K2 Business Rescue The Emergency Service for Business

Call Tony Groom on 0844 8040 540

The journey for every business is different. We listen to you and your objectives before proposing a plan for survival and growth. We work alongside you and your team and focus on protecting and improving your wealth.

Published on 25 July 2011by Tony Groom

Saving insolvent companies needs both a restructuring and business plan

Following the demise of Rok and Connaught, another national building

maintenance company, Kinetics Group, has just gone into administration with 500

employees being made redundant leaving a skeleton staff of 50 to deal with its five

sites.

The Kinetics Group had provided building maintenance solutions to over 250,000

social housing properties, schools and public buildings across the UK.

Insolvency practitioners Begbies Traynor were appointed as administrators in July and

attribute the demise to the loss of key contracts and delays in payments by

customers.

The background to this dramatic failure seems to be rather complicated, but no

doubt will be clarified once the administrators have a chance to investigate and

report on the circumstances leading up to the close down of the business.

Just over a month earlier, in June 2011, there appears to have been an attempt by

Kinetics Group to save the business through acquisition of the business and assets of

a number of its own subsidiaries by a newly formed subsidiary SCP Renewable Energy

Limited (SCP).

Various references to the acquisition by SCP refer to the purchase of assets from the

following subsidiaries: Sureway Gas Limited, Kinetics Midlands Limited, Kinetics South

Limited, The Lord Group Limited and DC Group Limited. It is not yet clear if the

acquisition took place before or after these companies were placed in liquidation or

administration.

K2 Business Rescue The Emergency Service for Business

Call Tony Groom on 0844 8040 540

A further complication is the status of SCP Renewable Energy Limited which is

referred to by the administrators as being a newly incorporated company owned by

Kinetics Group, however this name is not listed at Companies House.

What is clear, is that the June restructuring was flawed and Tony Groom of K2

Business Rescue questions the role of the various stakeholders, who in his view should

have ensured that viable restructuring and business plans were in place as a

condition of their approving the acquisition.

He also suggests that this is an issue with the sale of business and assets by an

administrator, where the administrator is not responsible for the ability of any

purchaser to run or fund the acquired business.

Rarely do administrators save a company as a going concern, so their only real

objective is to maximise realisations for the benefit of creditors. This may explain the

high failure rate among purchasers post acquisition.

We are not Insolvency Practitioners. We operate within the law to protect our clients and their wealth. Our team has worked for over 20 years to help stabilise and return hundreds of businesses to profitable growth. Once appointed, Insolvency Practitioners do not work for you, they work for creditors and use your company’s assets to pay themselves. We work for you, not creditors.

More Free Resources for Directors and Business Owners in Difficulty www.rescue.co.uk

We Save Businesses We provide experienced advice to directors

We negotiate with HMRC and creditors We are on your side

Need Immediate Help – Call Tony Groom on 0844 8040 540