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A plague on all your House of Frasers
British department store, House of Fraser have confirmed plans to close 31 of its 59 stores across the UK and Ireland, placing thousands of jobs at risk. Proposals were approved last month for Company Voluntary Arrangements ("CVAs") of House of Fraser (Stores) Ltd and House of Fraser Ltd which are reported to be central to the significant restructuring of the business. The stores scheduled for closure will remain open until early in 2019.
House of Fraser's CEO has said that the CVAs were the "last viable" option to save the failing business, following losses last year of £44 million.
House of Fraser's landlords will suffer the biggest losses as a result of the CVAs and a large number of the landlords rely on the leases to provide income for pension funds. The majority of landlords opposed the CVAs but were outvoted in the end.
Ashfords' Take: House of Fraser is yet another example of a high street retail business struggling with rising costs and competition from online shopping. The retail giant joins a long list of other high street names who have proposed or entered CVAs in the last 12 month, including New Look, Prezzo, Mothercare, Carpetright and Byron Burger.
Big Four under scrutiny after news of Carillion fees
As it transpired from the National Audit Office's report on Carillion that accountants and lawyers could receive up to £70m in fees from the collapse of Carillion, attention has again turned to the accountancy firms in the insolvency sector. The business committee criticised an apparent lack of competition between the Big Four for criticism, with the chair stating that "the dice are loaded in the Big Four's favour. They make a killing in fees advising struggling companies how to turn them round and then they pocket millions tidying up when that advice fails."
While most of the focus has so far been centred on Carillion and PwC, the reaction to the latest report suggests focus could be widening to the insolvency sector in general.
Ashfords' Take: In a market where suspicion over professional fees is already high, the latest turn the Carillion saga has taken is an unwelcome development for the insolvency industry.
Ahmed and others -v- Ingram and others  EWCA Civ 519
Following a bankruptcy petition on 23 January 2007, Mr Eaitisham Ahmed had entered an IVA which was approved as a result of votes of family members who claimed to be creditors. The IVA was challenged and a bankruptcy order was made on 21 April 2009. David Ingram and Michaela Hall were appointed as Joint Trustees on 14 April 2010, following a trustee in bankruptcy initially appointed on or around the time of the bankruptcy order.
Between the presentation of the petition and the making of the bankruptcy order, the Bankrupt transferred his shares in various companies to his brother, Kashif Ahmed. The shares were then transferred from Kashif to other family members, Ms Bushra Ahmed, Ms Tesneem Ahmed and Ms Tabusam Hussain, before then being transferred back to Kashif before 30 June 2010. During the period of time from the original share transfer from the Bankrupt, the shares had diminished in value.
The Joint Trustees applied for a declaration under s.284 Insolvency Act 1986 that the share transfers were void, on the basis that they were made post-petition, and sought to recover the loss in the value of the shares. The Bankrupt's family members accepted that the share transfers were void and delivered up the shares to the Joint Trustees shortly before the trial. However, as the shares had diminished in value, the Joint Trustees were still seeking to recover the loss and the trial went ahead.
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Mark Graham Tailby and Tyrone Shaun Courtman v Hutchinson Telecom FZCO  EWHC 360 (Ch)
Mr Tailby and Mr Courtman were appointed Administrators over three connected companies: TPS Investments (UK) Ltd; ABC Prop Co Holdings Ltd and CP Investment Holdings Limited. TPS was a property developer and owned a number of properties; two of these were transferred to ABC and one to CP.
Hutchinson was a creditor of TPS who held security over four of TPS' properties including those which TPS had transferred. Hutchinson sought permission to enforce its security over one of the properties, and also sought the removal of the Administrators. The basis for the removal application was that the transfer of the two properties had been at an undervalue ("TUV").
As the transferors and transferees were connected parties that shared the same Administrators, Hutchinson asserted that there was an inherent conflict of interest in the Administrators properly investigating the TUVs, and that they should therefore be removed. They argued that the interests of the Administrators of TPS (the potential claimant) in reversing the TUV would conflict with the interests of the Administrators of ABC and CP (the potential defendants) as recipients. As such it was simply not possible for the Administrators to carry out their duties.
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