added that there would be further talks with stakeholders to explore the level of support for addressing these issues and “the best way to do so.”

His comments follow a campaign led by the insolvency trade body R3 for a law change to stop suppliers threatening to cancel contracts, thereby preventing them from blackmailing insolvent firms which are trying to engineer a rescue plan.

R3 estimates that around 2,000 more businesses could be saved annually as a result of tackling these practices.

R3 president Frances Coulson said: “R3 has been campaigning vigorously on this issue as part of its Holding Rescue to Ransom campaign to stop suppliers taking unreasonable actions during an insolvency, thus sabotaging any potential rescue.”

The Insolvency Service, while providing a summary of responses to the moratorium plans, said the urgency of the case for introducing it was “not as great as previously thought.”

One of the key elements that will need to be refined is the powers and responsibility of who monitors the moratorium.

Both HSBC and Royal Bank of Scotland told the Insolvency Service that qualifying floating chargeholders should consent to the choice of monitor.

Views were split on whether to have an extra court hearing for the extension of a moratorium to cover the formal approval of a CVA proposal. The vast majority of respondents said the court should grant any extension of a moratorium.

Insolvency Service officials will now refine the moratorium proposals and consider in more detail the issues raised.

SMEs risk export losses through currency "knowledge gap"

A "knowledge gap" about protecting businesses from currency fluctuations means British SMEs risk losing thousands of pounds on export deals, a new report has warned.

The study by American Express FX International Payments showed that despite belief in an "export-led recovery" being generally strong in the UK, 23 per cent of companies are actually looking to pull back on their international trade due to worries over volatile exchange rates and red tape.

Over half (56 per cent) of those who are losing confidence in exports cite the sharp fluctuations in the euro as their biggest concern.

American Express said the UK's top export markets - Germany, Spain and Poland - all use the euro and, without safeguards against the risk of currency volatility, the 55 per cent of SMEs that trade internationally could lose thousands.

It added that a company with an exposure of €300,000 over three months starting in October 2010 could have saved £19,745 if it had purchased an incoming forward contract rather than taking the spot price for the euro in January 2011.

However, despite the potential losses, 55 per cent of SMEs do not use such protection and 28 per cent have never even considered it.

American Express FX International Payments general manager, Rocco Magno, said, "After a tempestuous year for currencies, it's not surprising that currency fluctuations are the number one concern for SMEs trading internationally.

"Worryingly, these fluctuations are not only affecting confidence, but also the bottom line for SMEs due to a knowledge gap on how businesses can protect themselves from these fluctuations."

Liverpool came too close to collapse, says UEFA official

Irrespective of your personal football leanings, this is an interesting turnaround story…

One of UEFA’s most senior officials has warned MPs that Liverpool Football Club came within hours of going into administration. William Gaillard, an adviser at UEFA, the governing body of football for Europe, told a parliamentary inquiry into the governance of English football that Liverpool was an example of why financial fair play rules have to be brought into the game.

Gaillard, one of UEFA president Michel Platini’s closest advisers, warned a committee of MPs that Liverpool had come perilously close to going under after Tom Hicks and George Gillett loaded it with debt, before the club was taken over by American firm New England Sports Ventures (NESV) company.

Gaillard said: “We’ve seen more than 80 clubs in Europe in 10 years going into administration.

“Leveraged buy-outs for many clubs end in disaster. Just take Liverpool where you have owners who came, contracted debt, bought out the previous owners and saddled the club with the debt.”

Gaillard told the inquiry that what brought Liverpool down was “two failed banks, one British, one American,” which had been nationalised. He added: “They suddenly found themselves being owned by two failed banks that had been taken over by governments – Royal Bank of Scotland by the British government and Wachovia by the US government.

"The club has now been rescued and thank God because it has tremendous heritage - but it was a close call."

UEFA's new rules are designed to force clubs to break even after an initial period of flexibility. They tighten up the access to the Champions League for clubs burdened with huge debts.

Gaillard cautioned against sudden massive investment by unpredictable and untrustworthy parties.

"We at UEFA feel if a person brings equity, that is much better sit than if he brings debt," he said.

