Restaurant chain’s pre-pack still sees outlets close; creditors may get some cash from collapsed firm; entertainment firm’s CVA plan; June’s insolvency figures out; and cruise company’s insolvency threat

Restaurant chain’s pre-pack still sees outlets close; creditors may get some cash from collapsed firm; entertainment firm’s CVA plan; June’s insolvency figures out; and cruise company’s insolvency threat

Pre-packs divide opinions like almost no other aspect of insolvency due to the way they can and have been abused. Seen as a stitch-up by creditors and a way of saving jobs and a business by its creators back in 2014 pre-packs were invented to give a company a second chance under a new owner. When the new owner is er… linked to the old owner then questions are asked, and many observers say all pre-packs should be scrutinised by the pre-pack pool instead of allowing it optional for experts to examine the deal.

Restaurants will close despite deal

The Caterer has reported on the pre-pack administration for the casual dining outfit Bistrot Pierre. Reporter Emma Lake said: “New entity Bistrot Pierre 1994 Limited, of which the business' chairman John Derkach and chief executive Nick White are directors, has taken forward 19 of the group's 25 sites, which are largely in rural towns. Six sites will close because of the administration, resulting in 123 redundancies.”

Administrators KPMG said: “Despite exploring all alternative options, including relief schemes like the Coronavirus Business Interruption Loan, the directors took the difficult decision to file for the appointment of administrators.”

The Caterer said the outlets in Bath, Cardiff, Harrogate, Leicester, Middlesbrough and Sheffield will close. Bistrot Pierre was launched in Nottingham 26 years ago.

Unpaid wages and creditors left high and dry

Writing in Building Dave Rogers and Jordan Marshal report that unsecured creditors of Cluston may recoup some of their lost money according to the administrators KPMG. They reported: “Unsecured creditors, including subcontractors who were owed £11m, have been told they will get something back but KPMG said it was unable to say how much and by when. Funds KPMG has raked in include £1.4m after it novated a contract to build an Asda store in Worksop, Nottinghamshire, to Hull contractor Ashcourt, selling IT equipment and furniture for a further £60,000 and recouping more than £800,000 from its construction and FM debtors.”

Lincolnshire based Clugston went bust last Christmas and 324 staff lost their jobs with £494,000 in unpaid wages along with a long list of creditors who were left high and dry.

CVA plan or it’s the nuclear option

The bigger they come the harder they fall could be the line about Buzz Bingo who are larger in club numbers than Mecca in the world of club bingo. The lockdown has killed the social style of their business and the firm have in effect called their creditors’ bluff with a ‘take it or leave it’ Company Voluntary Arrangement (CVA) offer.

CEO Chris Matthews said: “Following a thorough review of our options, the proposed CVA will restructure our retail portfolio to ensure we are well positioned for a return to growth, while adapting to the ongoing, challenging environment as we start to reopen the majority of our clubs."

The CVA includes shutting a string of bingo halls along with slashing 573 jobs in order to retain a core business of 91 clubs which will begin to reopen in August. Creditors must now decide whether to back the plan or see the entire business go bust.

Weird insolvency figures for June – what’s going on?

Furloughing staff, the new insolvency rules and a lack of man power to process company liquidations and insolvencies due to Covid-19 and working from home has seen the strangely low figures in June compared to this time last year.

Company Rescue said: “This is likely to be driven by the Government measures put in place in response to the coronavirus pandemic, including HMRC reducing its enforcement activity, reduced operational running of the courts, temporary restrictions placed on the use of statutory demands and certain winding up petitions and enhanced government financial support for companies and individuals.”

The only increase in the figures were compulsory liquidations while there was a 60% decrease in the numbers of CVAs and a 33% decrease of administrations, compared to the statistics of June 2019.

Cruise firm’s sinking feeling

Essex based cruise liner firm will file for insolvency if desperate negotiations with VGO Capital Management fail. Cruise & Maritime Voyages employs around 4,000 workers and has had its business destroyed by the Covid-19 crisis when cruise ships were widely described as ‘petri dishes’ for the virus.

The company has also been hit by problems of how it has treated staff with the Maritime and Coastguard Agency detaining five or their ships over late pay and expired contracts. Complaints were made by staff on board the ships who had not been allowed to leave the ships to return home for more than 11 months breaking the legal limits in maritime employment law.

The Foreign Office has changed its advice for cruise lines meaning they are now permitted to cruise in British waters and rivers opening up at least part of the market this summer.

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