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Johnson Matthey Bank Bailout Fraudster Jailed After 25 Years

A fraudster linked to the spectacular collapse of Johnson Matthey Bank (JMB) has been jailed in London for 16 months – more than 25 years after his crimes were committed.

Prosecutors were unable to bring proceedings against Vasant Advani, 67, after he left the Capital for West Africa in 1986. Read more…

HMRC vs English Football: The Battle Rages

English football clubs owed more than £22m in overdue tax to HM Revenue and Customs (HMRC) in 2010, according to figures released last week.

Premier League clubs owed £8.6m, Championship clubs owed £6.4m and Football League clubs were indebted to HMRC for £7.4m.

Dave Boyle, chief executive of campaign group Supporters Direct, believes the figures confirm the need for a parliamentary review of the governance of English football. Read more…

Corporate Insolvencies to Drop Following Appeal Court Ruling

A ruling by the Supreme Court in London could lead to a reduction in corporate insolvencies and stop creditors from chasing struggling businesses.

Earlier this month, the Court of Appeal rejected a lawsuit by shareholders from British finance company Eurosail who claim the firm should be liquidated after buying £650m of UK mortgage-backed bonds from Lehman Brothers in 2007, just months before the US bank filed for bankruptcy. Read more…

Office of Fair Trading’s Insolvency Recommendations are Long Overdue

Last month, the Insolvency Service released a review paper on the regulation of insolvency practitioners (IPs) and asked the public for feedback.

The consultation, which can be read here, follows an Office of Fair Trading (OFT) investigation into corporate insolvency and practitioner fees.

The investigation found inconsistencies in the way complaints about IPs were handled and the OFT’s recommendations appear to confirm the widely-held notion that IPs fees are excessive and invariably at the expense of unsecured creditors.

Primarily, the OFT suggests three major changes: Read more…

Top UK Director Sir Clive Thompson Facing Disqualification Proceedings

The Insolvency Service (IS) is to launch disqualification proceedings against one of Britain’s leading businessmen, Sir Clive Thompson, over his role in the failure of Christmas savings club Farepack, according to the Daily Mail newspaper.

More than 116,000 people lost a total of £40m when Farepack collapsed in 2006 – after lending around £35m to its parent company, European Home Retail (EHR), chaired by Sir Clive. Read more…

Small Business Owners Must Think Smart to Beat Inflation and VAT Increase

The findings of last week’s Bank of England review suggest interest rates are likely to rise over the next 12 months which is particularly concerning for small business owners, still reeling from the recent increase in VAT.

Just weeks before the economic review, a study by Aldermore bank found almost 30% of small businesses will have to source additional funding to tackle the VAT hike.

The bank warned the tax rise will cause deficiencies in the working capital of most small businesses because they are obliged to pay HM Revenue & Customs (HMRC) before receiving payment from customers.

Chancellor of the Exchequer George Osborne’s VAT increase may be counter-productive because it will be a catalyst for growth in the alternative economy; the black market is going to swell. Read more…

Struggling Business Owners Will Act Swiftly, If They Are Smart

In December, I warned that company insolvencies would soar over the next 12 months.

Now, new research suggests that one million businesses are currently facing ‘financial distress’, with 850,000 UK firms currently suffering from decreased profits.

Insolvency & Law provide services for companies in trouble, and businesses affected by companies in trouble i.e. creditors. Read more…

R3 Wrong to Blame Cable’s Insolvency Service for Fall in Company Director Disqualifications

The UK’s leading professional association for insolvency and business recovery specialists, R3, claims dodgy company directors are escaping punishment because the Insolvency Service (IS) is more concerned with meeting targets than launching complex investigations.

According to R3, while the number of reports alleging director misconduct has doubled since 2003, during the same period there’s been a 20% reduction in the number of directors disqualified as a result of an IS investigation.

R3 accuse the IS of focusing on simple and routine cases, but I think the criticism is undeserved. Read more…

Premier League and HMRC Court Battle Set for 15 February

Next month, HMRC and the Football Association Premier League will battle in court over the taxman’s claim that the ‘football creditor rule’ is unlawful.

Under the football creditor rule, when a club enters administration creditors such as players and managers are paid in full, whilst any remaining money is divided between unsecured creditors including HMRC.

Football as a business has continued to evolve, and entrepreneurs in the industry have become more creative with their accounting.

Even so, I think HMRC have a winnable case. I’m unaware of any statute law or provision in the Insolvency Act that specifically provides for footballers or football creditors to be treated preferentially. Read more…

Remedies for Struggling Directors: CVAs and Renegotiating with Creditors

Company directors experiencing financial difficulties often consider terminating agreements and contracts to reduce the burden of their debts.

A director in this position must avoid delaying decisions and rectify the situation as soon as possible; otherwise the business will experience a rapid decline in trade and become insolvent.

Reducing staff and rented equipment will lower costs, but leave you liable for compensation and cancellation payments. Also, many contracts have termination clauses that require lengthy notice periods. Read more…

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