Tuesday 30 December 2008.
Insolvency Service (National)

Creditors get better access to information in company failures

New rules that will require administrators to reveal to creditors the name of the buyer and the price paid when carrying out a 'pre-pack' administration will be introduced on 1st January 09.

Pre-pack administrations tend to be used where commercial pressures require urgent action. The new rules (Statement of Insolvency Practice (SIP) number 16) will require administrators to explain to creditors the background to their appointment and the reasons why they considered that a "pre-pack" sale would be the best outcome for creditors. Administrators will not only have to reveal the name of the purchaser of the business, they will also have to provide details of any connection that the purchaser had with the former directors or shareholders and the price paid.

Graham Horne, Deputy Chief Executive, of the Insolvency Service said: "The Insolvency Service welcomes the greater transparency that the new rules relating to "pre-pack" administrations will provide. Creditors will have better access to information about the new owners of a troubled business providing them with greater clarity about the administration process."

He went on to say: "Pre-packs can be a good thing, as we agree with the view that in some circumstances they will improve returns to creditors. In addition they can help to preserve the business of the failed company, thereby saving jobs. However, we will be working closely with the bodies that regulate administrators to ensure that SIP 16 is put into practice.

We will also be looking to use our enforcement powers to clamp down on any directors who misuse the administration process to disadvantage creditors or seek to gain benefit for themselves. We are happy to hear from any creditors who consider they have been disadvantaged."

Directors of insolvent companies, which includes those going through administration, can be banned by the Insolvency Service for a period of between 2 to 15 years if their conduct in the period leading to the insolvency proceedings is considered to be unfit.

Anyone who wishes to complain about a pre-pack administration or considers that they have been unduly disadvantaged by an administration (or other corporate insolvency process) can telephone The Insolvency Service hotline on 0845 601 3546 or email: enforcement@insolvency.gsi.gov.uk

Notes to editors
1. Further information and a full copy of the SIP can be found on the Insolvency Service website http://www.insolvency.gov.uk

Ends
Client ref Ins/Coms/40
COI ref 169228P

Bradley James Group

Friday 12 December 2008
Insolvency Service (National)

Fundraisers Pruned

Two Scottish-based companies that purported to raise substantial sums of money to help alleviate the suffering of children diagnosed with cancer have been wound up in the Court of Session in Edinburgh following an investigation by the Companies Investigation Branch (CIB) of the Insolvency Service.

CIB's investigation found that The Goodwill Childrens Cancer Company (a company limited by guarantee) and Rosebuds (UK) Ltd had consecutively carried on the same or substantially similar fundraising businesses from about January 2004 onwards.

This involved the door-to-door sale of a "Newsletter", with a cover price of £3, throughout Scotland's central belt. The newsletters variously claimed that either £1m (Goodwill) or £3/4m (Rosebuds) had been donated from the proceeds of sale "to help children with cancer related illnesses." However, CIB found that the companies had only raised a total of about £250,000 between them and that, of that sum, almost £190,000 had been extracted by the directors in the form of remuneration and expenses, leaving only £22,250 to be paid out to good causes.

Furthermore, CIB's enquiry also established that purchasers of the newsletter were told that their names would be entered into a monthly draw carrying a cash prize, but that only 27 of a potential 57 prizes had ever been awarded and that some of those were paid to individuals who were connected to the companies or their directors. A review of the companies' financial records carried out by CIB concluded that they were not fit for purpose and that it was therefore impossible to verify that all sums donated to the companies had been accounted for.

NOTES TO EDITORS
1. The registered office of The Goodwill Childrens Cancer Company, which was incorporated on 8 October 2003, is at 22 Manor Street, Falkirk FK1 1NH, whilst that of Rosebuds (UK) Ltd, incorporated on 2 June 2006, is at 11 Old School Court, Linlithgow, West Lothian EH49 7AW, which is also the address from which it traded.

2. The petitions were both presented on 30th October 2008 under s124A of the Insolvency Act 1986. Goodwill was compulsorily wound up by the Court on 2nd December 2008 and Rosebuds was similarly wound up on 5th December 2008.

3. The Insolvency Service carries out confidential enquiries on behalf of the Secretary of State for Business, Enterprise & Regulatory Reform through Companies Investigation Branch.

4. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice.

5. All public enquiries concerning the affairs of the companies should be made to the Interim Liquidator: William Cleghorn, Kinetic Partners, 21 York Place, Edinburgh, EH1 3EN.

6. Further information about the work of The Insolvency Service is available from http://www.insolvency.gov.uk

Client ref Ins/Coms/039
COI ref 168806P

Bradley James Group

Wednesday 10 December 2008
Insolvency Service (National)

Second director disqualified in Branded Leisure plc

The second of two directors of Branded Leisure plc has been disqualified following an investigation by Companies Investigation Branch of the Insolvency Service. In November this year, Mr Renwick Haddow became the second director of the company to receive an 8-year disqualification.

This follows the similar disqualification of his fellow director Mr David Humphrey in May 2007.

Mr David Humphrey and Mr Renwick Haddow were respectively managing director and finance director of Branded Leisure plc ("the company"). The company had intended to operate a number of "Cosmopolitan Spirit" venues aimed primarily at attracting women between the ages of 18-35. At each venue there would be provided to the clientele under one roof important elements of the lifestyle of the target market, namely healthy food, drink and beauty treatment.

The licence agreement the company had signed required the regular opening of new units. In fact only one in Manchester opened to the public. This was after it incurred a substantial overrun in capital expenditure and once opened, signally failed to achieve forecast sales revenue. The company shortly afterwards ceased trading and was placed in a Creditors Voluntary Arrangement (CVA).

Funds were raised from share sales, including a public offer and also from an equity investment made by an Enterprise Investment Scheme. A quote for the shares was obtained on the OFEX market (now Plus Markets). As a result of the cessation of trading, the company's shareholders lost all their investment and creditors amounting to almost £2m were unpaid.

The Schedule of Unfit Conduct which formed a part of the Disqualification Undertaking given by Mr Haddow included the following:
* That he caused and/or allowed the company to pay £25,000 in commission in respect of shares which raised £100,000, thereby breaching sections 97 and 98 of the Companies Act 1985.

* That he caused and/or allowed the company to enter into and continue substantial building expenditure commitments with (inter alia): no proper contractual arrangements in place with either the designers or the builders; no proper costings; no proper cost control; no proper cashflow or management account information and no proper ongoing supervision.

* That he caused and/or allowed the company to make inaccurate and misleading announcements on OFEX Newstrack, the shares news dissemination service for OFEX/Plus Markets-quoted companies, in particular, as to the progress of the company's building work, sales performance of the company, and the financial performance of the company.

* That he caused and/or allowed the company to wrongly represent to Bank of Scotland that the Company had adhered to the conditions of the Licence agreement with Hearst, when in fact it had not.

* That he caused and/or allowed the company to make false representations in a Board minute dated 7 January 2003, in particular as to the financial position and prospects of the company, which caused investors to lose £500,000 in the Catalyst EIS1 Fund.

* That he caused the Company to misrepresent to the bailiff the true ownership position as to plant and equipment at the Manchester premises.

* That he caused and/or allowed the company not to keep and/or not to preserve proper accounting records, in breach of sections 221 and/or 222 of the Companies Act 1985.

Notes to Editors
1. David Humphrey of Barn End, Wymondley Road Letchworth, Herts was disqualified from being a company director for a period of 8 years commencing on 10 May 2007. Renwick Haddow of Batcombe, Shepton Mallet, Somerset was disqualified from being a company director for a period of 8 years commencing on 20 November 2008. Both gave undertakings not to be a director of a company in terms of the Company Director Disqualification Act 1986.

