Subsequent to the failure of holiday providers such as Destinations for Africa, Monster Travel, Goldtrail, Sun4U and Kiss Flights,  Charles Duncombe says that “Over 250,000 people will probably be affected by travel companies going bust in this winter.”

Worrying times for anyone who prefers to take their holidays outside the traditional summer season, but perhaps not that surprising as Duncombe points out;

“It is in the summer season when the travel sector is at its busiest and should have the most money. Travel companies should not go bust in the summer. The reality that many have means that, regrettably, there are a number of travel companies who will probably be using summer’s temporary positive cash flow to keep them going. As the summer fades and the bookings start to dry up so will the cash flow and more travel companies are likely to suffer a similar fate. It could easily be another 5 companies with 50,000 passengers each.”

It is fair to say that from the thousands of travel companies in the UK only a handful are likely to go bust so the chances are slim, but Holidays Please offer the following advice to help make the right choice when choosing a holiday;

1) Make sure that your holiday is ATOL protected so if the tour operator or airline go bust you will get your money back (or get repatriated free of charge if you are left stranded)

2) If you have booked with a travel agent then make sure they are ABTA protected.

3) If you pay on a credit card rather than debit card sometimes your credit card company will be able to get your money back.

4) Take out high end travel insurance. It may not cover you for the whole cost of the holiday but it can cover you for supplementary costs (such as hotel stays etc..) if there are delays on flights.

5) Look for any signs of financial troubles with the company that you are looking to book with. Search on Google for terms such as the “[name of holiday company] redundancies” and “[name of holiday company] financial loss”

6) Look for holiday companies that sell “long haul” holidays. These are holidays that are to far away destinations outside Europe. These companies are likely to have more constant sales throughout the year rather than the feast and famine that can destroy short haul travel companies.

7) Do not book with companies that are a lot cheaper than other companies. If there is a holiday company that is radically cheaper than prices advertised in elsewhere then they are likely to be trading on wafer thin margins. This means they won’t have a cushion for major events like ash clouds and airline strikes. It is better to pay £50 more for your holiday and enjoy it than lose the whole cost of the holiday.

Happy Holidays!

Over 4,500 passengers are said to be stranded by the airlines sudden collapse, with most in Spain, Portugal, Cyprus and Egypt, the Civil Aviation Authority will repatriate around 1,100 of those stranded overseas.

GlobeSpan were put into administration yesterday putting 800 jobs under threat and causing untold misery to the many passengers and staff that have been stranded abroad.

Customers who booked directly through flyglobespan.com website are unprotected and will not get a refund, but they may qualify for a reduced rate repatriation fare, although some may also have credit card protection or personal travel insurance in place.

Earlier this year FlyGlobeSpan announced profits of £1.2 million, following a disastrous £19 million loss in the previous year.

This is of course all perfectly legal in the UK and is not only a huge benefit to the company directors of such underhand businesses, but is also incredibly lucrative to liquidation and administration advisers, who will leave little for creditors to pick over.

The FPB give their description of ‘phoenix companies’ as;

“A phoenix company exists where the assets of one limited company facing liquidation are moved to another business. Often, some or all of the directors remain and the new business frequently operates in the same area as its predecessor.”

Most business owners will have experience of ’serial’ phoenix company operators in their own locality and will be very wary of dealing with them, particularly on credit terms.

The problem is that when these companies go bust they normally owe a substantial amount of money which creditors have absolutely no chance of getting. This has a knock on effect down the chain of supply, with everyone suffering except the crooked directors.

MP for Portsmouth South, Mike Hancock said:

“The Better Payment Practice Campaign found that a quarter of companies have fallen foul of ‘phoenix companies.’  Obviously, smaller businesses in particular need to get all the money that is owed to them and even one default can make the difference between an otherwise well-run company going bust or continuing in business.”

The actual figure from the Insolvency Service recorded 35,242 people in England and Wales were declared insolvent, a 28% increase on the same period last year.

It represents the highest figure since records began in 1960 and there appears to be no let up as figures will only rise as unemployment continues to increase.

Anthony Cork, director at accountants Wilkins Kennedy, said;

“Those who have already suffered job losses are just beginning to be represented in these figures but there are many more behind them who are still battling to weather the storm.  Historically unemployment has continued to rise even as the economy begins to recover, and this means that personal insolvencies can only soar even further. Things are likely to become very bloody indeed.”

Some good news is that company insolvencies fell by almost 10% in the period, with 1,300 businesses suffering compulsory liquidation, with a further 1,578 in the first stages of the winding up process.

With the current state of the economy it would not be a surprise to see the figures reach even higher levels in the new year as many businesses and individuals over stretch themselves in the Christmas period.