Bars and restaurants top table of 'distressed' businesses

There was a 15% increase in financial distress across all business sectors in the first quarter of this year, according to a large business recovery firm. The firm's Red Flag Report shows a 70% year-on-year rise in the number of businesses in the bar and restaurant sector showing signs of distress. Some 60% more businesses in the professional services sector were in a similar position. The firm commented that sectors relying on discretionary consumer spending were "beginning to show the effects of anticipated job losses."

Redflag report reveals: 186,000 firms in financial distress

Just over 186,000 UK companies are experiencing significant or critical financial problems compared with around 161,000 in the first quarter of 2010, according to an Insolvency Firm.

The insolvency firm’s latest Red Flag Alert, published today, claims that a total of 186,554 firms are in financial distress, a 15 per cent rise from 161,601 businesses year on year.

The report also reveals how specific sectors are suffering: year on year, the number of businesses showing signs of distress is up by 68 per cent in the bar and restaurant sector; by 60 per cent in the leisure and culture sector and by 23 per cent in the sports and recreation sector.

Other sectors also experienced worsening condition from the last three months of 2010 into the first quarter of 2011.

The Red Flag Alert reveals that 25,031 businesses in the construction sector were facing significant or critical financial problems in the first quarter, a 31 per cent rise on 19,167 construction companies in trouble during the fourth quarter of 2010.

There was an 87 per cent rise in the number of professional services firms in difficulty, to a total of 15,526 in the first quarter, from 8,293 in the last three months of 2010.

There was also a 92 per cent rise in the number of bars and restaurants in financial distress, to 4,505 from 2,347 businesses in the fourth quarter of 2010.

The Executive Chairman of the insolvency firm, said: “The figures for the first quarter of 2011 show the number of UK companies facing ‘critical’ problems has risen year on year with significant increases across the leisure sector in particular.”

He emphasised that the sectors which rely almost entirely on consumer discretionay spending were suffering the most.

He added: “Compared with our figures for food retail which show little change, it seems likely that a fall in consumer confidence and spending power driven by anticipated job losses lies at the core of the leisure sector’s troubles.”

The Executive Chairman explained that another marked increase was evident in the professional services sector where the number of firms showing signs of distress was up by 61 per cent compared with the first quarter of 2010.

He added: “Over 15,000 firms in the professional services sector are showing signs of significant or critical problems - partly driven by a stale property and corporate deals market - often the drivers for an active professional services community.

“Compared with the first quarter of 2010 figure, of 9,620, it seems that firms which operate with a high fixed cost base are finding the current market conditions increasingly difficult as their revenues fail to recover and the scope for further cost reductions becomes more limited.

“High levels of legal actions taken against debtors indicate that creditors are attempting to maximise cash collection right across their customer base.”

UK Consumer Prices Index - February

Some good news this week…

There is no doubt that businesses continued to struggle through the early months of 2011, but the fall in inflation for February can bring some relief to us all. UK Consumer Prices Index annual rate of inflation has fallen to 4%, down from 4.4% in February.  The fact that inflation has fallen may at least buy the Bank more time before it has to see if the economy can walk on its own without the support of record low rates.

Private Investor Delivers Much Needed New Capital

Many business owners come to us with a similar tale - a history of profits, but two years of recession has weakened the balance sheet, and they've suffered. 2011 brings a renewed opportunity for growth, but how do they fund this? Can't rely on banks...they have their own issues and are struggling to lend to SME's in today's climate.

Beer & Young specialise in raising capital urgently for businesses which have a need for capital. Our network of private investors is unmatched in the UK. Investment from private investors can be the answer: it enables the business to secure its immediate future and gives it the funds necessary to plan for growth and profits.

There are solutions to the funding problems facing many UK businesses - we are pleased to highlight another success in 2011. The names have been changed to protect the innocent.

Beer & Young were engaged to raise funds for our client, Product Promotions Ltd.

Established in 2000, Product Promotions achieved continuous growth until the late Noughties, at their high point achieving sales of £5 million whilst delivering excellent returns for the directors/shareholders.

The recession hit our client hard with many blue chip customers reducing their spend, the result of which put our client into a loss making position. Having traded through this period - under some duress - they were unable to fund the numerous new sales opportunities that had arisen as their customer base returned.

Beer & Young generated considerable interest from potential investors. We are delighted to report that after the usual period of due diligence, one investor has injected £400,000 of new money into the company.

This investment has given PP a much needed boost to the working capital position and balance sheet. Their bankers can relax somewhat with over £500,000 of debt still to be serviced. The danger of looming business failure has now gone.

