IPA exclusive industry update from Insolvency Insider
IPA Insolvency Practitioner newsletter, February 2024
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.
Recent insolvencies
CC Stim UK Topco Limited and six other companies within the Rekom Group, the UK’s largest nightclub operator, entered administration on 1 February 2024. The group has faced an extremely difficult period due to the combination of the cost-of-living crisis hitting younger generations and students particularly hard, as well as the rising National Living Wage alongside increased business rates and costs of operating. Immediately on the appointment of Jon Roden, Rob Parker, and Helen Dale of Grant Thornton UK as joint administrators, 11 sites were sold to new owners. A further 23 sites comprising 10 bars and 13 nightclubs will remain open, while 17 sites, including six Pryzm and four Atik nightclubs, will close after the group failed to find a buyer to take them on. Efforts have been made to redeploy affected staff, and the group’s chairman Peter Marks said that 1,000 jobs have been saved. Unfortunately, approximately 471 jobs across the group have been lost as a result of the restructuring. Airline Capital Group has a registered charge against the companies.
60 Curzon Street Limited, a luxury London development made up of 32 boutique apartments designed by the French architect Thierry Despont, has appointed Interpath Advisory as administrators. The company, which is majority owned by two Chinese investment firms, has yet to comment on the reasons behind the administration. It is believed that the company suffered as a result of soaring construction costs and rising interest rates which have deterred potential buyers. In addition, key chunks of the development’s selling period occurred during the pandemic which prevented overseas purchasers from traveling to see the apartments. Brockton Capital, which developed the project, said it is in discussions with funder Apollo Global Management regarding the completion of a business plan for an orderly sale of the apartments. Steve Absolom of Interpath Advisory, joint fixed charge receiver, said he expects the development to continue to generate significant interest from high-net-worth individuals.
Orange Mountain Bikes Limited and P Bairstow Limited, West Yorkshire mountain bike manufacturers which collectively employ more than 40 staff, entered administration on 10 January after their financial performance was impacted by Covid-19 restrictions, supply chain disruptions, increasing costs and sector-wide challenges that have also affected companies like Chain Reaction and Wiggle. Mark Thornton and Kerry Bailey of BDO were appointed as joint administrators and said that they are hopeful that a sale of the business and certain assets will complete shortly. Various HSBC Bank entities have registered charges against both companies, while Judith and Steven Wade have a registered charge against just Orange Mountain Bikes.
Insights
The team at Shearman & Sterling examines a less discussed aspect of the Adler appeal – the fact that the dissenting noteholders did not seek a stay of the sanction order pending the appeal, with the effect that the restructuring became effective on the same day the sanction order was made.
Oliver Nelson and Mark Poulston of Weightmans provide an overview of the key steps that IPs should take in an insolvency involving a defined benefit pension scheme, noting that these pension schemes are increasingly now in surplus, raising interesting issues and opportunities for IPs.
Mark Phillips KC of South Square shares his thoughts on the Court of Appeal’s decision to overturn the High Court’s sanction of Adler Group’s restructuring plan, and why it could actually lead to restructuring plans becoming more accessible to smaller companies.
Please note that guest content does not necessarily represent the views of the IPA.