Your Solicitor, Qualified to Answer

The Law Society have launched a campaign entitled Your Solicitor, Qualified To Answer which uses the Beatles influenced strapline Help, I Need Somebody. The campaign will run from September 21st until November 21st and will be featured in printed media and in more than 200 stations, where it is estimated that there will be 100million chances to see the advertorial.

The campaign is aimed at making the consumer aware of the problems that solicitors can help solve and how having the right legal advice can help save money, time and heartache.

Advertising will direct the public to www.lawsociety.org.uk /commonlegalproblems where they can search for a solicitor to help them through the ‘find a solicitor’ service as well as more in-depth information about how solicitors can help.

The law society common legal problems focus on making a will, probate, setting up a home with your partner, renting out your property, renting a home, financial matters for the elderly, buying a home, getting a divorce, personal injury claims, problems at work, setting up a business, using a solicitor, and asylum.

Des Hudson, Law Society Chief Executive says: “Most of us need expert legal help at some time in our lives, but not everyone knows where to turn. Unfortunately most problems don’t just go away, and by ignoring them they can get worse – and more expensive.”

For anyone thinking of starting a business, a solicitors advice is invaluable as this advice from the Law Society explains:

With the recent downturn a lot of consumers are finding themselves ploughing their redundancy money into new businesses.  Statistics from the Government Insolvency Service show that in the twelve months ending June 2009, approximately 1 in 120 active companies went into liquidation – an increase of 39.1% on the same period a year ago.  One of the reasons many businesses fail is through lack of planning beforehand. “A solicitor will be able to answer the questions to help you decide to pursue your business ambitions” says Des Hudson.

Solicitors offer a wide range of services. From writing wills to resolving disputes between neighbours, from problems at work to buying and selling your home and putting together your Home Information Pack.

Allied Carpets

Allied Carpets went into administration a month ago when the management team immediately formed a new company to cherry pick the profitable parts of the business from the administrator BDO Stoy Hayward.

The purchase of the 51 shops and insurance inspection business by the newly formed Allied Carpets Retail Ltd, did secure the immediate future of 400 of the companies employees, but failure to find a buyer for the outlets that were left has proved an impossible task for the administrator.

While BDO Stoy Hayward say they have had some interest shown in the remainder of the business, companies already operating in the flooring and carpet retail business are reluctant to invest in growth in the current unpredictable economic climate.

The number of companies going into liquidation has grown by a massive 39.1% over  the same period in 2008, while the number of unemployed rose by 281,000 in the second quarter, the biggest quarterly increase since 1971 when records began.

The jobless rate stands at 7.6% – it’s highest in over a decade, with labour market ‘experts’ predicting a return to the Thatcher days of one in ten out of work by the end of the year.

Despite the many, so called experts, predicting the end of the financial crisis, we continue to see the number of  casualties increasing on a daily basis. Making credit more freely available may serve a purpose but for many businesses finance is just one of many problems.

Many companies have survived the horrors of the last twelve months by making cutbacks and shoring up finances, but now lack the resources to continue. We are far from out of the woods, as the market contracts further business becomes more scarce and competition fiercer.

These are still desperate times for the economy and many more businesses will bite the dust before we see any glimmer of recovery.

Fifty one of the groups 217 stores were immediately sold back to Allied Carpets Retail Ltd, a new company formed by the previous management and owners Valco Capital Partners. The sale of the most profitable part of the business, one assumes, will safeguard 400 jobs.

The new company is also negotiating with landlords at ’some’ of the other 166 outlets, while BDO are searching for a buyer for the rest of the discount carpet business. A further 1,100 staff are employed at the remaining branches.

The Birthdays stores were purchased by Clinton Cards in December 2004 for £46.4million. The chain of 332 outlets failed to give Clinton Cards the return on investment that it hoped for and with the added problems of the financial crisis and subsequent cost cutting by consumers led to the chain being put into administration.

Now it appears that Clinton Cards are hoping to negotiate a deal to buy back 140 Birthdays stores that are in favourable and profitable locations. Birthdays employed 2,100 when it was put into administration, some of which would be saved if  a deal is agreed.

Clinton Cards chairman, Don Lewin said in May that around half of the Birthdays stores were loss making and the group could no longer afford to support losses of £7million a year.

Russian owned GAZ were forced to suspend production at the LDV plant in December, citing funding problems. Talks with Malaysian company Weststar broke down last week after it failed to come up with the funding to complete the purchase, despite the provision of a £5million bridging loan from the UK government.

In a statement issued today, GAZ said it was a sad day for the LDV workforce and British manufacturing.

“Over the last few months, we have fought relentlessly to find a solution that would ensure jobs and manufacturing remain in Birmingham.”

There is speculation that Weststar or indeed another buyer may be interested in buying what is left of LDV, but also concern that it will be stripped of it’s assets in the UK and taken abroad.