We wish both client and investor well for the future.

Private Equity and Business Insolvency

Nicholas Young, MD of turnaround specialists Beer & Young, noted with interest the comments in this week’s edition of insolvency news; 

“During one of the toughest times in living memory across the public sector, HM Revenue and Customs, Treasury and Insolvency Service staff have all privately told insolvencynews.com this week that the only option is to plough on regardless. The Insolvency Service's steep challenges were recently laid bare in a blunt address from a union boss, at a time when the organisation is seeing significant influence over its own affairs shift to the Treasury, as well as the Department for Business, Innovation and Skills”.  

These comments mirror our own experience at the present time. Rightly so HMRC are getting tougher with non-payers of tax, and whilst it is also more difficult to make 12 months + arrangement on the Time to Pay scheme, it also seems there is a reluctance by the Tax Offices to seek recovery actions through the courts for legacy debt particularly where the business in question is now paying current taxes on time.

Beer & Young Commended at Business Moneyfacts Awards

We are delighted to announce that Beer & Young has picked up the ‘Commended’ Award for ‘Best Corporate Finance Boutique’ at the Business Moneyfacts Awards ceremony held on 24th March at the London Marriott Hotel, Grosvenor Square.

The Business Moneyfacts event celebrated its 10th year and was attended by some 400 industry professionals.

 Lee Tillcock, Editor of Business Moneyfacts said “the ceremony has recognised those providers, brokers and trade bodies that helped to make 2010 a more positive year for businesses”

Government disagrees with itself on the impact of Business Link's closure, says enterprise group

Government research into the potential impact of the closure of Business Link suggests ministers will not meet their own objectives for effective business support, an enterprise group has suggested.

The national enterprise network, which represents local enterprise agencies, made the claim ahead of the winding down of local elements of government-backed Business Link services which will be replaced by the main national Business Link website and a call centre.

The group pointed to research commissioned by the Department for Business, Innovation and Skills in November 2010 which concluded: "A reduction in the availability of Business Link’s face to face service could result in a lower take-up of external advice, and confusion remains about which sources of advice to trust.

"Start-ups and new businesses will be particularly affected as they are the least likely to know what support they need, the least able to find or trust appropriate support and the least able and willing to pay for this support."

The study also found that for many entrepreneurs, the Business Link website complements, rather than substitutes for, telephone and face-to-face support, is not a key route to face to face support and is "barely looked at" by many company owners before getting in touch for advice.

All this, NFEA said, conflicts with the government's heavy focus on online support in the new system of business support. "Online business information is undoubtedly valuable but it appears that this is rarely regarded as a useful form of business support, other than in answering factual queries," the organisation added, "Nor is it seen as an adequate replacement for face to face advice.

"We appreciate that major changes to the website are planned, but this is a massive task and whilst it may improve the usability and relevance of the content, it will not remove its perception as a government-owned service, the use of which will benefit the government rather more than the business user."

NFEA also criticised the government's suggestion that "the best advice for business comes from other experienced business people". The group disputed this saying that while experience is important, qualified and professional business advisers offer the best guidance.

"The best musicians do not make the best music teachers, and vice versa," it added. "The best footballers do not make the best football coaches, and vice versa. And we would suggest that successful business people do not always make the best business advisers, nor will they necessarily make the best business mentors."

Concluding its list of concerns, the NFEA said it was worried that the abolition of the local Business Link service "will have a damaging effect on the rate of new businesses coming through, the quality of their management, the rate of their growth and ultimately their sustainability".

Article sourced from businesszone.co.uk

Corporate failures fall more than 10 per cent

The number of UK firms going bust dropped in January by more than 10 per cent when compared to the same month last year, according to Experian’s latest Insolvency Index.

The credit reference agency’s figures revealed that 1,266 businesses failed in January 2011, down from 1,426 during the same month in 2010.

Further findings from the research showed that businesses in the south west were among the most robust, with insolvencies in this region falling 11 per cent.

Wales and the north west were the only two regions to see an increase in the rate of business insolvencies when compared to the previous year, with a 33 percent rise in the north west and 56 per cent in Wales.

Max Firth, managing director of Experian pH, said: “Our analysis shows that business failure rates are falling steadily and the financial strength of the UK’s business community is improving.

