Sky News has tonight reported that AHK Designs, which is connected to the owner of several other e-commerce retailers, has bought Victoria Plum in a pre pack deal which salvages the jobs of all 300 staff, although reports suggest that unfulfilled customer orders may not be delivered and customers may lose out if product was not ordered through credit.
On Friday evening former owner Endless LLP appointed administrators Ernst & Young, who promptly sold the business to AHK.
Whilst the pre pack administration will most likely allow the business to trade in some form, businesses including manufacturers such as Bristan, Mira, Grohe, Ideal Standard, Rak Ceramics, VitrA, and Aqualisa, will now become unsecured creditors as will its national network of sub-contracted installers according to kbbreview.
Unsecured creditors, including installers, are urged to email VPAdministration@uk.ey.com detailing outstanding monies owed, with us much detail as possible.
BiKBBI have committed to support installers involved and will communicate to both the new owners and those concerned installers.
What is an unsecured creditor?
An unsecured creditor is a creditor that does not have any form of security (excluding personal guarantees) over a liability owed to it/them - in this case, installers and other suppliers to the business.
What is pre pack administration?
Pre pack administration is a formal procedure that enables an insolvent company to sell its assets to the existing directors, a trade buyer or another third party. The transaction is performed by the administrator almost immediately following their appointment, as it has in the case.
The steps involved in a pre-pack administration
1. A company is under pressure from creditors and is threatened with receivership or liquidation.
2. A firm of licensed insolvency practitioners is contacted to discuss the situation. They perform a business assessment and provide a range of possible options.
3. If pre-pack administration is decided upon, the insolvency practitioner values the company's assets and prepares a Statement of Affairs.
4. If business assets are to be sold to an existing company, steps will be taken to ensure the buyer has the necessary funds. This includes the provision of management accounts and other information to the insolvency practitioner.
5. If the intention is to sell the assets to a new company, or ‘newco,’ cash flow, profit and loss, and balance sheet forecasts should be provided to demonstrate the viability of the new company, and their ability to purchase the assets. Assistance to buy in the form of asset-based lending may be available.
6. The company is placed into administration, suspending all legal actions against them, and assets are sold immediately.
7. The administrator organises a creditors’ meeting during which an explanation and justification for going down the route of pre pack administration is provided.
8. The IP repays creditors pro-rata, with funds received from the liquidated assets.
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