/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/200103.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, January 3, 2020, Vol. 21, No. 3 Headlines C R O A T I A DJURO DJAKOVIC: Unit Files for Pre-Bankruptcy Proceedings EUROPEAN COASTAL: Adriatic Croatia Int'l. Acquires Pontoons I R E L A N D FOOTBALL ASSOCIATION: Taoiseach Leo Vardakar Rules Out Bail-Out U N I T E D K I N G D O M CARLAUREN GROUP: Closes Three Heritage Hotels, 64 Jobs Affected CHILANGO: Burrito Bond Investors Won't Lose 90% of Money CHILLI PICKLE: Bought Out of Administration for More Than GBP1.1MM DISCOVERY YACHTS: Crowd-funders at Risk of Losing Money HUMBERTS: Faces Administration, 48 Jobs Affected JD JOINERY: Cash Flow Problems Prompt Administration JOY: Files Notice of Intention to Appoint Administrators X X X X X X X X [*] BOOK REVIEW: BIG BOARD: A History of the New York Stock Market [*] BOOK REVIEW: BOARD GAMES - Changing Shape of Corporate Power - - - - - ============= C R O A T I A ============= DJURO DJAKOVIC: Unit Files for Pre-Bankruptcy Proceedings --------------------------------------------------------- SeeNews reports that Croatia's diversified group Djuro Djakovic said its unit Djuro Djakovic Industrijska Rjesenja (DDIR) has filed for pre-bankruptcy proceedings. Djuro Djakovic said in a filing with the Zagreb bourse DDIR submitted its request to the commercial court in Osijek on Dec. 27, SeeNews relates. "The remaining companies part of the Djuro Djakovic Group do not intend to file for pre-bankruptcy proceedings," SeeNews quotes the group as saying without giving further details. In October, the group revealed that it has been in talks with creditors, trying to resolve a liquidity crisis which has left it short of funds to pay out wages to its employees, SeeNews recounts. According to SeeNews, Djuro Djakovic has said the group and two of its four affiliated companies were unable to pay their workers the September salaries. Economy minister Darko Horvat earlier said that the November salaries will be paid out by the end of the year, adding the government is ready to provide Djuro Djakovic with state guarantees for a HRK150 million (US$23 million/EUR20 million) loan that would help some of the group's units to unblock their accounts and finish work on orders that have been already in progress, SeeNews discloses. Mr. Horvat also said that the government will prepare a restructuring plan for Djuro Djakovic, which will need an approval from the European Commission and some four to six months to be completed, SeeNews notes. The group's main business lines are manufacturing of equipment for steelworks, industrial and power plants and production of rolling stock and special-purpose motor vehicles. EUROPEAN COASTAL: Adriatic Croatia Int'l. Acquires Pontoons ----------------------------------------------------------- SeeNews reports that marina operator Adriatic Croatia International Club (ACI) has acquired pontoons belonging to collapsed Dalmatia-based seaplane operator European Coastal Airlines (ECA). "ACI has bought part of the pontoons in the area of Slit and Losinj, as well as several kiosks for selling tickets at the ports," news daily Slobodna Dalmacija quoted ECA bankruptcy receiver, Vlaho Monkovic, as saying, after the sixth round of auctioning of ECA's assets held on Nov. 30, SeeNews relates. According to SeeNews, the daily also reported that the head of ACI, Kristijan Pavic, has confirmed the purchase and said the pontoons are in excellent condition. Mr. Pavic added that ACI has bought the pontoons for its own needs and is already making use of them, SeeNews notes. ============= I R E L A N D ============= FOOTBALL ASSOCIATION: Taoiseach Leo Vardakar Rules Out Bail-Out --------------------------------------------------------------- Stephen Mahon at The Irish Post reports that Taoiseach Leo Vardakar has made it clear the Football Association of Ireland will not be handed a blank cheque to pay for its "mistakes of the past." The crisis-hit organization had requested an EUR18 million bail-out earlier this month to stave of the threat of insolvency, The Irish Post relates. According to The Irish Post, Minister for Sport Shane Ross said at the time the FAI -- who face debts of up to EUR62 million euro -- will not receive state funding. And the Taoiseach confirmed that is the approach his government still intend to take, The Irish Post notes. Speaking on Dec. 30, he said while is "genuinely worried" about recent revelations and said that the Government will play a role in ensuring the FAI does not fold, pensions and legacy debt will not be underwritten, The Irish Post discloses. "We want to make sure that we don't see a situation whereby the association of football collapses in Ireland and if Government has a role to play in ensuring that then Government will play a role in ensuring that," The Irish Post quotes Mr. Vardakar as saying. "But we don't want to be in a situation where we are somehow asking the taxpayer to bail out the FAI and take on their debts and liabilities and maybe their pensions too. We're not going to do that." Former Ireland international Kevin Moran hit out former CEO John Delaney and auditors Deloitte for letting the situation snowball after the redevelopment of the Aviva, The Irish Post relays. =========================== U N I T E D K I N G D O M =========================== CARLAUREN GROUP: Closes Three Heritage Hotels, 64 Jobs Affected --------------------------------------------------------------- Zoe Monk at Boutique Hotelier reports that Carlauren Group has been forced to close three Heritage Hotels after the group went into administration. According to Boutique Hotelier, in total, 64 staff across the business have been made redundant, with employees at Auckland House Hotel, Isle of Wight, Headway Hotel, Morecambe, and