“Our data also shows that the post-recession business population is beginning to increase once again, with the net number of firms trading up by one per cent when compared with last January.”

Nicholas Young, Managing Director at Beer & Young comments: “These figures are of course welcomed, particularly in light of the poor trading for the previous quarter for “UK plc”. However, whilst business failures are down, so many businesses are struggling with their finances. Balance sheets are weak and banks are themselves finding it difficult to lend to SME’s. Equity funding can be the answer. Private investors have capital available and bring added value skills with their money. They can be the difference between growth, profits and business growth, over struggle, firefighting and stress for business owners.”

Turnaround Funding Project

We are delighted to announce a successful completion of a turnaround funding project that encapsulates all the reasons why we operate in this market… >>>

New Year Case Study

The run up to Christmas is always very busy with many clients seeking to close out on funding before the break - inevitably almost all have to wait until January and even February before completion takes place. We have five such projects ranging from £75,000 to £2.5 million of investment, demonstrating the power of our investor network.


We can report that investor appetite for quality turnaround projects has never been higher. We are typically introducing clients to three, four and five different investors in short order, this gives our client maximum opportunity to obtain real offers of funding. Investors have private equity readily available and can add value to the business with their experience, contact base and ability to drive growth and profit. Below is a recent example of a project where we have been instrumental in saving the business, helping the directors raise capital in a matter of weeks.


Wholesale distributor, south east - case study:
Our client is a privately owned wholesaling distributor selling a variety of branded products to retail. despite a history of profitable trading (peaking to date at £14 million turnover with £1.5 million pre-tax profits) they were in danger of going under largely due to a single unforeseeable event. this loss of business together with the general effects of the recession and banking crisis left them with no capital with which to trade.


They were nevertheless a very sound business with much potential. We organised two meetings for them in quick order - one with a private equity group and the other with an entrepreneur. Both parties indicated they wanted to fund and buy into the company. (We had three more investors lined up should they have been needed.)


We are delighted that these investor offers gave the directors, our client, 'ammunition' and options when they confronted the other shareholders. Below is an unsolicited comment from the Finance Director.


"The funding will see us through our immediate difficulties and will allow us to exploit the opportunities we discussed as part of our review of expected activity in 2011, however, and not wishing to tempt providence, if things do not work out as planned I would hope that you would be willing to assist us again in future if necessary, as both the Managing Director and I were truly impressed with the manner and speed with which you were able to identify and put us together with suitable new investors, and the options this gave us were very much instrumental in focusing our shareholders and prompting them to reinvest, although I realise that this is perhaps not the best financial outcome for Beer & Young"


We Can Help So Give Us a Call…


Beer & Young specialise in raising capital urgently for businesses who are suffering cash pressures. Increasingly our clients find themselves under pressure from their key stakeholders, and even those generating profits are unable to unlock new working capital facilities from their banks. Investment from private investors can be the answer; it enables the business to secure its immediate future and gives it the funds necessary to plan for growth and profits.


If you know of a business that is experiencing financial pressures and has a need for capital, please talk to us. Our Investors are very active in today's market; businesses can be preserved and subsequently thrive - for the benefit of all stakeholders.


Nick Young – 0207 329 6886

Companies in critical condition owe £53bn

UK businesses with critical problems owe more than £52.7bn to creditors, suppliers and service providers, according to Begbies Traynor’s latest Red Flag Alert.

The study also shows that by the fourth quarter of 2010, 147,836 companies were experiencing ‘significant’ or ‘critical’ financial problems, a 20 per cent rise from 123,361 firms in the third quarter of last year.

The report also claims a 24 per cent increase in the number of companies in distress from the third quarter of last year, with more than 61,000 struggling companies exposed to public sector spending cuts by the end of 2010.

The alert also shows a 17 per cent rise to more than 10,000 struggling businesses in the retail sector, from the third to fourth quarter of 2010; while the wholesale sector experienced the largest rise in distress of 30 per cent.

Begbies’ Red Flag Alert measures corporate distress through a complex methodology, drawing on factual legal and financial data for companies trading for more than a year.

It monitors the number of struggling firms in two categories: significant problems and critical problems.

Companies with significant problems are those with either a court action and/or poor, insolvent or out of date accounts. Firms with critical problems are those with county court judgements totalling £5,000 or more and/or wind-up petition related actions.

