Inside & Outside the Law - Closing Time?

The lawyers at City firm Linklaters will be working late nights, following being appointed to act for the administrator of HMV, which collapsed on Monday after a painful period of decline.
 

The view down Silk Street to the Barbican Arts Centre.
Linklaters' offices rise on the left-hand side
 

This is not the place for an insolvency lesson, but in simple terms a company becomes insolvent when it runs out of cash to pay its debts.

Christmas is a critical time for retailers. 25th December is one of the rent days in the year, and if Christmas trading is not strong then a company will come under immediate pressure.

And to add insult to injury, HMV was followed within a day or so by DVD rental business Blockbuster, as another administration casualty. And all this barely no time after the administration of Jessops, the camera retailer.

In a Radio 4 Today Programme piece in the last week, the BBC’s Business Editor, Robert Peston, discussed the theory that failing businesses need to fail before we can see a true economic recovery. Harsh stuff, but maybe true.

Now collapsed does not definitely mean terminal. The purpose of an administration is to give a company a temporary respite from its creditors while the administrator sizes up the strength of the business and decides if all, or at least part of it, can be saved. And sometimes parts of the business are indeed saved.

This is all a far cry from the Dickensian days of debtors’ prison, and interestingly is an approach learnt by we Brits from our US cousins (there it is called Chapter 11)

So, inspired by the love of the excellent Londonist website for creating lists, here, courtesy of The Lawyer Magazine, is a list of ten high profile insolvencies from 2012.

The retailer element in the list has a strong historic London connection, and one other company is associated with vehicles in London that might justifiably be described as iconic. Please track any of the names further on the internet if you want to see what happened next (there is some good news in there!).

24th January: Petroplus Refining & Marketing
Not a household name, but a major UK oil refinery business.

13th February: Rangers Football Club
Scottish football club forced into administration by HM Revenue & Customs, to whom it owed £14m in tax.

16th March: World Spreads
Spread betting company found to have accounting irregularities.

26 March: Game Group
Video games retailer.

9th May: Clinton Cards:
Greeting cards retailer.

26th June: Town Centre Restaurants
Owners of the Cafe Giardino and Auberge brands.

18th July: Ethel Austin
Clothing retailer.

1st October: JJB Sports
Sports clothing and equipment retailer.

22nd October: Manganese Bronze
Black cab manufacturer. The administration followed the discovery of a steering fault in 400 of its vehicles (steps then taken to rectify fault).

2nd November: Comet
Electronics retailer.

Before Christmas I bought a DVD from Blockbuster (the BBC TV “Pride & Prejudice” – preferable to the film, if you ask me), and during last week I swarmed with the gnats in HMV Moorgate and bought a five film Quentin Tarantino DVD box set for £12. Too little, too late, I hear you cry.

The author is a City of London and City of Westminster Guide, who runs walking tours in the City and in Westminster. See tabs for further details

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