Tag Archives: Fladgate LLP

ILN Today Post

Investing in distressed businesses – opportunities in the new environment

Despite suffering the worst recession since the Second World War, rates of corporate insolvency in England and Wales are low by historical standards.  Looking back over the last 25 years, the rate of liquidations as a percentage of active registered companies peaked at 2.6% in 1992, and stood at an average rate of 1.2% over the whole period.  In 2010, however, the rate stood at 0.7%.  Why is this and what are the implications for businesses?

Explaining the paradox

It is true that formal insolvencies tend to peak when an economy is recovering from recession – a time when many businesses are suffering the strain of an increase in trade, and prices of realisable assets are on the rise.  It is also true that low interest rates mean that many weak companies can survive for longer.  However, those factors do not explain the extent of the reduction in corporate insolvencies. This reflects deeper structural changes in the recent downturn in the way that distressed businesses are dealt with in England. More…

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Property in a trading insolvency

This article was first published in Estates Gazette on 23 January 2012.

The acquisition of Plymouth Argyle Football Club from the club’s administrators was complicated not only by the labyrinthine regulatory structure of the football world, but also because valuable property and trading assets were held in the same entity. Similarly complicated non-property regulation and law pose particular problems for insolvent businesses in other fields, such as care homes, airports, hotels, nightclubs and restaurants, where property and trading issues are mixed.

This article discusses how some of the difficulties were addressed in the Plymouth Argyle deal and makes suggestions as to how these issues could be mitigated in other cases.

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The self-employed – are they worth it?

Widespread use of contractors, consultants, casual workers, agency staff and other types of “non employee” workers by organisations has been in place for some time, due to the advantages that such arrangements can offer to both parties.  Individuals providing services on a contractor or consultant basis are afforded a cash flow advantage (and perhaps even a perceived tax advantage) until self assessment at the end of a financial year, whilst businesses have what they hope will be the benefit of reduced cost and risk but also flexibility in disposing of or altering the numbers of workers within an organisation when necessary.

Indeed, such are the perceived advantages of engaging consultants and contractors that it is not unusual for either or both parties to want to characterise a work arrangement as such, even where it is really an employment relationship. More...

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Trends 2012: Employment tribunals

A version of this article first appeared in HR Zone (www.hrzone.co.uk) on
9 January 2012.

After being “positively outraged” at the way in which the Mid Yorkshire Hospitals NHS Trust behaved, an employment tribunal awarded compensation of £4.5 million in December to Polish-born consultant Dr Eva Michalak. The record breaking award was ordered after Dr Michalak was found to be the victim of prolonged sex and race discrimination at the hands of her colleagues, who mounted a “concerted campaign” to bring her employment to an end because of her ethnic origins and because she took maternity leave.

The campaign started with secret meetings (even before Dr Michalak went on maternity leave), which included references to her Polish background and connected issues of competency.  On returning from maternity leave, Dr Michalak made a request for equal pay which was refused.  Following her subsequent allegation of sex discrimination, Dr Michalak’s colleagues started to make complaints about her which were based on “deliberate falsehoods” and led to her “lengthy and wholly unauthorised” suspension in January 2006.  The related disciplinary proceedings did not take place until over a year later in May 2007, which finally resulted in her dismissal in July 2008. More…

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An Olympic headache for employers?

The long anticipated Olympic Games (Games) are finally arriving in London in July 2012.  Whilst many Londoners are excited at hosting such a prestigious sporting event, employers face legitimate concerns that disruption for staff and their day to day operations may spoil the occasion.

By planning ahead and preparing for the inevitable consequences of the Games, it should be possible to avoid the worst of the disruption.

Employee absence

Holiday leave is likely to be much in demand during the Games for members of staff who are volunteering at the Games, who wish to attend daytime events, or even from those who want to get away from it all.  Employers should be considering now what minimum staffing levels are required and planning ahead to ensure that these are maintained.   Any special arrangements for considering holiday requests for leave during the Games should be clarified to employees – for example, holiday leave could be limited to five working days to give the most employees possible the chance to experience the Games and associated festivities. More…

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Occupy the web?

Not only has the word “Wikipedia” entered into everyday language but the online encyclopaedia’s blackout of its service on 18 January 2012 has certainly prevented many of us from looking up a quick fact. (Particularly many students!)

The online encyclopaedia’s blackout is in protest against two anti-piracy laws currently being debated in the US.  Google has also joined the protest by adding a statement on its homepage: “Tell Congress: Please don’t censor the web!” The Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA) were designed to tackle online piracy, with emphasis being placed on illegal copies of songs and other forms of media.  If the copyright holder were to discover that a foreign site is offering illegal copies of songs or movies, it could seek a court order that would require search engines, for example, to remove links to the site and also require advertising companies to cut off payments to it.  The copyright holders would have a right to seek court orders against any site accused of “enabling or facilitating” piracy, which could potentially involve an entire website being shut down because it contained a link to an offending site.  This may have implications on numerous websites that depend on customers uploading media content.  More…

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Curtains for Hackney

This is the sad tale of the £11 million refurbishment project at Hackney Empire Theatre.  Following the insolvency of its main contractor, Sunley Turiff Construction, it was left facing a £3.2 million hole in its finances.  The new theatre’s first season of productions and the Christmas pantomime had to be cancelled and tickets refunded.

You would have thought the theatre could take some comfort from the fact that a £1.1 million performance bond had been taken out with Aviva to cover any damages caused by breaches of the building contract.  But, instead, Hackney Empire was left fighting a claim by Aviva that the performance bond had been discharged as a result of actions Hackney had taken to assist the contractor in completing the building contract. More…

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