The 3,018 companies experiencing critical financial problems alone owe £52.7bn to creditors, suppliers and service providers, which compares to £57.5bn owed by 2,943 companies in the third quarter of 2010. 

Ric Traynor, executive chairman of Begbies Traynor Group, said: “Today’s figures show that UK businesses are demonstrating real signs of distress and that trade creditors are both losing patience with their debtors and in need of collecting cash into their own businesses.

“Coming against a backdrop of the largest decline in house prices for a year, higher inflation, an accelerated decline in business confidence, and higher unemployment forecasted for 2011, these figures indicate the renewed challenges facing businesses across most industries in 2011.”

The Red Flag Alert shows that the sectors most exposed to public sector cuts, which comprise construction, IT, recruitment, advertising and business services, have seen a 24 per cent increase in financial distress to 61,534 in the fourth quarter of 2010.

Traynor said: “These figures demonstrate that the sectors most reliant on government spending are already feeling the impact of public sector cuts, confirming the financial effects of the recent contraction in the services and construction sectors.”

He added: “With the full implementation of budget cuts only starting to show through in these figures, public sector exposed sectors are likely to face significant increases in the level of corporate failures over the course of 2011.”

The retail sector saw a 17 per cent rise to 10,250 companies facing financial distress from 8,751 in the third quarter.

Traynor added: “The retail sector is seeing an increase in distress ahead of greater pressure on consumers’ disposable incomes from higher inflation, tax rises and job cuts.

“With recent evidence of falling house prices, we expect a combination of deteriorating consumer confidence and financial resources to result in an increase in business failures in the sectors most exposed to discretionary spending as we move through 2011.”

VAT rise will tighten screw on SMEs

Almost a third of small firms (30 per cent) will need extra funding to cope with the increase in VAT, according to research by British bank.

Some 35 per cent of small and medium-sized enterprises (SMEs) surveyed by the bank said that the VAT rise will strain their cashflow in 2011.

The bank said businesses usually have to pay VAT to HM Revenue & Customs before they have received payment from customers, meaning that the VAT rise will bite into their working capital, increasing the need for funding.

A spokesperson for the bank said: “The VAT rise will only add to the financial squeeze faced by many SMEs.

“A worryingly high percentage of SMEs say they will require additional funding but, with many of the big banks still reluctant to extend credit, the VAT rise could strain working capital to breaking point.”

The bank, which surveyed 292 SMEs for its study, stated that many firms are already being forced to wait months for bigger clients to pay invoices. The bank believes there is a risk that big businesses that buy services from small firms may try to mitigate the impact of the VAT rise by delaying the payment of invoices even longer. The VAT rise, therefore, may hit SMEs hardest.

Businesses will need to start paying their VAT bills at the new higher rate to HMRC at the end of February.

The spokesperson added: “Late payment of invoices is already a serious concern for many SMEs and the prime cause of their cashflow problems. The temptation for clients of SMEs to sit on invoices longer to shore up their own cashflow in response to the VAT rise will be difficult to resist.

“The public sector has made enormous efforts to keep payment days to its suppliers to an absolute minimum. Big businesses could do a lot more to alleviate pressure on their smaller suppliers by reducing the amount of time it takes to pay invoices.”

The bank says that the VAT rise comes at a time when many high street banks still have in place credit crunch era restrictions on lending – such as restrictions on unused overdraft facilities.

HMRC is also reported to have become more reluctant to allow businesses to roll over agreements to defer tax under its Time to Pay scheme.

The bank added: “The Time to Pay scheme has been a vital lifeline for struggling SMEs over the last two years but statistics suggest that HMRC has been refusing a slightly higher proportion of requests from businesses to defer tax payments.

“HMRC should consider whether its eligibility criteria for Time to Pay should temporarily be loosened in light of the VAT rise.”

Insolvency News this week… Business failures down 12 per cent

The level of UK business insolvencies fell more than 12 per cent for the whole of 2010 compared to 2009, as firms managed to survive the economic climate.

A report from business information provider and credit reference agency Equifax shows that corporate insolvencies decreased from 26,000 in 2009 to 23,000 in 2010.

The study also states that the level of corporate failures dropped 8.4 per cent year on year for the fourth quarter of 2010.

While the report paints a more positive picture for UK plc in 2011, it also reveals a 6.4 per cent rise in business failures during the last three months of 2010 compared to the third quarter.

