It is believed one of its major down falls was the decision to focus more on manufacturing printers, and shift away from the camera market. An odd move since the camera was the reason for the companies original success. Kodak has been in existence for over 133 years and its directors unanimously voted for taking these insolvency advice measures to create the best chance of survival.
Ironically, Kodak’s problems stemmed from their original success – selling film, which made them an over night success for decades. The digital camera was born and film sales plummeted. Its not like Kodak did not see this coming, how could anybody not see the digital age come galloping over the horizon at the speed of light. They simply hesitated for too long, it was felt moving away from film would essentially disembowel the business and this caused them to stall on formulating a new strategy, the result – competitors over took!

Kodak are implementing many of the measures that would be included as part of any insolvency advice strategy. A credit facility to the tune of £615million through Citigroup has been put into place and shares have been suspended, which have been in decline for the last decade. Concentrated efforts will be aligned to new product development in the area of digital and future technological advancement, an area, if tackled correctly is the most likely to spring board them back to success.

The best advice any business can take is to follow in the foot steps of Kodak in terms of the way they are tackling their corporate recovery. As soon as problems arise, do not ignore the situation, seek insolvency advice and put measures in place to try and save your business. There is nearly always a solution to any problem and we can help you find it. Burton Sweet wishes Kodak a successful future and full business recovery.

Ex-international footballer Colin Hendry was confirmed bankrupt despite huge personal wealth and many successful business interests. The prospect of bankruptcy and financial difficulty is not limited to businesses and individuals of lower incomes and turnover, sometimes the more you have, the greater the risk of loss. For businesses, if issues are addressed early on and they are not left to spiral out of control, as in the case off Hendry, corporate recovery can mean the difference between future or failure.

Ex Rangers player Hendry made millions across his high profile career. It was confirmed that he owes around £2.2 million to the taxman and other creditors, some of whom are family and friends. He had established 3 successful businesses in as many years and now has only a very frugal £250 credit limit at the bank.

He admitted to the courts that gambling had played a large part in his financial problems and the bad habits began soon after the death of his wife, who died after a plastic surgery procedure went wrong. Hendry struggled to cope with her death and his gambling quickly spiralled out of control. He owes Spreadex – an online gambling company over £30,000. They have now filed a bankruptcy petition against the footballer which is to be held at Blackpool County Court. This is just a tiny portion of what the player owes in gambling and taxation debts.

Burton Sweet Corporate Recovery deals with a whole host of issues that pertain to the circumstances of businesses and individuals when we are providing insolvency advice. It doesn’t matter what caused the financial troubles but how corporate recovery or individual recovery are tackled to get over the issues and Burton Sweet are experts in this field.

1) External conditions outside of the business, like an increase in the costs associated with running a business, a new competitor opening down the road or some sort of act of god like a flood or fire. There is little you can do to avoid these things happening, except adjust the internal factors taking place in your business accordingly.

2) Internal business conditions that can be controlled, such as bad location, an unbalanced client portfolio and weak management. These factors can be adjusted, if your premises are in the wrong location then move. If you rely on clients from one major industry or have one client that generates 80% of your revenue, have a think about how vulnerable this makes your business. If that industry sector hits problems or your one major client goes under – you could too!

3) Tax related issues are a vey common area of concern, particularly to smaller business owners who perhaps don’t have the processes in place for tax to be managed via automated systems and undertake tax management manually or in their heads! This can result in hefty amounts being owed either in income tax, employee related taxes or VAT, as the money gets spent on other things and the tax bills begin to come in thick and fast. At Burton Sweet Corporate Recovery we have corporate recovery tax specialists who can help you with this.

4) Financial problems, for instance a sudden loss or withdrawal of capital or funding. It is not uncommon for banks to recall lending in today’s economic climate. A classic example of this was the recent recall of a major bank from the famous chef Gordon Ramsay, who was forced to close restaurants. The inability to secure new capital when it is needed can often also result in company bankruptcy, as can cash flow difficulties – for example if outgoings remain the same or increase and a handful of major clients default on payments because of their own financial adversity.