2. The Schedule of Unfit Conduct which formed a part of the Disqualification Undertaking given by Mr Humphrey included the following:
* That he caused and/or allowed the company to enter into and continue substantial building expenditure commitments with (inter alia): no proper contractual arrangements in place with either the designers or the builders; no proper costings; no proper cost control; no proper cashflow or management account information and no proper ongoing supervision.
* That he caused and/or allowed the company to make inaccurate and misleading announcements on OFEX Newstrack, the shares news dissemination service for OFEX/Plus Markets-quoted companies, in particular, as to the progress of the company's building work, sales performance of the company, and the financial performance of the company.

* That he caused and/or allowed the company to make false representations in a Board minute dated 7 January 2003, in particular as to the financial position and prospects of the company, which caused investors to lose £500,000 in the Catalyst EIS1 Fund.
* That he caused and/or allowed the company not to keep and/or not to preserve proper accounting records, in breach of sections 221 and/or 222 of the Companies Act 1985.

3. Companies Investigation Branch ("CIB"), part of the Insolvency Service, carries out confidential enquiries under Section 447 of the Companies Act 1985 ("s447") and, where necessary, takes further action in the name of the Secretary of State. This can include winding up proceedings in the public interest or disqualification proceedings against directors under Section 8 of the Company Directors Disqualification Act 1986. Branded Leisure plc was investigated under s447 and this provided evidence to support the disqualification proceedings against both Mr Humphrey and Mr Haddow.

4. Section 8 of the Company Directors Disqualification Act 1986 allows the Court to make a disqualification order of up to 15 years for unfit conduct. On 2 April 2001, amendments were introduced by the Insolvency Act 2000 allowing directors, with the agreement of the Secretary of State, to avoid the need for a Court hearing by offering an acceptable disqualification undertaking. This has the same legal effect as a disqualification order made by the Court and usually includes a schedule identifying the director's unfit conduct.
The consequences of breaching a disqualification undertaking are the same as those for breaching a disqualification order; a fine or imprisonment for up to two years.

5. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver, to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice.

6. Companies House maintains a public register of disqualified directors that can be viewed at http://www.companieshouse.gov.uk.

7. Members of the public who think that they know of any person who is acting in breach of a Disqualification Order or Undertaking should report that person's details to The Insolvency Service Enforcement Hotline on 0845 601 3546 (24 hour message service).

8. For further information about Companies Investigation Branch, the Insolvency Service and disqualifications see: http://www.insolvency.gov.uk

Client ref Ins/Coms 38
COI ref 168709P

Bradley James Group

Thursday 4 December 2008
Insolvency Service (National)

Connected trio of companies taken out of circulation

Three companies who benefited from 'boiler room' share selling activities have been wound up in the High Court following an investigation by the Companies Investigation Branch ("CIB") of the Insolvency Service. Shares in Fingerpin International plc ("Fingerpin plc"), a company who acquired the business of its predecessor Fingerpin Ltd ("Fingerpin") when that company ceased to trade due to mounting debts, were sold to members of the public through a network of non Financial Services Authority ("FSA") authorised offshore share selling agents.

These included European Investment Group, a broker whose unauthorised status is subject to an FSA alert.

The share selling agents, commonly referred to as 'boiler room operators', sold 8p stock in Fingerpin plc for a typical price of £1.30 per share, and in the process pocketed most of the remaining balance of £1.22 per share in commissions and fees. Some of those fees were received by TDR Consulting Limited ("TDR"), the UK based agent responsible for collecting and banking Fingerpin plc share sale proceeds.

The use of TDR to bank sales proceeds was a sales tactic used in part to give assurances to members of the public that they were dealing with UK based businesses. Fingerpin had been set up to develop biometrics software that would allow fingerprint sequencing to be used as a security access device as an alternative to using passwords.

The company did not achieve any successful commercial exploitation of this.

After Fingerpin spent £500,000 of funds raised through a network of investors, an agreement was entered into with GKM Investment Holdings Limited ("GKM") in an attempt to raise further working capital. It was claimed that GKM was registered in the British Virgin Islands, although no company of that name has ever been registered there.

The investigation found that TDR had received over £763,000 from members of the public who had purchased Fingerpin plc shares through unauthorised share selling agents. Of this, only £31,000, or 4%, found its way to the Fingerpin companies.

Fingerpin plc had ceased trading by September 2007, following its eviction from trading premises at Brindley Place, Birmingham. It left a trail of 350 shareholders together with trade and Crown creditors in its wake, none of whom had been notified at the time or subsequently that the company had ceased to trade.

NOTES TO EDITORS
1. The registered office of the Fingerpin companies is an accommodation address as 29th Floor, One Canada Square, Canary Wharf, London, E14 5DY. The registered office of TDR is at 80 New Hampton Lofts, 99 Branston Street, Birmingham, B18 6BG.

2. The petitions against all three companies were presented on 3rd October 2008 under s124A of the Insolvency Act 1986. The companies were compulsorily wound up by the High Court on 26th November 2008.

3. The Insolvency Service carries out confidential enquiries on behalf of the Secretary of State for BERR through Companies Investigation Branch.

4. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice.

5. All public enquiries concerning the affairs of the company should be made to the Official Receiver at Public Interest Unit, The Insolvency Service, 21 Bloomsbury Street, London WC1B 3SS. Public Enquiries 0207 637 1110. Email: piu@insolvency.gsi.gov.uk

6. Further information about the work of The Insolvency Service is available from http://www.insolvency.gov.uk Insolvency Service, 21 Bloomsbury Street, London, WC1B 3QW

7. Media Enquiries should be directed to: Lorna Dennis, Communications Manager, or Ade Daramy, Press Officer, Insolvency Service, 21 Bloomsbury Street, London, WC1B 3QW.

Client ref Ins/Coms/36
COI ref 168470P

Bradley James Group

Thursday 27 November 2008
Insolvency Service (National)

Hajj tour company fails its pilgrims

A Luton based religious pilgrimage company has been wound up in the High Court following an investigation by Companies Investigation Branch.

Go4 Hajj & Umrah Tours Limited organised religious pilgrimages to Mecca and Medina in Saudi Arabia, known as Hajj. Hajj is one of the five pillars of Islam, a trip that every Muslim must undertake at least once in their lives and takes place at a specific period during the Islamic calendar. In 2007, this period was between 17 and 21 December.

The company commenced business in August 2005 and obtained an Air Travel Organiser's Licence (ATOL) in March 2006, which was renewed in 2007. It started marketing Hajj trips for 2007 in June 2007. A website was established, advertising material was sent out and by the end of October 2007, the trips offered by the Company were fully booked with 101 pilgrims.

The company had advertised a two-week travel package and a three-week package. The three-week package was due to depart on 5 December 2007 and was booked by 38 customers, at a cost of £3,500-£4,450 (depending on the number of people sharing a room).

The two-week package was due to depart on 12 December 2007, and was booked by 63 customers, at a cost of approximately £3,500-£4,195. However, due to changes to the programme and visa difficulties, only 30 clients travelled in the first group.

No one travelled in the second group as the company was unable to supply the proper Hajj visas for them.

At a hearing on 19 November 2008, the Court heard that Go4 Hajj & Umrah Tours Limited seriously misled its customers. It had claimed that all its Hajj travel packages included guaranteed visas and Hajj drafts as required by the Ministry of Hajj. In fact, neither the company nor its officers were granted status as a Hajj organiser by the Saudi authorities and the company was unable to obtain visas from the authorities.