Neil Munroe, external affairs director at Equifax, said: “What we have seen throughout 2010 is a steady drop in the number of organisations failing. Pay freezes and tight control on invoice payments were reported consistently throughout the year.”

He added: “It appears that there has been a clear focus on cost control and cash flow management which has aided survival.”

Equifax’s Business Failures Report also shows the regions that are recovering and those still struggling in the aftermath of the recession.

Scotland, for example, saw the highest increase in failures from the third to the fourth quarter of 2010 – at 32.9 per cent.

The level of business failures in London increased from 16 per cent, from 1,326 in the third quarter to 1,538 in the fourth, while the west Midlands also suffered, with insolvencies rising from 654 to 787 in the final three months of the year.

Equifax’s report attributes these rises to a number of companies being wound up at the end of their business year.

The regions that bucked the trend of quarterly rises were the east Midlands, with a 23.4 per cent drop quarter on quarter; the north west with a 7.6 per cent fall and the south west with a 2.1 per cent decrease.

Best Corporate Finance Boutique Award

2011 is off to a flying start with Beer & Young named as a finalist for the Business Moneyfacts, Best Corporate Finance Boutique award. 

The Business Moneyfacts awards ceremony will be held at the London Marriott Hotel in Grosvenor Square on Thursday 24^th March 2011.

Acquisition International

B&Y continue to enhance their reputation in the UK, regularly being asked for their expert views on the market place, most recently by Acquisition International who invited B&Y to discuss conditions in the UK, commenting “Beer & Young  is extremely well regarded in the insolvency and restructuring industry”

R3’s quarterly ‘Business Distress Index’ reveals almost 50% of UK businesses are experiencing falling profits

R3, the association for insolvency, business recovery and turnaround professionals has released their quarterly ‘Business Distress Index’ revealing 850,000 businesses are currently experiencing falling profits.

Decreased profits’ was identified as the most common cause of distress, experienced this quarter by nearly 50% of UK businesses. 44% of businesses (or 750,000) have seen a reduction in their sales volumes, whilst 32% have seen a recent fall in market share.

R3 President Steven Law commented:
“These signs of distress on their own do not suggest insolvency is inevitable but they should be observed over the longer term. It is worrying that the most common signs recorded in September this year are decreased profits and a reduction in sales volume, given we are now out of recession. Although corporate insolvency numbers have decreased over 2010, experience of past recessions tell us to expect them to continue rising as the recession finishes in an ‘insolvency lag’.

He said: “The UK’s insolvency practitioners are expecting corporate insolvency numbers to increase for 2011 to 27,500 (In 2009 the figure was 26,400).”

Owls given 28 days to fend off administration

Sheffield Wednesday have been given a 28-day stay of execution by a High Court Judge in order to find new owners and pay off their outstanding tax bill.

The club, best known as ‘The Owls’ had been facing a winding up petition from HM Revenue & Customs for £600,000, but the judge revealed in court that the figure had more than doubled to £1.4m due to interest, VAT and fines.

The judge confirmed that the Yorkshire football club, were currently insolvent, but had been granted the extension under exceptional circumstances.

Deputy prime minister and Sheffield MP Nick Clegg, who lobbied the tax authorities and the club’s bank to help win a reprieve, warned that Wednesday’s escape was “only a stay of execution and much more needs to be done.”

Wednesday had hoped to broker a deal before the court date with one of four suitors including Leicester chairman Milan Mandaric, but time ran out. The Co-Op Bank, the largest creditor with around £23m outstanding, was said to support the Mandaric offer, but current club chairman Howard Wilkinson has been critical of the offer.

Insolvency News reports on HM Revenue and Customs 'Time to Pay'

“HM Revenue and Customs has finally revealed just how many Time to Pay arrangements have been granted to struggling businesses since the start of the recession. The official figures show that a whopping 371,200 agreements, worth £6.8bn, have been agreed. Critics of the scheme have said that whilst it has prevented an Armageddon, it is simply delaying the inevitable wave of collapses that will occur once the measure is withdrawn – the very definition of the “extend and pretend” catchphrase.” 
For further reading - click here...

Insolvency & Rescue Awards 2010

For the team at Beer & Young, the Insolvency & Rescue Awards on 21^st October proved to be an evening of delight and jubilation with Beer & Young taking away the award for Business Rescue Funder of the Year (Broker/Equity).

