The current coronavirus crisis has not only created a landscape of temporarily vacated commercial properties, but has also hastened the tidal-wave of insolvencies and businesses that had been on the verge of going into administration due to the impact of changing consumer habits.
In the past few weeks a swathe of well-known names have gone into administration — retailers Debenhams, Kath Kidston, Laura Ashley, Bön Marche and Oddbins – with restaurant chains Carluccio’s, The Restaurant Group (including Chiquito) and Martin Hix’s group (just yesterday) following.
“The hospitality and retail sectors have been particularly badly hit” says David Wormald, key accounts manager for specialist security company VPS’ Hospitality and Retail sector. “They’ve taken a triple whammy from the impact of the internet, increased competition from supermarkets, and now, crucially, at the worst possible moment, the pandemic.”
But what happens behind the scenes when a company calls in the administrators?
Under the Insolvency Act, 1986, an administrator has specific duties and responsibilities to creditors, and in the first instance will take control of a troubled company with a view to business rescue. They have a duty to act in the best interests of creditors as a whole, and will attempt to realise the highest returns for all groups if rescue is not possible. If this also fails, they must attempt to achieve a better result for creditors than if the company had been liquidated.
“We may get a call from an insolvency practitioner who says they have 300 stores across the UK that need securing, or that have goods or valuables inside that need to be removed.” Mr Wormald explains. “And of course they want it, need it, done yesterday. Some while back we had a parcel courier company that unbelievably went bust literally on Christmas Eve. They still had 30,000 Christmas parcels stuck in their depots, and on December 30th we were asked to secure all 51 of them, stretching from Aberdeen to Southampton, simultaneously. We managed to complete it within 24 hours, the last depot about 7pm on New Year’s Eve.”
More recently, the company handled the demise of Thomas Cook, a far larger business, with 557 shops closed overnight, and again a swift response was required for several tasks. These comprised key management for all 557 stores within 48 hours of receiving the instruction, escorted access for a specialist data security removal firm, and the removal and security of foreign currency and other valuable assets.
Mr Wormald concluded “When a company goes out of business, people lose their jobs, and that impacts on their families badly. If they haven’t had notice of the closure, we often see their family photos still left on their desks or stuck on the walls, and it really brings home the message that behind every business collapse there are hundreds of personal stories. I would class these types of jobs as ‘not pleasant but necessary’. Anything that can help salvage the business, whether for staff, customers or suppliers, must be done.”
VPS have issued a case study that outlines their experience of the Thomas Cook insolvency, which can be read here: “Thomas Cook: A complex operation”
#insolvencies #bankruptcy #securingproperty #protecting assets
What happened when the parcel courier that went bust on Christmas Eve can be read here.
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VPS is a specialist provider of vacant property, occupied premises and site security solutions.
In 2019 they were nominated for the fifth successive year in the IFSEC Security and Fire Excellence Awards, for Customer Care and Security Installer of the Year.
Operating from over 50 locations across UK and Europe, they protect over 50,000 properties and sites at any time.