Even those customers booked on the first package who were able to travel on visas obtained via a "grey market", suffered as the services provided fell short of those promised in the company's promotional material. In particular, the company claimed that:
* The package included ground transportation on "private air conditioned coaches" or "super deluxe air-conditioned buses". In fact, customers were transported in standard government buses.

* There would be "excellent and dedicated tents in Mina close to the Jamarat" and emphasised that the "private air conditioned tents" were in a "private camp only 100-120 metres from Jamarat". In fact, the tents provided by the company were in a general camp more than 3.5km away.

* Religious guides would be constantly present and an educational programme would be maintained throughout the tour including doctors and "several Imam Guides and scholars that offer educational programs and daily lectures throughout the trip". In fact, the company did not provide doctors, Imams or guides.

* Flights would be on Emirates Airlines or Saudi Airlines and would go direct from London to Madinah. In fact, flights were on Gulf Air via Bahrain and/or Jeddah.

NOTES TO EDITORS
1. Go4 Hajj and Umrah Tours Limited was incorporated in January 2005. Its registered office and principal trading address is at Balfour House, 50 Guildford Street, Luton, Bedfordshire LU1 2PA.

2. The petition to wind up the company in the public interest was presented on 28 August 2008 under Section 124A of the Insolvency Act 1986. The company was compulsorily wound up by the Court 19 November 2008.

3. Companies Investigation Branch is part of the Insolvency Service and carries out confidential enquiries on behalf of the Secretary of State for Business, Enterprise & Regulatory Reform.

4. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Service also authorises and regulates the insolvency profession, deals with disqualification of directors in corporate failures, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice.

5. All public enquiries concerning the affairs of the company should be made to the Official Receiver at Public Interest Unit, The Insolvency Service, 21 Bloomsbury Street, London WC1B 3SS. Public Enquiries 0207 637 1110.

6. Further information about the work of The Insolvency Service is available from http://www.insolvency.gov.uk
Client ref Ins/Coms/35
COI ref 168093P

Bradley James Group

Tuesday 25th November 2008
Insolvency Service (National)

New Ethical Code for Insolvency profession

All the bodies that authorise and regulate insolvency practitioners have agreed a new ethical code for their practitioners which will come into force in January 2009.

The 'Insolvency Ethical Code' (the Code) published by The Insolvency Service, has been designed to assist insolvency practitioners and their staff to undertake their work to high professional and ethical standards.

Based on the five fundamental principles of: integrity, objectivity, professional competence and due care, confidentiality and professional behaviour the Code provides a framework which applies to all aspects of an insolvency practitioner's professional work relating to, or that may lead to, an insolvency appointment.

The Code also provides specific guidance regarding pre-packaged administrations; the means of obtaining work; the use of specialist agents; and referral fees. Most insolvency practitioners are qualified accountants and the Code is aligned to a model Ethical Code adopted by the International Federation of Accountants.

Mike Chapman, Head of insolvency practitioner regulation at the Insolvency Service said: "Integrity and objectivity have always been fundamental principles which insolvency practitioners should apply in all aspects of their work.

The new Code will provide practitioners with clear consistent guidance on what they can and cannot do in their professional life and assist them to work to high professional and ethical standards".

IPs will be expected to take reasonable steps to identify any threats to compliance and with the fundamental principles. Breaches of the Code of Ethics may be taken into account by an IP's authorising body when assessing the IP's conduct.

Notes to Editors:
1. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Service also authorises and regulates the insolvency profession, deals with disqualification of directors in corporate failures, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice.

2. The Insolvency Code of Ethics has been approved by the Joint Insolvency Committee and adopted by all of the bodies that authorise and regulate insolvency practitioners. It provides a unified code of ethics for all Insolvency Practitioners (IPs) to which IPs, insolvents, creditors and others may refer.

3. Seven Professional Bodies have been recognised by the Secretary of State to authorise their members to be insolvency practitioners. They are:-
Institute of Chartered Accountants in England & Wales
Institute of Chartered Accountants of Scotland
Institute of Chartered Accountants in Ireland
Association of Chartered Certified Accountants
Law Society of England & Wales
Law Society of Scotland
The Insolvency Practitioners Association
Further information about the work of The Insolvency Service is available from http://www.insolvency.gov.uk

Client ref Ins/Coms/34
COI ref 167980P

Bradley James Group

Friday 21 November 2008
Insolvency Service (National)

Warranty runs out for satellite tv company

A company selling warranties for satellite television equipment has been wound-up by the high court following an investigation by Companies Investigation Branch of the Insolvency Service.

Satellite Protection Services Limited ("SPS") based in Norwich used the trading name of "Satellite Services" and operated a website called http://www.sat-serv.co.uk made unsolicited sales calls throughout the UK and Channel islands offering to repair or replace customers' satellite TV equipment in the event of breakdown in return for a renewable ongoing annual subscription of £60.

The company encouraged potential customers to believe that the calls came from Sky or that the company was closely associated with Sky. In fact the company had no connection with Sky.

Satellite Services failed to comply with relevant distance selling regulations when it failed to inform customers of their right to cancel their agreements within the statutory cooling off period, and did not provide customers with the registered name of the company or its registered or geographic address.

The company selected telephone numbers for its calls from telephone directories making no attempt to comply with Regulation 21 of The Privacy and Electronic Communications (EC Directive) 2003 which prohibits the making of unsolicited sales telephone calls to persons registered with the Telephone Preference Service.

Although the company offered to replace irreparable equipment with "new" equipment, in fact replacement equipment was not new but was second-hand or re-conditioned.

The combination of misleading phone calls, failure to inform customers of their statutory rights to cancel, failure to comply with regulations for the telephone preference service led to CIB presenting a petition to wind-up the company in the public interest and in the interim obtained an order appointing the Official Receiver as provisional liquidator of the company.

As provisional liquidator the Official Receiver put in place significant changes to the company's sales and administrative systems and this enabled the company's business to be continued under his supervision thereby preserving the assets of the company pending the hearing of the petition.

Information from the investigation was also referred to the Financial Services Authority ("FSA") on the basis that the company's warranty contract appeared to constitute a contract of insurance, and the company was not authorised to carry on insurance business.

After due consideration the FSA concluded that the company was engaging in regulated activity contrary to section 19 of the Financial Services and Markets Act 2000 ("FSMA") and supported the Secretary of State's application to have the company compulsorily wound-up in the public interest.

Notes to editors
1. SPS was incorporated in England on 11 April 2006. Its registered office was at 11 Murray Street, Camden, London NW1 9RE and it carried on business from Sackville Place, 44 Magdalen Street, Norwich NR3 1JU, though the address given to customers at the time of the investigation was PO Box 749, Bognor Regis, PO21 9BG.

2. The petition was presented on 28 November 2007 under s124A of the Insolvency Act 1986 following enquiries under Section 447 of the Companies Act 1985, and on 10 December 2007 the Official Receiver was appointed provisional liquidator of the company.

3. Following the FSA's conclusion that the company was engaging in regulated activity contrary to section 19 of the Financial Services and Markets Act 2000 ("FSMA") the Official Receiver sought directions from the Court as to the continuance of the company's business. The Court ordered that the company's business from then on should be limited to the servicing and renewal of existing contracts and that no new business should be taken on pending a full hearing of the petition and argument concerning the insurance question.

4. The FSA intervened in the winding-up proceedings pursuant to sections 371(1)(c) and 371(2)(a) of the FSMA

5. The company did not finally contest the making of the winding-up order.

6. Richard Toone and Kevin Murphy of Chantrey Vellacott DFK have been appointed joint liquidators of the company by the Secretary of State and will be responsible for realising and distributing the assets of the company.

