What Does Going Into Administration Mean?

Laybuy, the pay now pay later firm, has collapsed into administration just days after suspending its service.  The company allowed customers to buy products online and spread the costs over 2-3 months.The company has 500,000 users operates across New Zealand, Australia, and the UK with 300,000 in the UK.The company has gone bust in New Zealand after failing to find a buyer.Sam Ballinger, joint administrator at FTI Consulting, said: "The joint administrators are currently assessing the options available to the companies and supporting the employees, merchants and other affected stakeholders through this difficult period."Laybuy is not currently accepting new transactions, however, customers should continue to make payments as normal."FTI said that further updates including those affecting customers will be shared in the coming days at www.fticonsulting.com/uk/creditors-portal/laybuy-uk.It is indeed a good idea that any customers who have bought goods using Laybuy must continue to make payments.  The administrators will pursue any customers who do not pay and non payments will affect your credit score.The company has 29 employees in the UK.It is possible that the company may be sold out of administration.  Klarna are the main operator in this market space and could be interested if Laybuy had any particular areas where they dominated.  However with 300,000 users in the UK it might be worth waiting until all those payments have been made and they simply have the technology left over.

Derbyshire meat factory, Loscoe Chilled Foods has gone into administration, with all its 120 employees made redundant.  This follows an investigation from the National Food Crime Unit, over how UK supermarket chain Booths may have been supplied with mislabelled, pre-packed sliced meat, back in 2021. When officers from the Food Standards Agency and police went on an unannounced visited to the factory, they found that meat allegedly sourced from South America and Europe had been labelled as British (note that here there is no suggestion that any of the company's meats were unsafe to consume). Three people were arrested on this visit and immediately the firms BRC food safety accreditation was withdrawn.Customers of its cooked meats ended up cancelling orders, resulting in the company running out of money to keep going.Derbyshire Live shared a letter that was sent to staff by Ian Brooks, personnel manager:"I wanted to provide you with an update following my recent announcement that staff would be temporarily laid off as a result of customers withdrawing orders, following the suspension of our BRC certificate. While the business had hoped to find a buyer so that it could keep operating, this has not proven to be possible as of yet. Therefore, it is with regret that I must inform you that Loscoe Chilled Foods Limited is entering into administration. This means that the business is closing and that, with effect from Friday, March 24, 2023, all roles within the business will be made redundant. I appreciate that this is not the news that you wanted or needed to hear. On a personal level, I wanted to tell you how very sorry I am and to thank you all for your dedication and service to the business. That has certainly not been unappreciated, and it has been a pleasure to work with you all over the years. I wish you and your families all the very best for the future.''

An innovative “Green” dairy called Mona Dairy has gone into administration as they have been unable to raise the required funds.The £20 million dairy started operating in 2020 and can produce more than 30,000 tons of Welsh and continental cheeses every year.Over  30 local dairy producers had been supplying the plant with milk.The net-zero dairy employs around 50 staff at the Mona Industrial Park and was supported by a £3m grant from the Welsh Government.The Dairy is powered by renewable energy and launched the UK’s first BEV (Battery Electric Vehicle) tractor and trailer for milk haulage.A statement on the dairy’s website said Anthony Collier and Phil Reynolds of FRP Advisory were appointed as Joint Administrators of Mona Island Dairy Limited on 7 June 2024.“The Joint Administrators are currently exploring options of Mona Island Dairy Limited, and separately will be in contact with all known creditors in due course,” it added.This is not the first "green" company that has gone bust over the last few years.  Many have run into difficulty as they often have high start up costs and receive grants that gets them through the first years.  Customers also sometimes do not have the same loyalty or "zeal" for the company's green credentials as the owners.

Update 28th June 2024The Cazoo brand has been bought by Motors, the online market place.  However they have not bought the whole business. Update 21st May 2024Cazoo is expected to go into administration today with Teneo being the appointed advisors.  The notice of intention to appoint moratorium expires tomorrow and there appears to not have been a rescue or sale. Cazoo, the online second car dealer, has filed a notice of intention to appoint administrators.  The company was at one point worth £6bn and employed 5000 people.  Cazoo was floated on the US stock market and made its founder, Alex Chesterman, (on paper at least) one of the richest men in the UK.The company boomed as it offered a platform for people to buy cars online and have them delivered to their home.  The pandemic helped their growth and the company spent millions on advertising and sponsorship deals.The company admitted last week that it was burning through £10m of cash a month and that it needed an urgent capital injection to survive.Other factors contributing to its problems has been the rapid fall in second hand car values and the slower uptake of electric cars.The company is not in administration right now but has filed an intention to appoint administrators.  This means that the company has 10 days protection from its creditors, who may be threatening winding up petitions, whilst it tries to raise addition funds or sell the business.Once that time period is up they may be able to extend for another 10 days, subject to approval by the court, but there has to be a very strong reason to do so.Check the links on the right hand side for other questions regarding companies going into administration

29th July 2024Ted Baker has now announced that it is to close all its UK stores.8th April 2024Administrators announce that Ted Baker is to close 15 UK stores (of which ''have no prospect of being returned to profitability, even with material rent reductions") and cut 245 jobs.Of this, 11 stores will close by 19 April, resulting in the loss of 120 jobs.Then 25 roles from head office will go along with a further 4 stores, impacting the remaining 100 jobs.For the full list of closing stores:Birmingham Bullring Bristol Bromley Cambridge Exeter Leeds Liverpool One London Bridge Milton Keynes Nottingham Oxford Bicester London Brompton Road London Floral Street Manchester Trafford 22nd March 2024Teneo has been appointed as administrator of No Ordinary Designer Label (NODL) Limited - the company of which runs 46 Ted Baker stores in the UK along with a website and concessions.NODL has approx. 975 employees.Authentic Brands, which licenses the Ted Baker brand to the NODL, is in advanced discussions with potential buyers for the company.Reported reasons for the appointment of administrators are the struggles the firm faced following damage done during a partnership and a high level of arrears built up during a partnership with AARC Group. At the end of January 2024 AARC and NODL cut ties. 19th March 2024 It has been reported that Ted Baker, the clothing retailer, has filed a Notice of Intention to Appoint Administrators. This move is designed to give it a chance of recovery by protecting it from creditors legal actions for a 10 day period.  An injection of capital or a sale is hoped to be achieved during this period.A filed winding up petition (subsequently withdrawn) forced Ted Baker's hand.This latest move comes after the company delisted from the Stock Exchange and was sold to US-based Authentic Brands Group (ABG) for a knockdown price of £210m.  This follows a similar pattern to The Body Shop that was also bought out by private equity and then months later went into administration. Why don't these companies consider using a CVA to lower their debt? The likely reason is that these companies have been loaded with lots of secure debt which cannot be compromised by a CVA.  Property costs, HMRC, and suppliers are unsecured and can be bound by the terms of a CVA.  So, in essence, it wasn't expensive shop premises that have caused problems but indebtness.Ted Baker has suffered, like many other retailers, by the lockdowns, cost of living crisis and has borrowed money to try and survive.John McNamara, chief strategy officer for Authentic Brands Group, said: “We wish that there could have been a better outcome for the Ted Baker employees and stakeholders. We remain focused on securing a new partner to uphold and grow the Ted Baker brand in the UK and Europe where it began.”The company employs more than 900 staff and currently operates 46 stores across the country, as well as online and through department store concessions.There has not been an announcement on any redundancies yet.