IPA exclusive industry update from Insolvency Insider

IPA Insolvency Practitioner newsletter, January 2025

A specially curated selection of the top stories for IPA members from Insolvency Insider Editor, Dina Kovacevic. More information on all the stories and the link to subscribe to the newsletter is here.

The Customade Group of companies, suppliers of window profiles, glass, roof and door systems to the construction industry, had a majority of their businesses purchased out of administration, saving approximately 500 jobs. Customade Group Services and its subsidiaries, Gloucestershire-based Customade, Gateshead-based Virtuoso Doors, Gloucestershire-based Stevenswood and Norwich-based Polyframe, entered administration on 18 December after facing significant financial strain in recent years, demonstrated by group level accounts which show operating of losses of more than £13 million in 2022. Shortly after the appointment of Robert Croxen and Mark Firmin of Alvarez & Marsal as joint administrators, two separate deals were completed, saving four of the group’s five businesses and about 500 jobs. Unfortunately, neither of the deals included Gateshead door manufacturer Virtuoso Doors, which is being wound down, resulting in about 100 redundancies. The companies were assisted by Squire Patton Boggs. This represents the second administration for Customade, which was previously saved out of administration in 2020 via a deal with investors that saved about 900 jobs. Bibby Financial Services and Midcap Financial have registered charges against several of the companies.

Wharfside Industrial Limited, a specialist metals manufacturer formed following the prepack sale of the collapsed Fablink group, and various Fablink subsidiaries entered administration on 7 January. As part of the prepack deals, which completed about four months ago, all 521 employees were transferred to the purchaser. Unfortunately, however, since the acquisition, Wharfside has lost key customers, culminating in the appointment of Daniel Hurd and Lucy Winterborne of EY as joint administrators. Approximately 427 employees have been made redundant whilst administrators look to sell certain parts of the group and its assets. TDC Impact and Praetura Commercial Finance have registered charges against Wharfside, which was assisted by Shoosmiths.

Huboo Technologies, a Bristol-based e-commerce fulfilment technology company, was purchased out of administration by an investor consortium led by Baaj Capital and AB Capital. The company entered administration on 23 December after facing “increased headwinds due to an evolving eCommerce market”. Shortly after the appointment of Chris Pole and Ryan Grant of Interpath as joint administrators, a sale was concluded with Baaj Capital and AB Capital, reportedly safeguarding over 600 jobs. The company was assisted by Eversheds Sutherland. Bibby Financial Services, Mic Capital Partners (Ventures) Europe Parallel (Luxembourg) Aggregator Scsp, Kreos Capital Vi (UK) Limited and HSBC UK Bank PLC have registered charges against the company.

Insights

Faadil Patel and Emily Scaife of Burges Salmon explain that further changes are on the horizon for the special administration regime for the water sector, including a proposal that could affect the financial standing of well-performing companies.

The team at Squire Patton Boggs counts down its top insolvency predictions for the year ahead, noting decreased excitement about restructuring plans in the mid-market, a potential consultation on changes to the CVL regime and a need for further clarity on a number of issues, including the classification of creditors and administration extensions.

The Insolvency Service has released a report with bleak conclusions on the efficiency and effectiveness of the CVL process, with key findings including that the median cost of a CVL (fees as a percentage of the value of the estate) in the cases reviewed was 163%, and that the median recovery rate for all creditors was 0%.