7. The winding up order was made on 12 November 2008. However public announcement was delayed for a short period to enable the liquidator to write to the company's 8,500 current customers informing them of the position.

8. All public enquiries concerning the affairs of the company and the prospects of a dividend should be made to the liquidators at:
Russell Square House, 10-12 Russell Square, London, WC1B 5LF
Telephone: 020 7509 9260 ; Email: spsl@cvdfk.com

9. Further information about the work of The Insolvency Service is available from http://www.insolvency.gov.uk
Insolvency Service, 21 Bloomsbury Street, London, WC1B 3QW.

Client ref Ins/Coms/33
COI ref 167891P

Bradley James Group

Thursday 20 November 2008.
Insolvency Service (National)

Investigation shuts business development network

Three companies that offered a business network development service, which targeted unemployed former middle and senior management executives, have been wound up in the High Court following an investigation by the Companies Investigation Branch ("CIB") of the Insolvency Service.

CIB's investigation found that BNG-UK Limited ("BNG"), aided by group companies BNG Associates Limited ("BNG Associates") and Business Network Group (UK) Limited ("Business Network Group"), had promoted a business network scheme. Members of the supposed network, mainly small businesses, would benefit from preferential contract terms when dealing with other network members and dealing with 'Associate' members of the network, such as accountants and solicitors offering professional services.

The CIB investigation found no substantive evidence of the existence of any such network.

The main purpose of the scheme was to recruit 'Area Directors' to manage the network. BNG-UK targeted recruits through placing advertisements on the JobCentre Plus website and at nationwide JobCentre branches. Recruits were misled into believing that they were being offered salaried posts with salaries of up to £65,000. This was not the case in practice.

Recruits, in return for buying into the network scheme as Area Directors were expected to generate income through their own newly incorporated companies to attract in business network members and to offer strategic advice and management services to members.

Area Directors were asked to pay a licence fee to join the scheme, normally £18,000. The licence fee holder was said to be an American based principal licensor, whose identity was not revealed to any prospective and actual Area Director recruits.

The licence fee holder was actually one of the group companies, Business Network Group.

The Area Director recruits were informed that they would not have to fund the licence fee themselves as the fee would be mainly funded by their newly incorporated company applying for a small firm loan under the Small Firms Loan Guarantee Scheme ("SFLGS"). The SFLGS is a joint venture between the Department of Business Enterprise and Regulatory Reform ("BERR") and participating lending banks.

In the small number of cases where recruits did join the scheme and obtained loans for their companies via the SFLGS, all those companies have failed to generate any income via the network scheme, leaving the companies in potential default positions to the banks and the Government. In some cases the loans have been personally guaranteed by the recruits, who have found themselves once again out of work and now having to personally service their company loan repayments.

NOTES TO EDITORS
1. The registered office of Business Associates and Business Network Group is at 3 Caldene Avenue, Mytholmroyd, Hebden Bridge, West Yorkshire, HX7 5AF. The registered office of BNG-UK is at Endeavour House, Coopers End Road, Stansted, Essex, CM24 1SJ.

2. The petitions against all three companies were presented on 12th August 2008 under s124A of the Insolvency Act 1986. The companies were compulsorily wound up by the court on 12th November 2008.

3. The Insolvency Service carries out confidential enquiries on behalf of the Secretary of State for BERR through Companies Investigation Branch.

4. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice.

5. All public enquiries concerning the affairs of the company should be made to the Official Receiver at Public Interest Unit, The Insolvency Service, 21 Bloomsbury Street, London WC1B 3SS. Public Enquiries 0207 637 1110. Email: piu@insolvency.gsi.gov.uk

6. Further information about the work of The Insolvency Service is available from: http://www.insolvency.gov.uk

Client ref Ins/Coms/32
COI ref 167790P

Bradley James Group

Tuesday18 November 2008.
Insolvency Service (National)

Withdrawal of plans to introduce simplified IVAS and authorised persons

The Insolvency Service has withdrawn the legislative reform order which had been presented to Parliament to amend sections of the Insolvency Act 1986 aimed at simplifying IVAs (individual voluntary arrangements) and enabling authorised persons specialising in one form of voluntary arrangement i.e. individual or company.
Simplified Individual Voluntary Arrangements

The successful operation of the IVA Protocol has resulted in many of the desired improvements in the IVA marketplace being implemented without the need for further legislation, a position which has become clear within the past few months.

Those in the industry have worked hard to streamline the process for IVA approval with far fewer modifications now being proposed. It is now felt that the operation of the Protocol should continue to be monitored by the IVA Standing Committee, and that legislative change in this area should not be necessary as long as policy objectives are being met by non-statutory means.

Authorised Persons
We are still planning to take forward the proposal to amend the section in the Insolvency Act which provides for 'authorised persons', but it will not be possible to implement this change via a LRO, due to the particular requirements of this form of legislating.

We will therefore be looking to make this amendment via a Bill when a suitable opportunity arises.

Non Interim Order IVA
The proposal for reducing the requirements on Insolvency practitioners to file papers at court remains valid for introduction via a LRO. This will now be added to an LRO we are planning to bring forward in the New Year, rather than being taken forward as a single provision.

Further details can be found on the Insolvency Service website http://www.insolvency.gov.uk

Contacts
Insolvency Service Press Office
T: 020 7637 6279

Insolvency Service Policy on Corporate and Personal Insolvency
T: 020 7291 6747
Statement
Client ref SIVA Statement
COI ref 167690P

Bradley James Group

Friday 7 November 2008
STATISTICS RELEASE: INSOLVENCIES IN THE THIRD QUARTER 2008

Statistics showing insolvencies in the third quarter of 2008 are published today (7 November) by The Insolvency Service.

COMPANY INSOLVENCIES

There were 4,001 compulsory liquidations and creditors’ voluntary liquidations in total in England and Wales in the third quarter of 2008 (on a seasonally adjusted basis). This was an increase of 10.5% on the previous quarter and an increase of 26.3% on the same period a year ago.

This was made up of 1,483 compulsory liquidations (which are up 10.9% on the previous quarter and 16.1% on the corresponding quarter of the previous year), and 2,518 creditors voluntary liquidations (which are up 10.2% on the previous quarter and 33.2% on the corresponding quarter of the previous year).

In the twelve months ending Q3 2008, 0.6% of active companies went into liquidation, the same as the previous quarter and the corresponding quarter of 2007.

Additionally, there were 1,444 other corporate insolvencies in the third quarter of 2008 (not seasonally adjusted) comprising 270 receiverships, 1,007 administrations and 167 company voluntary arrangements. In total these represented an increase of 64.7% on the same period a year ago.

Note: The figures in Table II are not seasonally adjusted and are not, therefore, on the same basis as the headline figures in Table I. The accompanying detailed tables also include the non-seasonally adjusted series for corporate liquidations.

INDIVIDUAL INSOLVENCIES

There were 27,087 individual insolvencies in England and Wales in the third quarter of 2008 on a seasonally adjusted basis. This was an increase of 8.8% on the previous quarter and an increase of 4.6% on the same period a year ago.

This was made up of 17,341 bankruptcies (which were up 12.1% on the previous quarter and 9.5% on the corresponding quarter of the previous year), and 9,746 Individual Voluntary Arrangements (IVAs), (which were up 3.3% on the previous quarter but down 3.1% on the corresponding quarter of the previous year).

For bankruptcy orders there has been a pronounced shift towards debtor’s petition bankruptcies and away from creditor’s petitions in recent years. In the third quarter of 2008, 83.4% were made on the petition of the debtor, a similar level to that seen for 2006 and 2007 as a whole.