If you think your business may be at threat from any of these factors, why not give Burton Sweet Corporate Recovery a call and benefit from our specialist corporate recovery and insolvency advice – it could save your company, your pride and all the hard work and cash you have invested in your business over the time you have been in business.

Official statistics from the Insolvency Service revealed that during 2011, there was an increase of between 2% and 4% of businesses going into liquidation, when compared to the year before. The figures for UK businesses were in contrast to that of individuals. Data showed that during 2011, there was a significant drop in individual insolvencies, which varied between 1.7% and 15.5% throughout the year. It seems that the economic downturn and uncertainty of recent years has taken its toll more heavily on companies, as the public strive to get on top of their personal finances. It shows that many individuals have simply had to make some tough decisions when managing their money during a period of time when inflation has soared over earnings increases and taxation is at an all time high. In situations like this you often expect cases of insolvency among the general public to go through the roof. There has been a lot of private and government debt and insolvency advice available to the general public during the tough times and this has obviously been of some help.

One of the cofounding economic issues of individuals getting on top of their finances and curbing spending, is that for businesses who rely heavily on consumer trade are affected further still. Business slows down and the chances of them recovering is quite slim, unless their business model can be tweaked, the economy recovers (which often takes time) or the business has other revenue or equity  to see it through the blip.

Statistics reveal that there are certain business types that are more venerable and at risk from insolvency. Smaller businesses, in particular those outside of the generally speaking more affluent South-East, are at greater risk of failure and therefore more likely to require corporate recovery. For any company worried about the risk of insolvency or even if you would like advice on how you can avoid hitting financial trouble during times of economic hardship, speak to the insolvency advice experts – Burton Sweet Corporate Recovery.

Due to the economic downturn of the past few years, more and more businesses have been coming to us for corporate recovery advice. One of the growing areas of concern has been the inability of many companies to meet tax payments from HMRC, either VAT, PAYE or NIC. It is always a huge worry if these payments cannot be met and puts a huge strain on businesses and their owners.

If your business has tax problems, like arrears of PAYE and VAT then the company is probably either insolvent or close to insolvency. You must act to do something about these problems in order to ensure your company recovers.

If you have not managed to pay PAYE and NIC deductions to HM Revenue & Customs, it is considered a serious offence; essentially as it is tax payer’s money that is viewed as being withheld. It may be that the money has been deducted and gone on to pay other debts; this however does make it fine.

What are the available options if I have not met TAX payments?
1.    Ask for time to pay the debt. In the current recession HMRC has a Business Payment Support Service introduced by the Government in 2008. It states that all SME’s with cash flow issues should be able to get a ‘time to pay’ arrangement with HMRC.
2.    You could consider a company voluntary arrangement.
3.    An administration solution may protect the company from aggressive legal action from HMRC.
4.    Finally, can you introduce more money into the company to pay the tax debts?
Burton Sweet Corporate Recovery has the experience to help you with any of the above options.

Non payment of any form of tax is a failure to comply with tax legislation and also signifies publicly and loud and clear to HMRC that the company is insolvent. So, you need to act properly and responsibly and deal with this serious threat to your company.
The Burton Sweet Corporate Recovery team has vast experience in providing discrete tax related corporate recovery, with a successful track record in handling even the most complex assignments. We guarantee there is way out, get in touch today, don’t put it off until tomorrow – contact us now.

“Fraud” is defined as falsification with intent to deceive.  The generally accepted definition of “neglect” is that laid down in 1856 in the case of Blyth v Birmingham Waterworks Company as “the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a reasonable and prudent man would not do.  The defendants might be liable for negligence, if, unintentionally, they omitted to do that which a reasonable person would have done, or did that which a reasonable person taking reasonable precautions would not have done”.

