Carry on Carillioning
The saga of Carillion's collapse continued this month, as it transpired that accountancy giants EY had prepared plans to restructure the troubled construction firm as early as mid-December 2017.
The plans involved breaking up Carillion to sell the profitable parts of the business, which it was estimated would have generated £364 million. The non-profitable parts of the company would have been placed into liquidation under the plans. The proposal suggested that this would also have generated £218 million to be distributed to the firm's 13 pension schemes, which currently have a deficit of around £1 billion.
The directors of Carillion rejected EY's proposal, however, and the Cabinet Office - which was also in the loop - has suffered heavy criticism for apparently failing to apply sufficient pressure on the directors to accept it. Hindsight is a wonderful thing, of course - but given that the government was clearly aware of Carillion's precarious situation, it does raise questions about their approach when the stakes were so high.
Ashfords' Take: As developments are revealed, concerns about apparent government failures government failures continue to grow.
Toys R Us wiped off the Maplin
Two big name high street retailers entered Administration in February: On 28 February, Toys R Us, whose financial struggles had been attracting media attention (not least from Ashfords' Restructuring & Insolvency Bulletin) since before Christmas, finally threw in the towel and appointed Administrators from Moorfields; while electrical goods firm Maplin also appointed PwC on the same day.
Both firms have sizeable debts and will likely leave creditors severely out of pocket. Toys R Us is estimated to owe around £664 million to financial institutions and banks, while other creditors, such as suppliers and landlords, are owed many millions more. It is estimated their liability deficit could exceed £1 billion. Maplin's creditors have yet to be finalised.
Ashfords Take: Another dark month for the high street, which continues to face stiff competition from online retailers and rising staff and premises costs.
Burnden Holdings (UK) Limited -v- Fielding  UKSC 14
The Supreme Court ruled on certain limitation issues regarding a misfeasance claim against the directors of Burnden Holdings (UK) Limited. Burnden was a holding company with several trading subsidiaries. Mr and Mrs Fielding (the "Defendants") were its directors and controlling shareholders. One of Burnden's subsidiaries was a company called Vital Energi Utilities Ltd ("Vital").
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Ve Vegas Investors IV LLC v Shinners  EWHC 186 (Ch)
This case is the latest twist in the ongoing saga of failed fintech "unicorn" Ve Interactive ("Ve"), who entered Administration in April 2017. Certain of Ve's creditors made an application to replace its Administrators, from Smith & Williamson LLP, with new Administrators from Deloitte.
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