For all customers of Boots Herbal Stores Limited who have orders outstanding please note that you may have a claim against the above named company and therefore formal notice of the forthcoming meeting of creditors, on 3^rd February is detailed below.

Presently the company is not in liquidation. It has ceased to trade.

The director has convened meetings of the company shareholders and creditors for the purpose of placing the company in liquidation and appointing a liquidator. The company’s statement of affairs will also be presented by the director at those meetings.

The appointed liquidator will be passed all of the correspondence received by my office from claimants/creditors and it will be for the appointed liquidator to investigate the company affairs and the conduct of its directors.

Please let me have details of your claim together with contact and address details.

I am not in possession of the company records and all queries received are being forwarded to the director.

S98 6B0

NOTICE OF MEETING OF CREDITORS TO APPOINT A LIQUIDATOR

BOOTS HERBAL STORES LIMITED

TRADING FROM:  5 Castle Walk, Newcastle-Under-Lyme, Staffordshire ST5 1AN

REGISTERED IN ENGLAND AND WALES NO:  04457553

THE INSOLVENCY ACT 1986

NOTICE IS HEREBY GIVEN pursuant to Section 98 of the Insolvency Act 1986 that a Meeting of the Creditors of the above-named company will be held as follows: -

At:        St Andrew Town Hotel, St Andrews Drive, Droitwich Spa, Worcestershire WR9 8AL

On:      3 February 2012

At:        11.00am

In order:

(a)        to receive a statement of affairs of the company;

(b)        to hear the board present a report on the company's situation;

(c)        to nominate one or more insolvency practitioners as liquidator or liquidators

(d)        if thought fit, to appoint a liquidation committee; and

(e)        to pass any other resolution necessary.

Other resolutions to be considered at this meeting include those dealing with the basis of the Liquidator’s fees remuneration and disbursements, the costs of preparing the Directors’ Report and statement of assets and liabilities and the costs of convening the meeting.

A list of names and addresses of the company's creditors may be inspected free of charge at the offices of MB Insolvency, Aston House, 5 Aston Road North, Aston, Birmingham, B6 4DS on the two business days prior to the Meeting.

Creditors wishing to vote at the Meeting must (unless they are individual creditors attending in person) ensure their proxies are received at the offices of MB Insolvency, Aston House, 5 Aston Road North, Aston, Birmingham, B6 4DS no later than midday on the business day preceding that of the Meeting of Creditors.  The proxy may be posted or sent by facsimile to 0121 3337 009.  A form of proxy is enclosed.  In addition to any proxy sent, you must also send a statement of the amount owed to you.

Secured creditors can only vote for the balance of their debt which will not be recovered by enforcement of their security, unless they agree not to enforce their security at all.

Mark Elijah Thomas Bowen (IP no. 8711) of MB Insolvency, Aston House, 5 Aston Road North, Aston, Birmingham, B6 4DS, is qualified to act as an insolvency practitioner in relation to the above and will furnish creditors, free of charge, with such information concerning the company’s affairs as is reasonably required.  For further details please contact Suzy Hopwood of MB Insolvency, Aston House, 5 Aston Road North, Aston, Birmingham, B6 4DS on 0121 3596 455 or email suzyhopwood@mb-i.co.uk

DATED THIS:  13 January 2012

By Order of the Board

Regrettably the activities of the above company have ceased and Mark Bowen of MB Insolvency has been instructed to assist the company directors into placing the company into Creditors Voluntary Liquidation.

The Company is a registered charity based in Worcester providing support for young people, children and their families after the death of mum, dad or someone close.

It has fourteen employees and had an annual turnover of just under £500,000.

Mark Bowen the proposed liquidator said, "Unfortunately the Charity has been hit hard by the recession and, despite recently announcing a staff re-structure and the launching of the 'Help us to keep the Ark afloat' appeal, it has been unable to raise enough vital funds to keep the service going.  The Board of Trustees have determined that the charity is no longer able to survive and activities have ceased.

The Charity will be placed into liquidation.  Regrettably all staff have been made redundant.  We will be working closely with employees affected by this decision to ensure that they receive the support they need during this difficult time and to assist them with their claims for redundancy and other compensatory payments".