Mr O’Rorke had been the finance director of a company called L Wear Limited, which went into administration in March 2007 owing HMRC £321,307 in unpaid NICs.  HMRC duly issued a PLN against him, and he appealed the PLN claiming that he had been suffering from an addiction which affected his behaviour.

In his defence he relied in part on the comments which had been made in the House of Lords during the passage of the legislation, where Lord Haskel had said “the investigation of each director’s responsibility will be carried out so that only those shown to have acted knowingly and deliberately will be penalised”.  Mr O’Rorke claimed that this meant that it had been envisaged that a defence that a director did not know what he was doing (for example, because of incapacity caused by mental illness) could be used, a defence which would not be available if applying the strict Blyth v Birmingham Waterworks definition.

The Tribunal noted that section 121 is contained within a part of the Social Security Administration Act which deals largely with criminal offences.  It concluded that the purpose of the provision – to transfer a liability from the company as employer, to its officers – was a form of punishment.  It decided that the context of the word “neglect” within the legislation reinforced its view that it was a penal provision, especially when used alongside the word “culpable”, and that under European human rights law the PLN provisions should be classified as criminal.

Taking all those things together, the Tribunal found that the state of mind of the individual against whom the PLN forms an essential ingredient of assessing liability.  A full transcript of the Tribunal’s decision can be found at BAILII. How wide the application of the decision will be, remains to be seen.  For now though, let’s toast a small victory for the little man against the might of HMRC.

We’re grateful to Reynolds Porter Chamberlain LLP for bringing this case to our attention.

Burton Sweet Corporate Recovery offer corporate recovery and insolvency advice, with an approach tailored to suit your specific needs.  We can find a solution for your problems.

The rule that a guarantee for a debt must be in writing can be traced back to the Statute of Frauds Act 1677.  However that rule was circumvented as the result of a case in 1789 (Pasley v Freeman), which decided that if someone fraudulently represented that another was creditworthy, then that representation could form the basis of an action.  Unsurprisingly the Courts became clogged up with allegations, sometimes true but often not, that such fraudulent representations had been made.

To address that problem, along came the Statute of Frauds (Amendment) Act 1828, usually known as Lord Tenterden’s Act.  Section 6 of that Act said that someone can be personally liable to creditors for deceit if they make a representation to another person, in order to obtain credit, which is fraudulent.  However, the representation must be in writing and signed by the person to be charged.   So imagine the surprise of Mr West and Mr Phillips when the Court of Appeal found them personally liable for their company’s debts to Roder UK Limited even though they had put nothing in writing (Roder UK Limited v West and Phillips).

Messrs West and Phillips ran a marquee hire company called Titan Marquees Limited.  Titan had done business with Roder, a wholesale supplier of marquee equipment, over several years.  In March 2007 Roder instructed a debt recovery firm who threatened proceedings.  Titan made an agreement with the recovery firm to repay the debt by monthly instalments of £1,000.  After three months they realised that repayments at that level were unsustainable, and reduced the figure to £500.  Even those payments petered out after a few months.

In March 2009, Roder’s office manager contacted Mr Phillips who explained that there was an insurance claim pending and that once the payout was received the payment plan would be resumed.  In fact, there was no insurance claim.
Some while later, the managing director of Roder spoke to Mr West, who said that Titan was selling up at the end of the trading season (marquee hire is a highly seasonal business) and that all debts would be paid off out of the sale proceeds.  In fact, there was already a contract in place to sell the business and there would be no further capital payment.

In May 2010 Roder finally issued proceedings against Titan for the outstanding unpaid invoices, and against Mr West and Mr Phillips in the tort of deceit.  The basis of the claim against the directors was that, as a result of their representations, Roder had delayed issuing proceedings and had refrained from exercising their rights under the retention of title clause in their terms of trade.