The percentage of bankruptcy orders involving trading debts (self-employed bankruptcies) has fallen from 70% in 1990 (the earliest for which reliable figures exist) to 11.2% in the second quarter of 2008 (third quarter 2008 figures for trading-related bankruptcies are not yet available). It should be noted, however, that figures for 2007 onwards are based on a revised classification and are not entirely consistent with earlier years figures.

INSOLVENCIES IN SCOTLAND AND NORTHERN IRELAND

The following tables present recent trends in insolvencies in Scotland and Northern Ireland, complementing those for England and Wales above (longer series back to 1998 are presented in the accompanying detailed tables).

Notes to Editors

1. The official Insolvency Statistics are the most comprehensive record of the number of corporate and individual insolvencies in England and Wales. Insolvencies in Scotland and Northern Ireland are also included, but are shown separately as they are covered by separate legislation, there are some differences in definition, and policy responsibility for them lies within the devolved administrations.

2. The statistics for England and Wales are derived from administrative records of the department for Business Enterprise and Regulatory Reform (BERR), Insolvency Service and Companies House Executive Agencies. For Scotland, the company insolvency statistics are derived from administrative records at Companies House, Scotland. Figures for individual insolvencies in Scotland are sourced from the Office of the Accountant in Bankruptcy (AIB). The Northern Ireland statistics are derived from administrative records of the DETI Insolvency Service and Companies Registry. Generally speaking, numbers of cases are based on the date the insolvency procedure was registered on the administrative recording system, not on the date of the order or agreement.

3. Numbers of insolvencies are not directly comparable with official estimates of business stock, formations or closures. Statistics of business start-ups and closures that are directly comparable with each other have been assembled from VAT records and are published by BERR. The latest figures are those for 2006, and were issued in a BERR press notice on 14 November 2007. More detailed figures are available via the on-line database NOMIS. Additionally, analysis into the number of firms in the United Kingdom estimated the total number of businesses at the start of 2007 at 4.7 million.

4. The X12ARIMA program (developed by Statistics Canada) is used for the seasonal adjustment of the insolvency statistics for England and Wales, this being the recommended program within UK National Statistics. Seasonal adjustment is a process by which changes that are due to seasonal or other calendar influences are removed to produce a clearer picture of the underlying behaviour of the data series. The data series covering Scotland and Northern Ireland do not demonstrate consistent seasonality and only the raw (unadjusted) series are presented.

5. Insolvent companies entering liquidation in England & Wales and Scotland are dealt with under the Insolvency Act of 1986 and, in Northern Ireland, by the Insolvency (Northern Ireland) Order 1989. They can either be the subject of a compulsory liquidation (winding-up) order obtained from the court by a creditor, shareholder or director or themselves pass a resolution, subject to the approval of a creditors' meeting that the company be wound up voluntarily (creditors voluntary liquidations, registered at Companies House/Companies Registry). In either case they are said to have been wound-up, and numbers are given in Tables 1, 4 and 6. A third type of winding-up, members' voluntary liquidation, is not included because it does not involve insolvency.

6. The Insolvency Act 1986 and, in Northern Ireland, the Insolvency (Northern Ireland) Order 1989 also introduced the procedures of company administration orders and company voluntary arrangements (CVAs). The administration procedure gives a period of time during which creditors are restrained from taking action and a court appointed administrator puts forward proposals to deal with the company’s financial difficulties. The CVA procedure aids business by enabling a company in financial difficulty to come to a binding agreement with its creditors. These are listed separately under Table 3 for England and Wales and Table 5 for Scotland.

7. The Enterprise Act 2002 introduced revisions to the corporate administration procedures, replacing Part II of the Insolvency Act 1986 with Schedule B1. These include the introduction of additional entry routes into administration that do not require the making of an administration order and a streamlined process for Administrations whereby a company can in some circumstances be dissolved without recourse to liquidation. The primary objective of administration (and of CVAs) is the rescue of the company as a going concern. These provisions came into force on 15th September 2003 and Administrations under the Enterprise Act have been included on Tables 3 and 5 from Q3 2003 (dissolution follows 3 months after a notice is filed with the Registrar of Companies, if no objections are raised by the court). On 27th March 2006 the Insolvency (Northern Ireland) Order 2005 introduced similar revisions to the corporate administration procedures in Northern Ireland, replacing Part III of the Insolvency (Northern Ireland) Order 1989 with Schedule B1.

8. Since the Enterprise Act 2002, a number of these streamlined administrations have subsequently converted to a creditors’ voluntary liquidation. These liquidations in England and Wales are not included under the headline figures here or at Table 1, as they do not represent a new company entering into an insolvency procedure for the first time. For completeness, however, they are included under Table 3d. It is also possible for the outcome of an administration to be entry into a company voluntary arrangement or a compulsory liquidation, but these cases are not separately identifiable from Companies House’ information and will therefore be included within the new case figures for these procedures (the numbers involved are relatively few, compared to those entering CVL).

9. Receivership appointments comprise administrative receivers appointed under the 1986 Insolvency Act (and the 1989 Order for Northern Ireland) and certain other receiver appointments, for example under the Law of Property Act 1925 - due to the use of the same statutory documentation for different types of receivership, it is not possible to give a breakdown between them. Law of Property Act receivers are classed as Enforcement of Security and are not insolvency procedures under the Insolvency Act of 1986. For this reason levels of, and trends in, receivership appointments should be interpreted with caution. The provisions of the Enterprise Act 2002 [section 250] (Insolvency [Northern Ireland] Order 2005 [Article 5]) have made some changes to the procedures for administrative receivership.

10. Figures sourced from Companies House (E&W) were revised previously (where appropriate) between 2007 Q1 and 2008 Q1. This reflected inaccuracies identified in the counting of cases during validation following the move to a new IT system in February 2008. The most noticeable revisions were to receiverships (where some companies had been counted more than once); the rest of this series prior to 2007 is not yet available on a revised basis. However, it should also be noted that because the revised counts have been run against a live database, they do not exactly reflect the original numbers of new cases that would have been reported.

11. Individual insolvencies in England and Wales and in Northern Ireland are made up of bankruptcy orders and individual voluntary arrangements (IVAs). Insolvent individuals in England and Wales are dealt with mainly under the Insolvency Act 1986. A bankruptcy order is made on the petition of the debtor or one or more of his creditors when the court is satisfied that there is no prospect of the debt being paid. (Figures for bankruptcy orders include orders relating to the estates of deceased debtors). There are also individual voluntary arrangements (IVAs) and deeds of arrangement (the latter under the Deeds of Arrangement Act 1914), which enable debtors to come to an agreement with their creditors. Table 2 summarises the above procedures for England and Wales (IVAs and Deeds of Arrangement are included under a single column) and Table 2a provides bankruptcy orders further split by petition type. Changes to bankruptcy law in England and Wales introduced by the Enterprise Act 2002 came into force on 1 April 2004 – the Act made no changes to the existing individual voluntary arrangement regime.

12. Table 2b records numbers of Income Payments Orders (IPOs) and Income Payments Agreements (IPAs) where the bankrupt makes regular payments from surplus income towards his/her debts for a period of time, either by court order or by agreement. The figures record numbers of IPOs/IPAs made in each period, they do not, in general, relate to the date of the original bankruptcy order. Table 2b records a number of IPAs before Q2 2004 because the IPA provisions of the Enterprise Act 2002 (commenced on 1 April 2004) were applicable, upon commencement, to pre-commencement bankruptcies.