Families who are currently receiving, or who were due to receive, support from the bereavement team will no longer be able to do so.  Affected families should contact the Child Bereavement Trust on www.childbereavement.org.uk.   They have a confidential telephone counselling service which can be reached on 01494 568900.   They also have an interactive website with a family's discussion forum and produce books, DVD's, CD roms, workbooks and leaflet for bereaved families.  Alternatively, families can contact the Edwards Trust based in Birmingham which provides support and counselling for children aged 4-18 years who are bereaved of a sibling, parent or significant carer.  They can be contacted on 0121 456 4838.

These Charities will also be happy to receive any funds that are in the process of being raised for bereaved children and would have otherwise been donated to Noah's Ark.  The need is still there for funds to help the children.

We are delighted to announce that our Margaret Carter has passed the Certificate of Proficiency in Insolvency ("CPI") exam.

The CPI qualification is recognised as a test of competence in insolvency administration and confirms what we already know of Margaret's solid knowledge of the matters of insolvency law and practice.

Margaret's progression further enhances the committment that we have to providing professional efficient support to clients.

As always we are here to help.

DO ANY OF YOUR CLIENTS HAVE A HMRC TIME TO PAY ARRANGEMENT COMING TO AN END?

HM Revenue & Customs (“HMRC”) has confirmed the July 2011 statistics on Time to Pay, which reveal that £1.02bn remains outstanding under the scheme.

Of the £1.02bn outstanding, £650m is overdue.

The HMRC have said that Time to Pay should be a short term answer to businesses.  Therefore repeat requests are more likely to be refused and the number of refusals is increasing as a percentage of requests.

Currently, it is generally agreed amongst insolvency professionals that it is much more difficult to obtain and agree Time to Pay arrangements.

Any proposed payment plan needs to be underpinned by a cash flow forecast and should demonstrate that the company is paying what it can afford and it can meet the proposed payment.

All information needs to be robust if companies are looking to negotiate a revised Time to Pay arrangement.

If you know any of your clients that have an existing arrangement that is coming to an end that they may need to be re‑negotiated with HMRC, then advice and action needs to be taken NOW.

We are pleased to announce the arrival of Paul Harding at MB Insolvency.

Paul is a member of the Insolvency Practitioners Association and the Association of Business Recovery Professionals and has been a licensed insolvency practitioner since 1986.  He has spent over 25 years in the corporate recovery arena, of which over 11 years were spent with PricewaterhouseCoopers, and he has acquired extensive experience in corporate solutions, advising banks, ABLs and companies.

 He is involved in advisory work, solvent restructuring and takes formal appointments of administrator, administrative receiver, supervisor and liquidator, where this is the appropriate solution after considering the impact on all of the stakeholders.

 His work experience covers a wide variety of business sectors and includes working with businesses in Europe and in other overseas jurisdictions, dealing with cross-border and CoMI issues.  He has also utilised his insolvency skills in court appointed receiverships and in the investigation and recovery of proceeds of crime.

WHAT USUALLY PUSHES A COMPANY OVER THE FINAL EDGE?

For businesses with financial difficulties sometimes the last thing they want to do is ask for help.  In these situations they are usually pushed with no other option but to ask for assistance.  So what often causes that final push?

It usually comes down to one of three events.  The most common reason is that after months of juggling money and cash flow, on the day the employees need to be paid there simply is not the money there to pay them.  They understandably don’t take kindly to this and if they all decide to walk out there is often not a business left to run.

The second reason is that a bailiff calls.  A bailiff can distrain on business assets and take them away to remove them for sale.  A bailiff can be instructed by any creditor owed money who has a County Court Judgement or any creditor with special rights.  These special rights creditors include HM Revenue & Customs and the local council for unpaid business rates.

The third reason is receiving a winding up petition.  This is almost always preceded by a document called a statutory demand.  Once the winding up petition is advertised the business bank account is usually frozen so the business can no longer trade.  The petition is heard at a Court hearing and a decision about winding up the business is made by the judge.

In these types of situations when that business is finally pushed then it may be too late to save it.  So early action is critical and if you are advising a client, encouraging them to talk to an insolvency expert can be the best thing that you can do to help them.

IS BANKRUPTCY THE ONLY ANSWER?