The Court agreed with Roder.  Mr Phillips’ representation about the insurance payout was false, and he knew it; Mr West’s claim about the business sale was reckless and without regard to the likelihood of Titan being able to meet its debts in full.  They could not rely on section 6 of Lord Tenterden’s Act because the representations were not made to obtain credit or goods.  The credit was already obtained, and that it had been extended beyond the 30 days’ contractual term was hardly with the consent of Roder once the payment plan broke down.  There was no chance that, in 2009 when the representations were made, Roder would supply further goods.  So the directors had to pay up even though they had put nothing in writing.

See BAILII for a copy of the transcript of the judgement in this case.

Burton Sweet Corporate Recovery offer corporate recovery and insolvency advice, should you require it. For more information please contact a member of our highly knowledgeable team for further information.

With economic conditions worsening across the euro zone, banks are pulling back their support from struggling companies, putting many more at risk of administration and leaving lenders themselves facing hefty losses on loans.
‘It seems they would rather put the businesses into administration and get back what they can. One year ago they might have taken a punt on the equity,’ said Paul Daccus, principal at private equity group Sun European Partners.
The forced sale of Luminar, the former London-listed night clubs group, is a sign of the mood. The owner of the Oceana and Lava & Ignite clubs was put into administration in October, when its lenders Barclays, Lloyds Banking Group and Royal Bank of Scotland cut credit lines. A sale last week will lead to them only recovering a fraction of their loans. Corporate recovery advice may have helped this company get over this credit line issue but like many companies the signs were ignored and it was left too late.

Some of the banks argue their approach to handling distressed companies hasn’t changed; it’s more that the economic conditions are gloomier.
‘If we can see a route back to value we will always back ourselves to do that. That hasn’t changed. What has changed is that we are in a very uncertain business environment which makes forecasting with any accuracy extremely difficult,’ said Graham Rusling, head of credit risk and business support at Barclays Corporate.

With the path to corporate recovery looking longer and trickier to read, banks run the risk of holding companies for longer. Higher costs for holding equity that will come under Basel III regulations are also acting as a severe disincentive for banks to take control, or to plough more money into the companies they already hold. It all strengthens the argument for banks getting out earlier if they can.

If your company has concerns over revenue streams or credit lines being cut and you see this a ‘real’ threat to your business, then you must act immediately because it can quite literally happen over night and a back up plan through sound corporate recovery advice, could be the life or death of your company. Think about it as going to see the doctor when you get symptoms of a heart attack, instead of waiting for the heart attack to happen. For more information on how Burton Sweet Corporate Recovery can help your business please contact us.

At Burton Sweet Corporate Recovery we would prefer it if nobody had to go through the pain of insolvency, that’s why we offer insolvency advice guides that provide information on how to reduce the risk of insolvency, by suggesting avoidance actions to take. Don’t wait until it happens; take some of our recommended steps to avoid it. Keeping cash flowing into the business is a challenge for many small companies. There are several ways to improve your cashflow situation:

Bill promptly – invoicing promptly and regularly helps ensure a steadier flow of cash into the business. Negotiate regular payments across the life of any long-term contracts.

Avoid overtrading – don’t continue to accept orders and try to fulfil them if you don’t have enough cash or resources to do so.

Recover debts – chase up any debts owed to you.

Trim your inventory – excess inventory ties up your cash. Take the time to plan a stock reduction programme.

Renegotiate your credit limits – adjust payment dates and credit limits with your main suppliers.

Factoring – sell outstanding invoices to a third party, known as a factor. Factors pay some of the debt off in advance of collection.

Sell suplus or underused assets – raise cash by selling under-utilised assets and then leasing them back. However, you must sell the assets at their true price and check whether the sale will result in a profit or a loss.

You can also approach your bank to discuss the possibility of extending your finance. Try not to worry the bank unduly, as they could call in any overdraft and make matters worse.

These are just a few small steps you could take on a regular basis. Talk to Burton Sweet Corporate Recovery for more in depth insolvency advice, corporate recovery advice and discuss how you can keep your company’s balance sheet healthy and avoid insolvency.