13. Insolvent individuals in Scotland (Table 4) are subject to sequestration (bankruptcy) or protected trust deeds under the Bankruptcy (Scotland) Act 1985 (as amended). This Act was amended by the Bankruptcy (Scotland) Act 1993. On April 1 2008 the Bankruptcy and Diligence etc. (Scotland) Act 2007 came into force making significant changes to some aspects of bankruptcy, debt relief and debt enforcement in Scotland. Most notably, as far as these statistics are concerned, it introduced a new route into bankruptcy for people with low income and low assets (LILA). The sequestration figures for Q2 2008 onwards include these new LILA cases; therefore trends in numbers of sequestrations before and after this date should be interpreted with care. Protected trust deeds are voluntary arrangements in Scotland, but although they fulfil much the same role as individual voluntary arrangements, there are important differences in the way they are set up and administered. Details of both sequestrations and protected trust deeds are found on the register of insolvencies, which is maintained by the Accountant in Bankruptcy. Further information about insolvency in Scotland can be found on the Accountant's website at www.aib.gov.uk. It should also be noted that from April 2008, personal insolvency statistics have been extracted from information published on the AIB website; whereas previously it was supplied on request, tailored to our publication requirements.

14. Insolvent individuals in Northern Ireland are dealt with under the Insolvency (Northern Ireland) Order 1989 and are recorded under Table 6. On 27 March 2006 the Insolvency (Northern Ireland) Order 2005 came into operation and implemented similar changes to bankruptcy procedures as the Enterprise Act 2002 introduced in England and Wales. Further information about insolvency in Northern Ireland can be found on their website at www.insolvencyservice.detini.gov.uk.

15. Under the Insolvency Act 1986 and the Insolvent Partnerships Order and, in Northern Ireland, the Insolvency (Northern Ireland) Order 1989 and the Insolvent Partnerships Order (Northern Ireland) 1995, insolvent partnerships may be wound up as an unregistered company or administered following bankruptcy orders against the partners. Insolvent Partnerships can also enter administration or a voluntary arrangement.

16. Company insolvencies and bankruptcy orders (relating to the self-employed) in England and Wales broken down by industry are available from Q3 2007 according to the Standard Industrial Classification (SIC) 2003, bringing them into line with other official statistics. Industry breakdowns for compulsory liquidations and bankruptcies (only) are only available one quarter in arrears of the headline series. Figures according to the previously used Insolvency Trade Classification (ITC) are available up to Q3 2006, but information by industry is not available for the period between Q4 2006 to Q2 2007 (inclusive) on either classification. Additionally, the broad split of bankruptcy orders into self-employed and other individuals is available under Table 2a.

17. Company liquidations in Scotland are available from Q1 2007 based on the SIC2003 industry breakdown and these can be found in Tables 4a and 4b. Earlier data are available separately classified according to the Insolvency Trade Classification (ITC).

Information concerning insolvency legislation, policy evaluation and research in England and Wales may be obtained from the Insolvency Service website at www.insolvency.gov.uk.

Bradley James Group

Wednesday 5 November 2008
Insolvency Service (National)

CIB disconnects mobile phone retailer

A Midlands based company that offered cash back incentives to members of the public to encourage them to sign up for expensive mobile phone contracts has been wound up in the High Court following an investigation by the Companies Investigation Branch (CIB) of the Insolvency Service.

CIB's investigation found that First Contact Mobiles Ltd, which traded principally via the Internet, had induced customers to enter into contracts offering cash back, but had failed to pay those cash back sums, or even to keep a separate account of those monies, which were to be paid from the company's own commission income.

Further, despite the fact that many of the cash back deals were offered at a loss to the company, it did not record or analyse its cash back liabilities, but instead relied on commission received from new sales to enable it to meet its existing obligations, which could amount to more than £1/4m.

As a result of the incentives offered, many customers had entered into multiple contracts or had agreed to a monthly tariff that was inappropriate to their needs.

Furthermore, the enquiry also established that the company had ceased to trade in or around December 2007 and had then been abandoned by its directors, that it had failed to maintain adequate accounting records or to account properly for VAT, that it was in arrears with statutory filings and that it was insolvent.

The company had also failed to observe a voluntary industry Code of Practice introduced by Ofcom in July 2007.

NOTES TO EDITORS
1. The registered office of First Contact Mobiles Ltd, which was incorporated on 17 May 2005, is at 31 North Lane, Headingley, Leeds, LS6 3HW.

2. The petition against First Contact Mobiles Ltd was presented on 22nd September 2008 under s124A of the Insolvency Act 1986. The company was compulsorily wound up by the court on 4th November 2008.

3. The Insolvency Service carries out confidential enquiries on behalf of the Secretary of State for Business, Enterprise & Regulatory Reform through Companies Investigation Branch.

4. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice.

5. Ofcom intends to introduce a 'General Condition' in January 2009, 2007specifically to combat mis-selling. This will replace the current voluntary Code of Practice, which has been in place since July. A 'General Condition' is a legally enforceable rule that a communications provider must adhere to under the Communications Act 2003. The penalty for breaching a General Condition can be a fine of up to a maximum of 10 per cent of relevant turnover.

The General Condition is being introduced as result of the increased number of complaints about mobile mis-selling and cash back issues. See: http://www.ofcom.org.uk/media/news/2008/03/nr_20080318

6. All public enquiries concerning the affairs of the companies should be made to: The Official Receiver, Public Interest Unit, PO Box 326, 17 - 21 Chorlton Street, Manchester, M60 3ZZ. Tele: 0161 934 4182

Email: piu.north@insolvency.gsi.gov.uk

7. Further information about the work of The Insolvency Service is available from http://www.insolvency.gov.uk

Client ref Ins/Coms/30
COI ref 167204P

Bradley James Group

Wednesday 29 October 2008
Insolvency Service (National)

Insolvency "specialist" wound up

A company offering advice and services to those in financial hardship has been wound-up by the High Court in Liverpool following an investigation by the Companies Investigation Branch (CIB) of the Insolvency Service. Abacrombie & Co Limited, based in Sheffield and operating throughout England & Wales commenced trading in 2003 purportedly carrying on business as "Insolvency Specialists" offering insolvency advice to individuals and directors of limited companies. During its trading it gave insolvency advice to around 530 clients.

In the case of individuals, for a minimum fee of £1,500 plus VAT, the company stated that it would deal with a debtor's creditors, complete the bankruptcy petition, attend at Court with the debtor and attend with the debtor at any subsequently arranged meeting with the Official Receiver. I

n practice, the company charged individuals up to £44,000 for these services and, in the period of its trading, took fees in excess of £2 million.

CIB's investigation found that there was a lack of commercial benefit to the company's clients, that the company charged excessive fees and lacked any clear charging structure.

It was also found that the company operated an inappropriate banking structure and the business model operated by the company was unsustainable. In addition, the company operated with a lack of probity involving inappropriate transactions and advice and there was a lack of transparency as to who was controlling the company.

In making the Winding-up Order the Court found, amongst other things, that:-
* arrangements made by the company on behalf of debtors to dispose of the debtor's interest in property, subverted the proper functioning of the law and procedures of bankruptcy

* the overwhelming factor in determining the fees charged in each case was the amount of money available and held by the company
* the company's reliance on receipts from new clients to meet payments due in respect of existing clients was unacceptable
* documents were backdated to deceive the Official Receiver or trustee in bankruptcy
* advice given by the company to a debtor was wrong with the result that assets were dissipated to the detriment of his creditors generally and of the proper administration of the estate
* the company's stated aim to assist the debtor and their spouses or partners by minimising the debtor' interests in their jointly owned properties, combined with the lack of understanding of the applicable legal principles on the part of
Nicholas Buchanan, a director, and the other consultants, posed a serious risk to the proper administration of the debtors' bankruptcies
* Mr Buchanan improperly used the company's bank account as his own, posing a real risk to the solvency of the company and
* That there were serious issues including dishonesty in some instances such as back-dating off documents which fully justified the making of the Order Stephen Speed, Chief Executive of the Insolvency Service said, those running companies which exploit people in financial difficulty and abuse the insolvency regime should be aware that we can and will investigate them and, where necessary, ask the Court to close them down".

