THE technical insolvency of Heron International, once one of Britain's biggest private companies and the hub of Gerald Ronson's property and trading empire, casts fresh doubt on the outlook for one of Britain's most forthright business personalities.
The insolvency is the immediate effect of failure to attract a quorum to a meeting of Heron International's bondholders last Thursday. Holders of 35 per cent of the bonds either attended or sent in proxy votes, but a quorum insists that half be represented.
And in the US, Strategem Development Corporation is suing Heron Properties in the New York Supreme Court. It wants the court to set aside the restructuring of Heron's American businesses on the grounds that the move was 'an unlawful fraudulent conveyance'.
Heron, with debts of more than pounds 1bn dwarfing the company's dwindling assets, seems to be lurching from one crisis to another.
That alone will be a severe blow to Mr Ronson's pride, which in 1990 had to suffer the humiliation of a jail sentence for his part in the Guinness scandal.
Mr Ronson inherited Heron from his father, Henry, a former boxer who built a modest furniture business.
They moved into property after selling a building for far more than they were earning from furniture.
Heron combined property and trading when it created Britain's first chain of self-service petrol stations. That took the group into car dealerships and, later, insurance.
The latest crisis has been caused because the company, facing a further deterioration in European property values, wanted bondholders' consent to postpone payment of interest, due now, until the end of June.
Since it did not receive that consent, the group is technically in default with its creditors and can be called into receivership at any time.
Gary Klesch, the trader in the bonds of distressed companies, who is fast becoming a champion of bondholders' rights, thinks the company's failure to attract a quorum stems from the fact that it held the meeting on the day before the Easter break and failed to advertise it.
But many bondholders may simply be wearying of the situation.
Heron's recent history reads like a checklist of financial misfortune, but its founder, Mr Ronson, remains in charge and stands to earn a salary package of pounds 4.5m in a five-year deal. Some of the banks feel safer with him at the helm than anyone else, even though he is in effect dismantling the group he built up.
Sadly for Heron, its property investment in the United Kingdom and United States now faces a potentially lethal blow from property investments in Spain and Portugal, just as the UK and US are recovering.
So just months after agreeing last September's financial restructuring, Heron has been forced to restructure again, blaming problems on the property markets in Europe.
Heron says that 'despite the high quality of the group's principal assets in Spain and Portugal, the local currency value of these properties has fallen, on average, by a further 14 per cent . . . Against this background, and despite continuing negotiations, it is unlikely that the group will be able to dispose of its principal property assets . . . by 31 March 1994.'
The 11,000 bondholders, some of whom bought the bonds as a low-risk, high-income investment in the booming 1980s, now have to decide whether they would be better off with receivers in charge than with Mr Ronson and his management team plus expensive advisers.
Bondholders complain that some of the banks, who are bankers to the more asset-rich Heron Corporation as well as its sister company, Heron International, are receiving more information about the group as a whole than they themselves are.
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