Fancie in Liquidation?

[Goooooogle 10]

http://www.thestar.co.uk/news/business/collapse-of-sheffield-cupcake-firm-1-6388008

[jamesogt 11]

So it appears the post regarding the second creditors meeting was right.....Feel bad for those made unemployed.

 

 

 

 

COLLAPSE OF SHEFFIELD CUPCAKE FIRM

 

Sheffield’s most famous cupcake retailer Fancie has collapsed into liquidation for the second time.

 

 

Boss Amanda Perry called it a day after Christmas trading failed to save the company from becoming insolvent – and unable to pay its debts.

 

She chose a creditors’ voluntary liquidation and instructed Adrian Graham, of insolvency practitioners Begbies Traynor, to call a creditors meeting at its Sheffield office.

 

Mr Graham said none attended, but ‘quite a few’ voted by post for the company, FC&Co, to enter liquidation.

 

Mr Graham said it has not traded since Thursday’s meeting, when all staff were made redundant.

 

An external manager, who has no connection with Ms Perry, is currently running the sole remaining outlet – on Ecclesall Road – under licence.

 

Mr Graham said: “It’s unfortunate because Ms Perry tried hard, but has decided to call it quits.

 

“It appears she had not recovered from the previous business, she inherited some debts and in the end it was too much.

 

“There are a few parties interested in buying the assets, including the name.”

 

The demise of FC&Co comes after the original Fancie entered liquidation in May with debts estimated at £250,000.

 

Set up by Ms Perry in 2007, it initially soared on the back of the cupcake craze.

 

At its height it had four outlets including the original café on Sharrow Vale Road and a kiosk in Meadowhall shopping centre.

 

However, the Meadowhall site was a financial drain and the final nail was a five-figure demand for rates from Sheffield Council.

 

FC&Co, which lasted six months, was set up after Fancie entered liquidation.

 

Ms Perry was unavailable for comment.

 

The Star

[nikki-red 307]

Threads merged.

 

 

Thank you

[No User Name 10]

http://www.thestar.co.uk/news/business/collapse-of-sheffield-cupcake-firm-1-6388008

[Cyclone 10]

A five figure demand for rates from SCC? I find it hard to believe that this came as any kind of surprise, unless no budget had been prepared and future costs were being ignored.

[Mr Bloke 1,445]

A five figure demand for rates from SCC? I find it hard to believe that this came as any kind of surprise, unless no budget had been prepared and future costs were being ignored.

I wonder if it could perhaps have something to do with the skill set required to bake a bun being a bit different to the skill set required to run a successful business?

[xafier 10]

Me and my missus are really peeved off with this as we booked in for her birthday and paid a deposit for their food night on the 16th January. They called us late that day to say they had to cancel as they didn't have enough bookings.

 

We paid a £10 deposit for this that I'm guessing we'll never see again, can't believe a company that was in the process of going bankrupt would take someones deposit and then cancel the meal at such short notice. That is terrible business practise!

[Manlinose 10]

A five figure demand for rates from SCC? I find it hard to believe that this came as any kind of surprise, unless no budget had been prepared and future costs were being ignored.

 

they usually allow it to be paid over monthly installments - it would usually only be demanded as a lump sum if it was in arrears and they'd probably want it settling before the new tax year

 

SCC can't win sometimes - if they allow rates arrears to build up they get criticised for not collecting in monies due and if they try to collect in monies due they get criticised for shutting businesses down

 

although most councils i come across do seem a lot more active these days in trying to enforce collection

 

---------- Post added 23-01-2014 at 09:38 ----------

 

We paid a £10 deposit for this that I'm guessing we'll never see again, can't believe a company that was in the process of going bankrupt would take someones deposit and then cancel the meal at such short notice. That is terrible business practise!

 

it is, sadly, very common - best practice is to keep customer deposits in a separate, designated, ring fenced account - ideally with a bank to whom you don't owe any money

 

businesses keep taking money in such circumstances because it's the micawber theory - they are always hoping that something will turn up and save the business

[taxpayer10 10]

Some facts:

 

Fancie Ltd was incorporated in 13/10/08

Notice of creditors meeting published 06/06/13

Liquidators statement published 21/06/13 - in the public domain if anyone wants to view it you can go to companies house online.

Do a search and pay £ 1 for the document.

I have a copy and the numbers are eye watering...

 

FC&Co Ltd was incorporated 13/05/13 . 3 weeks before Fancie Ltd announced its creditors meeting.

Notice of creditors meeting published 07/01/14

Liquidators statement not yet released

 

Fancie seems to be still trading - no comment from them on whether a new Ltd company has been formed to run this or what the situation is.

 

Although I feel the pain of the creditors - caveat venditor applies in all business.

 

What does concern me is the large sums of monies owed to HMRC and SCC.