NOTES TO EDITORS
1. The registered office and trading address of Abacrombie & Co Limited was at 180 London Road, Sheffield, South Yorkshire, S2 4LT. The company was incorporated on 20 September 2002.

2. The petition to wind-up the company in the public interest was presented on 22 August 2008 under the provisions of s124A of the Insolvency Act 1986 following investigations carried out under section 447 of the Companies Act 1985 by the Companies Investigation Branch of the Insolvency Service. The Winding-up Order was made on 23 October 2008.

3. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent.

4. The Insolvency Service carries out confidential enquiries on behalf of the Secretary of State for Business Enterprise and Regulatory Reform through Companies Investigation Branch. The Service also authorizes and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice.

5. The Consumer Credit Act 1974 (the Act) requires debt management companies to be licensed by the Office of Fair Trading (OFT). Abacrombie & Co Ltd previously held a consumer credit licence (number 537807) which lapsed on 20 June 2008. The OFT has been reviewing its application for a new consumer credit licence which was made on 21 July 2008 As a result of the Insolvency Service's action to wind-up the company, the application will automatically be made of 'no effect'.

6. All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit, PO Box 326, 17 - 21 Chorlton Street, Manchester, M60 3ZZ. Tele: 0161 934 4182 Email: piu.north@insolvency.gsi.gov.uk

7. Further information about the work of The Insolvency Service is available from http://www.insolvency.gov.uk Insolvency Service, 21 Bloomsbury Street, London, WC1B 3QW
Client ref Ins/Coms/29
COI ref 166908P

Bradley James Group

Friday 26 September 2008
Insolvency Service (National)

Vehicle matching company is far from expert

An Islington based "vehicle matching" company has been wound up in the High Court following an investigation by Companies Investigation Branch.

Motor Expert Limited claimed that it was able to connect up, or match-up, private buyers and sellers of used vehicles, who registered with it, thereby saving them time and money. It cold-called people who had already advertised in a local newspaper, a car magazine or the Internet whilst maintaining a website database containing the details of all the buyers and sellers that it had persuaded to register. It only charged sellers who were asked to pay either £79.99 or £99.99. It began trading in July 2007 and by the beginning of March 2008 had made sales of approximately £120,000. It was managed by its two director-shareholders, who were responsible for setting it up and who had both previously worked at Autobuyer.co.uk Limited, another vehicle matching company investigated by Companies Investigation Branch and wound up in the public interest.

Fundamental to Motor Expert's business was its sales technique. It did not advertise itself openly and did not wait for people to come to it. It sought out people who might have been persuaded that it could help with selling or buying a used vehicle and did so by instructing telesales workers to cold-call advertisers to tell them about Motor Expert.

The telephone scripts utilised by telesales workers contained statements such as: Motor Expert already had details of buyers looking to buy a seller's type of vehicle and that those buyers were local to the seller (or could be found within their region); Motor Expert had a high success rate of matching within the first 7 days; Motor Expert was constantly receiving buyer enquiries; Motor Expert was calling the seller because of the huge response for their type of vehicle; and Motor Expert would send out details to potential buyers within an hour of the seller registering.

Sellers were also told that they would receive a refund of their fee if the buyer of their vehicle bought with finance arranged by Motor Expert and that it would keep trying to match them up for as long as it took until the vehicle was sold. It hinted strongly that a refund was likely by claiming that 80% of the market took such finance and by stressing that as a licensed credit broker, Motor Expert earned revenue from the commission paid for arranging such finance. Such statements and claims were, however, dishonest and misleading.

Motor Expert had far fewer details of buyers on its website database than sellers. It had registered 59 sellers in respect of 31 types of vehicle in relation to which it had not registered any potential buyers at all. It had registered 1,134 sellers in respect of 31 types of vehicle in relation to which it registered only 589 buyers and, moreover, had registered more sellers than buyers in the case of each of those vehicle types.

Even in the case of the vehicle type in respect of which Motor Expert had registered more buyers than sellers, and had the highest ratio of buyers to sellers (still less than 2 to 1), virtually none of the buyers registered was a potential match by reference to both their location and the price they wished to pay. In the circumstances, claims that Motor Expert already had details of local buyers looking to buy the seller's type of vehicle, that it was constantly receiving buyer enquiries, that it was contacting the seller because of the huge response for their type of vehicle or that it would send out details of sellers' vehicles to potential buyers within an hour of registration were entirely unjustified whilst its offer to keep on trying to achieve a match-up was, logically, a hollow one.

Motor Expert also had no information or records regarding the number of match-ups it had achieved, no information or records regarding the number of notifications it had provided to buyers and no information or records regarding the number of sellers that had sold their vehicles using Motor Expert. Moreover, it was clear that it had never arranged finance for any of its registered buyers or received any commission from such finance or elsewhere. Its claim about having a high success rate of matching within the first 7 days was unfounded and its guarantee to refund sellers their fee if a buyer obtained finance through Motor Expert was deliberately misleading. Motor Expert's whole approach to its customers involved deceit and its whole business was dishonest.

NOTES TO EDITORS

1. Motor Expert Limited was incorporated in January 2007. Its registered office is at Langley House, Park Road, East Finchley, London N2 8EX. The company carried on business from premises at The Omnibus Business Centre, 39-41 North Road, London N7 9DP.

2. The petition to wind up the company in the public interest was presented on 8 August 2008 under Section 124A of the Insolvency Act 1986. The company was compulsorily wound up by the Court on 24 September 2008.

3. Companies Investigation Branch is part of the Insolvency Service and carries out confidential enquiries on behalf of the Secretary of State for Business, Enterprise & Regulatory Reform.

4. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Service also authorises and regulates the insolvency profession, deals with disqualification of directors in corporate failures, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice.

5. All public enquiries concerning the affairs of the company should be made to the Official Receiver at Public Interest Unit, The Insolvency Service, 21 Bloomsbury Street, London WC1B 3SS. Public Enquiries 0207 637 1110.

6. Further information about the work of The Insolvency Service is available from http://www.insolvency.gov.uk

Press Notice

Client ref Ins/Coms/28

COI ref 165770P

Bradley James Group

Friday 26 September 2008
Insolvency Service (National)

Company surplus to requirements

Worldwide Surplus Supplies Limited, a Yorkshire-based company that supposedly traded in waste and scrap metals has been wound up in the High Court following a confidential investigation by the Companies Investigation Branch (CIB) of the Insolvency Service.

CIB discovered that the company could not be contacted at its registered office and that it had apparently been abandoned by its officers, who neglected to co-operate with the investigation. There was also a general lack of transparency with regard to the company's governance, with statutory documents being filed late, or not at all, or containing material inaccuracies. CIB also established that the company's financial records were missing and that assets shown in its most recent accounts could not be identified or traced. Further, in spite of the apparent abandonment, a material number of recent credit checks had been made, suggesting that applications for credit were being made in its name.

In making the Order, the Court heard that there was a real concern that the company was incorporated, or may have been used, as a vehicle for fraud and that, if the company remained on the register, there was a danger that it may, in the future, be resurrected as a vehicle for fraud.

