Two management buyouts had been agreed. A group led by Tony Canning, Corp Comm's chief executive, was paying pounds 3.8m now and pounds 2m later for the investor relations side, Georgeson International. Another, led by Angela Heylin, managing director of Charles Barker, was paying pounds 60,000 plus 2.5 per cent of future revenues for the political and consumer PR business. A rival said that business could be worth pounds 5m.
The backers of the buyouts were Bank of Scotland, the group's largest creditor, and USF&G, the US insurance group which owned 60.2 per cent of Corp Comm.
The collapse left a string of angry unsecured creditors. The group's second largest shareholder, the Luxembourg-based Invest International Holdings, is estimated to have lost more than pounds 1m, the Financial Times has lost pounds 250,000 and a computer supplier is believed to have lost pounds 100,000.
Hammerson, which owns the City building Charles Barker occupies, has lost an annual rent roll of pounds 1.2m and may be liable for rates of pounds 750,000 in the offices. In talks prior to Corp Comm's collapse directors told Hammerson the company could not afford the rent any more and Hammerson would have to reduce it.
Some creditors are threatening legal action and have consulted leading City solicitors. Mr Canning is robust in his view that the directors cannot be liable and says: 'Our concience is clear.'
Corp Comm was created in 1981, and through the decade was one of the City's most successful PR groups. But its collapse followed three years of expansion.
Led by Mr Canning, known as Porky Boy by his employees, and Peter Willets, the group paid dollars 13m for Georgeson, the US's leading proxy solicitation group and pounds 9m for Charles Barker, the world's oldest PR firm formed in 1831. It also spent more than pounds 13m on 'restructuring' costs.
Mr Canning and Mr Willets led a lavish lifestyle. There was a flat in the Trump Tower in New York and flights on Concorde to attend concerts. Last year Mr Canning received a salary of pounds 210,000 plus pounds 600,000 of bonuses, even though the group's pre-tax profits fell to pounds 525,000. He also owns a large yacht, which one of his assistants phoned to point out was 'bought by Tony himself through his earnings, not by the company'.
The money train ran into the buffers in February. The group had a capital restructuring in which investors pumped pounds 3.5m into the company through a rights issue. At the time Mr Canning told the trade journal PR Week: 'Any rumours about our financial health are based on a fundamental misconception or an understandable lack of knowledge of our strategy.'
However, the strategy led to Corp Comm's board voting on 23 July for calling in the receivers. Next morning Mr Canning called Bank of Scotland, the main debenture holder, and it agreed to appoint a receiver. But this was not done until 30 July, a delay of six days. Bank of Scotland has declined to explain the delay, which one of its senior executives agreed was 'quite long'.
In the meantime the buyouts were negotiated with the knowledge of the receivers Ian Bond and Chris Hughes, of Cork Gully, as well as Bank of Scotland and USF&G. No other creditors knew about this. Nor did any other potential buyers, many of whom have told The Independent that they would have been interested.
Mr Bond has said the businesses could not have been placed on sale generally as they were people business. However insiders at Corp Comm point out that Georgeson is a business based on a computer database of investors and their shareholdings which would be expensive to replicate.
Critics of the deals argue that the Corp Comm companies have merely stated again with lower overheads and without their unsecured creditors. The question is, will the clients back them?
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