Not always.  There were 12,049 bankruptcies in the last three months of 2010.  What was very unusual about this quarter was that for the first time ever in a period of three months the numbers of Individual Voluntary Arrangement’s (IVA) exceeded the number of bankruptcies.  In that quarter there were 15,508 IVAs

In the past, and before the 1990’s most people who went bankrupt had been in business.  In 1985 there was a law change that introduced the IVA as a new concept aimed to rescue people in business from bankruptcy.  The aim was that they could freeze their debts and be given the time and opportunity to pay them back.

However the take up of IVA’s has been much more than expected.  They are now advertised on daytime TV and often in the press as a perfect solution.  Crucially this advertising is not aimed at business owners but private individuals who have usually run up over £15,000 of debt and have a regular income.

If you know someone who has large debts from being in business then it may help them to speak to a licensed insolvency practitioner such as MB Insolvency about the realistic options open to them.  We will give them impartial independent advice.

Whether in business or not there are a number of options available and not just bankruptcy or IVA.  These options should all be considered and are:

·         An informal arrangement

·         Debt management plan

·         Debt relief order

·         IVA

·         Bankruptcy

DIRECTORS AND THE RISKS

The directors of an insolvent business often ask us if they will automatically be banned from being a director again.  Of course the answer is that they will not but it is worth considering the rules carefully to make sure directors do comply with the law.

The basic principle is that they can be directors again and in fact if they have not signed bank or finance guarantees in the old company then they are unlikely to even have their personal credit rating affected.

The restrictions on being a director again do however apply in the following circumstances; if they have been made bankrupt; if they have been disqualified from being a director or if the new company trades with the same or similar name.  In these cases they cannot usually be a director.

Bankruptcy usually lasts for one year and in this period the individual cannot be a director of any company nor a shadow director (so indirectly controlling or influencing the running of the business).  Interestingly a bankrupt person may still be self-employed.

If an ex-director has misbehaved it is not unusual for the Insolvency Services to instigate proceedings to ban a director from being a director for between 2 to 15 years.  The circumstances that lead to this usually involve wrongful trading or fraudulent trading when the director should have known that insolvency was inevitable and carried on running up debt or did so intentionally.

Lastly, if a company is formed from the ashes of an old business and the company trades in the same or similar name then the director cannot be involved in the new company without going through some very careful procedures first.  There are various exemptions to this rule but to fall foul of them means a criminal offence and personal liability for any new company debts.

If you have clients who are directors and are concerned about any of the above we would be happy to talk to them.

HOW CAN WE HELP YOUR CLIENTS?

We deal with all sorts of businesses that have financial problems.  This can range from a business that needs support and guidance to get through a current difficult trading period or where it has been left too late to be saved in its current form and needs to be wound up.

We can help with:

Administrations – the directors or shareholders can put a company into administration (as can the bank if they have a debenture).  This protects the company for a period whilst it trades and the assets are realised with the objective of repaying creditors.  Usually the primary objective is to sell the business.

Liquidations – the directors, shareholders or a creditor can put a company into liquidation.  It usually means the end of the business.  It is usually better for the directors to do it than let a creditor do it.

Company Voluntary Arrangements – where the directors of a limited company want to save the business but cannot afford to pay all the creditors due now.  It usually involves a freezing of interest and sometimes part of the company’s liabilities are written off with an agreed payment plan over one to five years.  Even tax debts can be written off in this way.

Individual Voluntary Arrangement – as above this usually involves a freezing of interest and a partial write-off of the amount due to creditors’ debts with an agreed payment plan over one to five years.  It is used by a self-employed person or a partnership.

Bankruptcy – an individual can make themselves bankrupt as can a creditor owed over £750.  It is a very effective way of clearing liabilities and making a fresh start.  However, it has to be very carefully considered if the potential bankrupt person has assets such as a house with equity in.

When a business is on the brink of collapse, many people believe that there is no alternative to Administration or Liquidation.  But there is another way.

An option which could see you restructure your business without closing, preserve the company’s accumulated tax losses, substantially improve its retained profits, avoid the stigma of insolvency or a pre-packed asset sale and leave you in complete control.

It’s called a Company Voluntary Arrangement (“CVA”). 

A CVA is a legally binding agreement between a struggling business and its creditors and it allows repayment of all, or part of its historic debts, usually out of future profits or asset sales over a period of time, typically between two and five years.