NOTES TO EDITORS

1. The registered office of Worldwide Surplus Supplies Ltd, which was incorporated on 6th April 1989, is at 107 Close Hill Lane, Newsome, Huddersfield, HD4 6JT, but was formerly at 21A Station Street, Melton, Holmfirth, HD9 5NX until 11 April 2008.

2. The petition was presented on 8th August 2008 under s124A of the Insolvency Act 1986. The company was compulsorily wound up by the court on 24th September 2008.

3. The Insolvency Service carries out confidential enquiries on behalf of the Secretary of State for Business, Enterprise & Regulatory Reform through Companies Investigation Branch.

4. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice.

5. All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit, PO Box 326, 17 - 21 Chorlton Street, Manchester, M60 3ZZ. Tele: 0161 934 4182
Email: piu.north@insolvency.gsi.gov.uk

6. Further information about the work of The Insolvency Service is available from http://www.insolvency.gov.uk

Press Notice

Client ref Ins/Coms/26

COI ref 165763P

Bradley James Group

Friday 26 September 2008
Insolvency Service (National)

Time's up for mobile phone retailer

A company selling mobile phones and airtime contracts has been wound-up by the High Court in Manchester following an investigation by the Companies Investigation Branch (CIB) of the Insolvency Service.

Smart Tek Limited ("Smart Tek"), based in London, carried on business as a retailer selling mobile phones and airtime contracts. The company offered cashback deals as an incentive to encourage sales to members of the public.

CIB's investigation found that between 2005 and December 2007, the majority of sales completed by the company were on the basis of cashback deals where a customer could purchase a mobile phone with an airtime contract and a period of "free" or "half-price" line rental. This involved the customers being able to claim a portion or, in some instances, all of the line rental payments, at pre-determined intervals throughout the term of the contract.

However, the enquiry found that the company not only failed to pay refunds due to customers who had already claimed, but that it had failed to make adequate provision to pay future claims for refunds under the terms of contracts which it had issued. Due to inadequate accounting records, CIB was unable to establish the full extent of the company's potential liabilities, although the amount was estimated to be £410,000.

In making the winding-up order the court found, amongst other things, that:

- the company traded in a manner which was contrary to the public interest

- the company breached Data Protection Act regulations relating to the misuse of customers' data

- the company operated an unsustainable business model in that it relied on income from new customers to repay obligations under existing cashback contracts

- funds were misused in that various payments were made which did not appear to have been for the benefit of the company

- The company failed to maintain or deliver up adequate accounting records

NOTES TO EDITORS

1. The registered office of Smart Tek Limited is at 252 Halliwell Road, Bolton, BL1 3QD. The company was incorporated on 2 August 2000.

2. The petition to wind-up the company in the public interest was presented on 19 August 2008 under the provisions of s124A of the Insolvency Act 1986 following investigations carried out under section 447 of the Companies Act 1985 by the Companies Investigation Branch of the Insolvency Service. The Winding-up Order was made on 23 September 2008.

3. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent.

4. The Insolvency Service carries out confidential enquiries on behalf of the Secretary of State for Business Enterprise and Regulatory Reform through Companies Investigation Branch. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice.

5. All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit, PO Box 326, 17 - 21 Chorlton Street, Manchester, M60 3ZZ. Tele: 0161 934 4182
Email: piu.north@insolvency.gsi.gov.uk

6. Further information about the work of The Insolvency Service is available from http://www.insolvency.gov.uk Insolvency Service, 21 Bloomsbury Street, London, WC1B 3QW.

Press Notice

Client ref Ins/Coms/25

COI ref 165758P

Bradley James Group

Wednesday 17 September.
Insolvency Service (National)

Theft of laptops from the Insolvency Service

The Insolvency Service has today written to all those who it believes may be affected by the theft of IT equipment from its Manchester offices.

The theft of four laptop computers has been reported to Greater Manchester police, who are investigating.

Three of the computers contained no data. The fourth laptop computer contained personal information about the former directors of 122 companies which had become insolvent. It also contains some information about other persons who had had some connection with these companies.

The information consisted of documents sent to The Insolvency Service by insolvency practitioners who act as administrators, receivers or liquidators of insolvent companies. The documents, which are required to be sent by law, included information about the activities of company directors which the insolvency practitioner considers may give cause for concern.

Those affected include:
* the named former company directors
* the insolvency practitioners who submitted the relevant documents
* other individuals identified in the documents, including creditors, complainants, investors and employees.

The Insolvency Service is working with Greater Manchester Police to try to recover the computers that were stolen from its premises.

The Insolvency Service has provided dedicated telephone lines for persons who may be concerned about this loss of data. For further information refer to the contact information on the 'Contact Us' section of the Insolvency Service website http://www.insolvency.gov.uk/contactus/contact.htm

Notes to Editors
1. The Insolvency Service administers the insolvency regime. It investigates all compulsory liquidations and individual insolvencies (bankruptcies) to establish the causes of failure.

The Service also:
* authorises and regulates the insolvency profession;
* deals with disqualification of directors in corporate failures;
* assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees;
* provides banking and investment services for bankruptcy and liquidation estate funds;
* carries out confidential company investigations through its Companies Investigation Branch; and
* advises Ministers and other government departments on insolvency law and practice.
Press Statement

Client ref Ins/Coms 25

COI ref 165535P

Bradley James Group

Thursday 4 September 2008
Insolvency Service (National)

Circle broken by CIB petitions

Two Cheshire based companies that offered to help owners dispose of valueless timeshare products and also marketed a potentially worthless cash back scheme have been wound up in the High Court following an investigation by the Companies Investigation Branch (CIB) of the Insolvency Service.

CIB's investigation found that Full Circle Management Ltd (which traded under the style of FC Management) targeted existing timeshare owners, who were invited to attend a presentation at which they were persuaded to pay the company a fee, in return for which they were promised they would be "rid of the [timeshare] problem once and for all". Clients were also invited to participate in a cash back scheme through which they were offered the opportunity to earn back what they had lost on their timeshare investment.

The cost of the combined options varied between £1,800 and £8,000 and the company signed up nearly 450 clients between September 2006 and March 2008, generating a turnover of more than £2m. However, the enquiry found that almost £1m of that sum had been diverted to a Gibraltan company under common ownership and could not be accounted for.

Furthermore, CIB's investigation also established that the timeshare disposal contract was not legally binding on the timeshare management company who, in the event of default by Full Circle, would continue to look to the client for outstanding management fees; a fact that was not made known to the client by Full Circle. As at February 2008 the company had potential future annual management fees of more than £150,000 but less than £12,000 in its bank account.

Regarding the cash back scheme, the investigation established that Full Circle had received more than £280,000 as agents for the cash back providers (in addition to £95,000 in sales commission) but that, as at March 2008, had handed over only £107,000 of that sum. As a result, 51% of clients are prevented from pursuing their claim to cash back, having not received the required paperwork, whilst the potential of the scheme for the remaining clients cannot be assessed.

Recent information reveals that the company ceased to trade in July 2008, having been abandoned by its management team, who are ex-patriots living in Spain and who failed to co-operate fully with the investigation.

Full Circle's sister company, FC Management Ltd, although dormant, was also wound up by the Court on the grounds that its name was identical to the trading style of Full Circle and could lead to confusion in the minds of the general public.

In winding the companies up the District Judge commented that Full Circle's business model appears to be one that significantly disadvantages the public.

NOTES TO EDITORS
1. The registered office of both Full Circle Management Ltd and