Killarney Diary: Top company rescuers taste a drop of the Irish
Monday 07 June 1999
The town was host to the ninth annual conference of the Society of Practitioners of Insolvency, meaning that over 250 of Britain's top receivers, liquidiators, insolvency lawyers and bankers descended on the place.
The town possesses some of the best fishing sites and golf courses in Ireland, and is also set among stunning mountains and lakes, all of which no doubt helped to concentrate the delegates' minds on the important topics at hand.
In fact the main purpose of the meeting was to change the way people perceive the British insolvency profession. Forget all those stories about corporate undertakers bent on burying British industry. Please welcome the warm and cuddly company rescue specialists, who are there to rebuild troubled businesses.
The idea is to widen the membership of the SPI from the 2,500-odd licensed insolvency practitioners - overwhelmingly accountants - to include lawyers, bankers, company doctors and anyone else involved in turning businesses around.
Oh, and they want to change the name as well. Apparently the "I-word" (insolvency) just has to go, more of which later.
Interestingly, some of the delegates from small practices that concentrate on liquidations and receiverships rather like the I-word. It decribes what they do. They worry that widening the membership would let in "cowboys".
ANYWAY, I bumped into John Alexander, a senior insolvency - sorry, corporate recovery - partner with Pannell Kerr Forster, who has just sold the Fashion Cafe, a themed burger bar in London promoted by super models including Naomi Campbell, Elle Macpherson and Claudia Schiffer.
Despite being just off one of the world's most busiest locations, Piccadilly Circus, the Fashion Cafe went bust last October. The owners ( who didn't include any of the models) had bought the franchise from Fashion World Inc of New York but ran out of money to promote the London cafe, converted from an old Rialto Cinema, after spending pounds 7m on tarting it up.
The original idea was for models to flounce up and down the Fashion Cafe's catwalk to entertain the gawping backpackers. Mr Alexander says he was on the point of selling the business as a going concern but the property side of the deal fell through.So he sold the cafe to the existing (un- named) landlord instead. "It would make a great nightclub, but the landlord didn't want any competition for the Cafe de Paris, which is downstairs," says Mr Alexander.
Various frocks worn by the supermodels when the cafewas launched will be auctioned soon, to help pay off creditors, he added.
THE OPENING speaker at the SPI Conference on Friday was Dick Spring, member of the Irish parliament (Dail), who has plunged into business since quitting as leader of the Irish Labour Party. His main theme was the Irish "Celtic Tiger" and its future inside the European Union. But first he had to admit that the fall in the euro since its launch, to near parity with the dollar, had made "a bloody mess of my pension"
Mr Spring lives in nearby Tralee and is currently involved in a US bid for a big Irish hotel chain, the Great Southern Hotel group, for up to pounds 100m. Great Southern is owned by the Irish equivalent of BAA, Aer Rianta, which is itself being fattened up for privatisation.
THE HEATED debate at the Conference on changing the name of SPI and opening up its membership was chaired by David Buchler, who was himself the subject of much envious chatter over the weekend, since he has just sold his corporate recovery business Buchler Phillips to Kroll O'Gara, the US private investigation specialists, for around pounds 12.4m.
While trousering the Yankee gold Mr Buchler insists he will keep control of his business, including 13 partners and 150 staff, which will now become the "corporate financial risk mitigation" arm of Kroll. Roughly translated, this means sorting out troubled companies and doing investigations, but with a worldwide pool of contacts to call on. And the money should come in handy, too. The deal has set other insolvency specialists wondering why they can't do the same thing. Expect a few more deals over the next year.
ARE traditional British prams set for a comeback? The three Abingdon- based actuaries that bought pram makers Silver Cross from the receivers for pounds 1.3m this month certainly hope so. The receiver involved, John Newell of Ernst & Young, says the buyers are a resourceful lot. They originally built their own firm, H & C Actuarial Services, which they sold to BPP, and they recently invented a device for enabling handicapped people to get in and out of the bath, under the business name "Silver Crown". Now they have rebranded the classic pram business, which was hit by the switch to buggies, as "Silver Cross Heritage".
THE SPI offered a case of champagne for the best suggestion for a new name for the organisation in Saturday morning's session. One chap who had overindulged the night before suggested "Resolve", the allusion to the well known hangover medicine being welcomed by other sufferers in the audience. Other suggestions included Business Recovery Association (BRA), Rehab, The Association of British Company Doctors, and Association of Recovery and Turnaround Specialists (ARTS).
The fizz remains unclaimed so far. The whole reform project will go to a vote of members in the autumn. My own suggestion was "International Rescue" but I think Thunderbirds already use that one.
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