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13.01.2017

Hewden administration update

Hewden administrators Ernst & Young has confirmed that unsecured creditors are unlikely to receive anything from the administration.

Net assets are said to be in the region of £100 million, but secured bank creditors are owned £150 million and will be first in line for pay outs.
The pre-pack deal with A-Plant for the powered access, generating and Interlift lifting gear business raised £29 million, while depot sales to Morris Leslie, Ashbrook, GAP and Nixon Hire has raised a further £29 million.

EY hopes that the sale of the 137 cranes and residual equipment through Euro Auctions will raise a further £50 million.

Unsecured creditors include intercompany loans, the Inland Revenue and a £46 million shortfall in the company’s pension fund. There are a total of £22.5 million regular trade creditors, with Tadano at the top being owed £7.4 million, while telehandler suppliers Gunn JCB and Finning are each owed around £500,000.


Vertikal Comment

This is no great surprise, even if Hewden had been a good deal less insolvent the administrators and banks would have made sure that they had eaten their fill of the carcass before considering if they should let unsecured trade creditors have a look in.

Administrators typically state that their role is to make sure that the secured creditors - their paymasters – get most of their money back and that they themselves are well rewarded for doing such a ‘tough job’ as a result there is rarely anything left for anyone further down the totem pole . And as to the trade creditors – well they shouldn’t have given the credit in the first place if they weren’t prepared to lose it - should they.
The fact that lenders, often in collusion with private equity owners, often overload a company with debt and then extract exorbitant management and consulting fees for services with no tangible value, causing the insolvency in the first place, seems to conveniently escape them.

The UK insolvency laws are totally unfit for purpose and an absolute scandal. But sadly there seems to be little appetite among the ‘powers that be’ to change anything. So it looks as though the only answer is to tighten down on credit and beware of company’s owned by private equity firms?

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