business recovery and reconstruction
we think “solve”, not “insolvency”
Did you know?
• In 2012 the UK insolvency industry was
responsible for saving three quarters of a
million jobs in companies going through
an insolvency process
• The word bankruptcy derives from
‘banca rota’ meaning broken bench,
the fate befalling any Medieval Italian
merchant who could not pay his debts
• In over 25% of cases involving corporate
failure the company’s business is saved
through the use of a rescue procedure.
“Companies want sound
practical advice on their business
operations and how to avoid
running into difficulties.
Even if those difficulties are
inevitable, there is always an exit
route; you are not automatically
doomed. In fact, many businesses
can come back even stronger from
the reorganisation process”
Vernon Dennis, Partner and Head of Business Recovery
and Reconstruction, Howard Kennedy
1
Evolving
to survive
Despite almost 15,000 businesses winding
down in 2013, the encouraging news is that
insolvencies are at their lowest rate since the
global financial crisis took hold in 2008. Indeed,
even at the peak of the recession, the rates were
well below the 20,000-plus annual insolvencies
we saw between 1991 and 1993 (the worst year
on record is 1992, with 24,425 insolvencies).
These statistics may not be of much comfort for
businesses currently facing economic challenges
but the data highlights the genuine desire –
and capability – to prevent companies going
under. Businesses can prepare and adapt in
difficult times and not just resign themselves to
the inevitable. After all, creditors rarely want to
see a business fail. They want to see a business
succeed and will support its efforts to do so.
There are countless reasons that can affect
a business’ performance, from poor decisionmaking to cash-flow problems and from a lack
of finance to a drop in volume of sales. In such
situations, you must not put your head in the
sand. You need to embrace reorganisation.
A company can benefit from a refresh of its
business model, both in terms of strategy and
profitability, and emerge even stronger. There
are always options available, refinancing,
reorganisation, restructuring, selling assets.
Insolvency is not unavoidable.
2
Our services
Our team represents clients, ranging from
companies, directors, individuals, insolvency
practitioners, other lawyers and intermediaries,
on substantial insolvency issues and disputes
within the UK and internationally. The team
draws on experts from across the firm, including
corporate, real estate, litigation, employment
and tax advisors.
If problems do continue, we will act with
sensitivity and professionalism in finding the
best solution for you. This covers litigation,
disputes and claims, voluntary arrangements
and directors’ duties and disqualification.
We aim to establish an effective framework to
protect your interests from the earliest signs
of potential problems. These include external
factors, such as transferring or changing
of suppliers, renegotiating the terms and
conditions of contracts, reviewing and obtaining
finance or refinancing options, as well as internal
processes, like management, employment,
liabilities and tax.
3
Market insight
“A major concern for the UK economy are so called
zombie companies; failing businesses that have been
able to survive due to benign creditor inaction and
historically low interest rates. As the economy recovers
these debt saddled businesses will face tremendous
pressure; they will struggle to meet increased demand
due to lack of available working capital and as interest
rates increase creditors will undoubtedly get tougher.”
Vernon Dennis, Partner and Head of Business Recovery
and Reconstruction, Howard Kennedy
Recent work
• A
cting for the majority stakeholders of a
distressed specialist retailer operating from
14 warehouse stores in the South East in the
purchase of its business and assets from an
administrator and the TUPE transfer of
all staff
• C
ommencing proceedings on behalf of
the Liquidator of a UK company acting as
a global sales agent for world renowned
manufacturer of luxury goods, and controlled
through an off shore structure, in respect of
multi-million pound claim for losses caused
to sub-agents who had traded with the
manufacturer before its demise
4
• A
dvising on the restructuring and subsequent
disposal of the business, assets and properties
of a group of insolvent care home companies
to a variety of different operators
• A
cting for a liquidator in pursuit of
professional advisors after a company in
liquidation suffered a multi-million pound
fraud.
Key contacts
Case studies
Warner Estates:
Acting for the administrators and liquidator (CCW Recovery Solutions) of 8
Warner Estates Plc group companies in the restructuring of the half billion
pound property investment portfolio (over 3000 multi-let industrial units
comprising of 14.6m sq ft) which saw the transfer of its asset management
arm through a pre-pack sale.
Brompton Hotels:
Acting for the owners of a chain of 8 hotels where the leaseholder
Brompton Hotels went into administration following the manager of the
hotels, Brook Hotels transferring its operating business to a company,
which was unapproved by the client. Liaising with the administrators (UHY
Hacker Young) to ensure that the business and assets of Brompton/Brook
were transferred to an operator elected by the client.
Dickens World:
Acting for a syndicate of investors in the restructuring and disposal of
its investment in the Chatham Maritime Development, comprising of a
cinema complex, restaurants and the Dickens World tourist attraction.
Liaising with Liquidators (Mazars) in regards to the insolvent tourist
attraction.
Prince Sports:
Acting for the administrators (Pitman Cohen) of Prince Sports Europe, a
leading racquet sports retailer in the restructuring of its European business.
The pan-European case involved coordination of legal processes as they
affected the workforce across six jurisdictions.
Vernon Dennis
Partner, Partner and Head of Business
Recovery and Reconstruction
[email protected]
+44 (0) 20 3755 5430
Tim Bignell
Partner, Dispute Resolution
[email protected]
+44 (0) 20 3755 5383
Key Clients
Baker Tilly
Begbies Traynor
BDO
BM Advisory
CCW Recovery Solutions LLP
Die Sparkasse in Bremen
Gordon Partners
Grant Thornton
Kingston Smith & Partners
KPMG
Leigh Adams
Mazars
Mercer & Hole
Pitman Cohen
Santander UK Plc (Abbey)
“Vernon Dennis, whose team at
Howard Kennedy ‘punches above its
weight’ and is particularly active in the
real estate sector.”
Legal 500 2014
No.1 London Bridge
London SE1 9BG
DX 144370 Southwark 4
Tel: +44 (0)20 3755 6000
Fax: +44 (0)20 3650 7000
www.howardkennedy.com