 

HMRC typically writes off £ 5 BILLION a year in unrecoverable debts.

I do not have the breakdown on how much of this is unpaid PAYE/NI, VAT and corporation tax lost in situations like this but I am sure the data is out there.

 

HMRC should be re-instated as a preferential creditor as they were before a single line of text in the Enterprise Act 2002 section 10 changed this so they are now classed as a normal unsecured creditor.

 

Not sure why anyone would object to this? Apart from the likes of Begbies?

[Manlinose 10]

just to clarify - the loss of preferential status of crown creditors such as hmrc was actually a government proposal

 

i.e. the government suggested that a government department should lose it's preferential status

 

without boring everyone with the technical details it was done as part of legislation aimed at reducing the power of secured creditors (mainly banks) to appoint receivers to take control of ailing companies and pocket all the money for themselves and, at the same time, introduced a provision that a proportion of the money that would otherwise have gone to the secured creditors (i.e. the banks) should be ringfenced for the benefit of all unsecured creditors and not just government departments (it is called the prescribed part)

 

re-introducing the preferential status of HMRC would not reduce the fees of the liquidator as they are payable in priority to the rights of preferential creditors

 

in reality it would probably increase the fees of the liquidator as, at the moment, they are limited to how much they can justify in taking out of the prescribed part funds

[taxpayer10 10]

just to clarify - the loss of preferential status of crown creditors such as hmrc was actually a government proposal

 

i.e. the government suggested that a government department should lose it's preferential status

 

without boring everyone with the technical details it was done as part of legislation aimed at reducing the power of secured creditors (mainly banks) to appoint receivers to take control of ailing companies and pocket all the money for themselves and, at the same time, introduced a provision that a proportion of the money that would otherwise have gone to the secured creditors (i.e. the banks) should be ringfenced for the benefit of all unsecured creditors and not just government departments (it is called the prescribed part)

 

re-introducing the preferential status of HMRC would not reduce the fees of the liquidator as they are payable in priority to the rights of preferential creditors

 

in reality it would probably increase the fees of the liquidator as, at the moment, they are limited to how much they can justify in taking out of the prescribed part funds

 

I can see that perhaps the change was born out of good intentions but it remains that the system is badly broken .

 

And you have to ask whether external forces lobbied for the change?

(lets face it , most MP's have no idea how the real world including business works)

 

And who is monitoring the hours / fees submitted by the liquidator/administrator ?

Sums of £ 350-£ 750 PER HOUR . And the fees in dealing with even a small company like Fancie can come to thousands and thousands...I mean really - how many hours can it really take to wind down such a small concern?

 

Perhaps it should be that HMRC becomes a secured creditor...so gets paid even before the liquidator?

 

Or is there something which would make this unworkable?

[Manlinose 10]

And who is monitoring the hours / fees submitted by the liquidator/administrator ?

Sums of £ 350-£ 750 PER HOUR . And the fees in dealing with even a small company like Fancie can come to thousands and thousands...I mean really - how many hours can it really take to wind down such a small concern?

 

Perhaps it should be that HMRC becomes a secured creditor...so gets paid even before the liquidator?

 

Or is there something which would make this unworkable?

 

the first part of this, to me, is the crux of the issue - the basis of charging liquidator fees has to be agreed by creditors - prior to taking any fees the liquidator has to tell creditors how he proposes to be paid for the work he does and, if it is on a time basis, how much his charge out rates are

 

but the reality is that most creditors don't even bother to respond so the basis of calculating his fees is approved "on the nod" - thereafter the liquidator only has to report to creditors what he has done and how much he has charged for it - creditors do have the right to appeal if they think the liquidator's costs are too high but, again, most don't

 

i think the main reason is general apathy by creditors - the returns to creditors are miniscule at the best of times and chipping a few thousand off the liquidator's costs would make a miniscule percentage of a difference to an already miniscule return to creditors in most cases

 

i think there is also an assumption that any challenge to the fees would be expensive and would only add more costs to the process

 

to me, within the current system the best solution would be for HMRC to take a more active role - they are creditors in most liquidations - they could simply say to the liquidators - you can have a maximum fee of £XXXX and if you want any more you have to come back to us to tell us why you deserve it

 

making HMRC secured would be unfair on all other creditors, although i do take your earlier point that, to some extent, suffering bad debts is just one of the risks you take when offering credit to your customers - the bit that would make it unworkable is that a liquidator wouldn't do the job if he wasn't going to be paid for it

 

in defence of liquidators - it is a job that has to be done and has to be paid for

 

the Official Receiver/Insolvency service (the Government agency which deals with insolvencies) charges a fortune for the cases they deal with - although these fees are also used, at least in theory, to pay for the costs of investigating and prosecuting rogue directors

 

the obvious solution is for the fee to be a percentage of the assets the liquidator realises in the same way that the insolvency service charges for the cases it deals with