Most importantly, it allows the business to continue trading and owners to retain day-to-day control , albeit under the supervision of the Supervisor.

Many business owners think that a pre-packaged Administration is the only solution and whilst these are attractive for the proposed Administrator, these often fail because owners do not appreciate the difficulties arising from being associated with such transactions and in particular securing credit for future supplies from their creditors.

With a CVA, creditors are likely to be more agreeable because:

· They have a say in the process;

· They have a vested interest in making sure the CVA is a success; and

· The returns are likely to be greater in a CVA than an Administration or Liquidation , when often there is little chance of recouping any of the money owed to them.

So, all is not lost.  The option is there and a CVA could be the difference between the future success of the business and its terminal demise.

For more information please contact me.  Remember, asking for professional advice at an early stage will provide you with more options.

Statistics showing insolvencies in the first quarter of 2011 were published on 6 May 2011 by the Insolvency Service.

http://www.insolvency.gov.uk/otherinformation/statistics/201105/index.htm?goback=%2Egde_2512019_member_53186449%2Egmp_2512019%2Egde_2512019_member_53121372

To view the detailed tables from 2001 to 2011 please see the link below

http://www.insolvency.gov.uk/otherinformation/statistics/201105/index.htm?goback=%

Directors of owner managed businesses have become much more aware of the risks of wrongful trading.  However, trading while insolvent and wrongful trading are often confused and in the continuing difficult trading conditions, it is worth focusing on the true meaning and risks of wrongful trading.

Wrongful trading is where, prior to the company going into insolvent liquidation, the director(s) knew or ought to have realised that there was no prospect of the company avoiding insolvent liquidation.  Claims can only be brought by a liquidator who may apply to Court for an Order that a director is liable to make a contribution to the assets of the company.  The Court is likely to make an order unless it is persuaded the director took every step he ought to have taken with a view to minimising the potential loss to creditors.

There are two tests for Insolvency defined within the legislation which can be broadly identified by asking two question.  (1) Do the company assets exceed the liabilities, and/or (2) Can the company pay its debts as they fall due e.g. the balance sheet test and cash flow test respectively.  If the answer to either of these is ‘no’, then there is a strong likelihood the company is Insolvent.

The conduct of the directors of companies in financial difficulty and actions taken by them at that time will be subject to scrutiny by the liquidator, with the benefit of hindsight.  Directors can help themselves pass the wrongful trading test by taking reasonable steps which should include:

General conduct at all times

· Ensuring that regular up to date financial information is available to the board

· Discussing that financial information regularly and acting up any adverse trends shown

· Recognising and utilising the skills, knowledge and experience of individual board members

· Seeking and acting upon professional advice from the company’s accountants, lawyers and other specialist advisers

· Documenting strategic decisions and the broad reasons for these

Specific conduct once insolvency is identified

· Not utilising customer deposits or Crown monies to finance trading

· Minimising new trade credit taken only to that necessary to preserve the business as a going concern

· Treating all creditors fairly and equally and not preferring specific creditors

· Preserving and protecting the assets of the business for the benefit of creditors in any future insolvency liquidation

· Seeking advice from an insolvency practitioner.

For more information please contact me.  Remember, asking for professional advice at an early stage will provide you with more options.

The Employment Appeal Tribunal (EAT) has held that employees will automatically transfer to the buyer in the sale of a business by an administrator, even if the sale is a pre-packaged sale.

Employees of all or part of a business sold in administration will therefore be afforded all relevant protection against unfair dismissal.

The decision in OTG Ltd v Barke, Luke and other lends further weight to the published BERR guidance which states that the Secretary of State considers that the Regulations will always apply in relation to a relevant transfer that is made in the context of an administration.

Such a transfer is a 'relevant transfer’ within the meaning of Regulation 3 of TUPE.  By Regulation 4, in the case of a 'relevant transfer', both the contracts of employment of the employees and the accrued liabilities to the employees of the company in administration pass to the buyer of the undertaking. Regulation 7 sets out that the buyer also inherits liabilities relating to employees dismissed prior to and in connection with the transfer.

This pits the need to foster a ‘rescue culture’ against the need to protect the rights of employees in insolvency processes.

As always timely advice is the key.

For more information please contact Mark Bowen.