The event, held at the Lancaster London saw almost 600 professionals from across the insolvency and rescue sectors enjoy a night of entertainment and festivities as industry winners took home awards. 

Managing Director Nick Young commented:

“We are very grateful to come out on top of our peer group in this key category. We are delighted to have been recognised as the major deliverer of equity funding to SMEs seeking working capital for their businesses.”

Beer & Young September Update

It has been a busy September at the Beer & Young offices. As usual we've seen an upswing in investment activity following the summer holiday season - investors are active and a number of projects are reaching a positive conclusion.

Tomorrow sees Nick Young spending his day locked in a committee room as one of the judges for the Insolvency & Rescue Awards 2010. Beer & Young has been nominated for two awards - sadly Nick has been barred from voting in these two categories, impartiality rules! The judging panel is made up of recognised industry figures who can bring their skills, experience, and knowledge of the turnaround market to bear on proceedings. Sworn to secrecy, the results will be anounced at the gala dinner on 21st October.

Manchester & North Cheshire Voice of Business

Manchester & North Cheshire Voice of Business had an article about the turnaround industry, which is shown here (Click for a better view):

It has Ian Ross of Beer & Young giving valuable advice to SME's (Small to Medium Enterprises)

Two Nominations for Beer and Young

We are delighted to announce Beer & Young has been short-listed for two awards at this year’s Insolvency and Rescue Awards.

Launched in 2008, The Insolvency and Rescue Awards is the biggest event in the insolvency and turnaround industry, where professional excellence and outstanding achievements are recognised.

Beer & Young is a finalist in the Business Rescue Funder of the Year – Broker / Equity category and Senior Associate, Michael Morley-Smith has been nominated for the ‘Turnaround Practitioner of the Year’ award.

Nick Young, Managing Director of Beer & Young will join the judging panel for these awards to be held on 21 October, though sadly he will not be judging the above categories!

For more information about the Insolvency and Rescue Awards visit Credit Today or the Insolvency and Rescue Awards website.

A WINNING COMBINATION SME BANKING RELATIONSHIP MANAGERS + BEER & YOUNG THE CATALYST FOR BUSINESS RECOVERY

We all need a little extra help sometimes, but where do SME’s turn when the going
gets tough and additional capital is needed to re-build their depleted balance sheet?
This is where Beer & Young can be the answer.

Since 1998 Beer & Young has been acting for undercapitalised SME’s who have
often reached a critical point in their banking relationship. Beer & Young is focused
on investor backed recovery solutions – the typical Beer & Young investor will be
an experienced ‘Business Angel’ willing to invest in a turnaround situation or simply
where urgent funding is required.

Beer & Young is delighted to have forged close working relationships with many
relationship managers across the banking community. Some, but not all, operate
within the business support/special situations departments of the bank. The common
characteristics of the accounts that are being managed tend to be:

Profitability has deteriorated and/or losses are accumulating
Liquidity is poor and the bank facilities are increasingly ‘hardcore’
Gearing has reached a tipping point where the bank is no longer comfortable

• Profitability has deteriorated and/or losses are accumulating
• Liquidity is poor and the bank facilities are increasingly ‘hardcore’
• Gearing has reached a tipping point where the bank is no longer comfortable

The above could be described as the ‘hard issues’, but financial ‘fire fighting’ takes
an inordinate toll on business owners in terms of emotional energy and commitment.
The old adage of ‘trying to see the wood for the trees’ is often very pertinent. This is
an area where the hands on help and experience of a Business Angel investor can
be invaluable.

We all know about the problems that the global credit crunch has caused, but this
has not affected the investor appetite for SME opportunities. Business Angels will
make their own decisions as to how and when they invest – they see investing in
businesses that have been successful in the past as far less risky than early stage/
start-up situations.

This is a counter cyclical market, where there is increased liquidity for turnaround/
distressed opportunities. The upside for bank relationship managers is that there
is access to ‘Business Angel’ funding for SME’s via specialist firms such as Beer &
Young.

We are always pleased to talk to bankers to explain our services more fully and listen
to the views of front line lending managers. Please contact our London offices on
0207 329 6886 or 07808 788803 to arrange a convenient appointment – please ask
for Declan Williams (williams@beerandyoung.com).