Lambert Manor in Cumbria, affected by the closures. Four staff will be retained to run the lodges and pool facility at Lambert Manor, with a number of redundancies also being made at head office level, Boutique Hotelier states. Earlier this year, Quantuma and Duff and Phelps were appointed as joint administrators over the Carlauren Group of companies with a remit to investigate the disappearance of more than GBP50 million of investors' money, Boutique Hotelier relates. CHILANGO: Burrito Bond Investors Won't Lose 90% of Money -------------------------------------------------------- George Nixon at This is Money reports that investors who poured GBP3.7 million into Mexican restaurant chain Chilango's mini-bond fundraise have successfully avoided losing 90% of their money, but how much will be returned to them remains unclear. Emails sent out to some creditors on Dec. 30 and seen by This is Money reveal enough of the firm's shareholders have voted in favour of Chilango's proposal to transfer the company's mini-bond debt into a new form of equity -- which we first reported at the start of December. It means investors in its 8% "burrito bonds" no longer face the prospect of automatically losing 90p in every GBP1 they invested without any say, but the new debt-like shares they could be left with still does not guarantee them the returns they signed up for, This is Money discloses. According to This is Money, a letter previously sent to bondholders of Chilango Bonds PLC -- the company's subsidiary devoted solely to its mini-bonds -- told them the preferred equity "will attract an 8% annual dividend going forward", which will be paid 'when the directors consider it appropriate', and 'if there is available cash. Essentially, investors have been promised returns sometime in the future provided the company sorts out its finances, rather than the 8% interest they are currently due twice a year under the terms of the mini-bonds, This is Money states. With GBP3.7 million invested, the firm was previously on the hook for GBP296,000 every time it had to make interest payments to the nearly 800 investors who poured money in between October 2018 and April 20190, This is Money notes. The proposal approved by shareholders is one of several steps the chain is taking to try and get a grip on its finances and its GBP6.9 million debt pile, This is Money says. Shareholders, creditors and employees are currently voting on a company voluntary arrangement, a rescue plan which proposes reducing rents by 40% on three restaurants and exiting leases on four unopened sites, as well as clearing its debt from the balance sheet, This is Money relays. According to This is Money, shareholders still have until today, Jan. 3 to vote on the preferred equity proposal, but the email suggests the business has convinced enough to vote in favor already. Its CVA also closes today, Jan. 3, according to This is Money. CHILLI PICKLE: Bought Out of Administration for More Than GBP1.1MM ------------------------------------------------------------------ Frank le Duc at Brighton & Hove News reports that The Chilli Pickle, a Brighton restaurant business, has been bought out of administration after collapsing with debts of more than GBP1.1 million. The Chilli Pickle's net liabilities totalled more than GBP800,000, Brighton & Hove News relays, citing an official report on its finances. According to Brighton & Hove News, the Indian fusion restaurant, in Jubilee Street, Brighton, is still trading, despite having suffered the financial fallout from the company opening a loss-making second branch in Guildford. A report by the administrators -- Andy Tate and James Hopkirk from Kent firm Kreston Reeves -- said that The Chilli Pickle Limited went into administration on Friday, Nov. 22, Brighton & Hove News discloses. The original company collapsed owing almost GBP400,000 to trade creditors and in expenses, including almost GBP20,000 to Brighton and Hove City Council and GBP66,000 to the council in Guildford, Brighton & Hove News states. The Chilli Pickle Limited also owed GBP170,000 in taxes to Revenue and Customs and GBP100,000 to Brighton investor Nick Southgate, Brighton & Hove News notes. DISCOVERY YACHTS: Crowd-funders at Risk of Losing Money ------------------------------------------------------- Trade Only Today, citing British newspaper The Times, reports that hundreds of crowd-funders who invested an aggregate of US$2.9 million (GBP2.2 million) into British builder Discovery Yachts could be in danger of losing their money since the company has entered administration, a form of bankruptcy protection in the United Kingdom. According to Trade Only Today, the Southampton-based sailboat builder and charter operator said it plans to appoint insolvency experts. Managing director Sean Langdon said Discovery filed the notice to protect itself from a lawsuit brought by a customer of a boatbuilder it bought in 2017, Trade Only Today relates. Mr. Langdon told the paper the move would affect only the holding company, Trade Only Today notes. Employees and customers would be unaffected, Trade Only Today states. The paper reported that the investments of the crowd-funder could be at risk, Trade Only Today says. HUMBERTS: Faces Administration, 48 Jobs Affected ------------------------------------------------ Rosalind Renshaw at Property Industry Eye reports that Humberts, one of the country's oldest estate agents, is to be placed into administration. The news was broken to shocked staff on Dec. 6, and they were told to expect their P45s, Property Industry Eye relates. It is understood that some 48 jobs may be affected, Property Industry Eye discloses. According to Property Industry Eye, staff were told that the board of directors has concluded that the company is not in a position to continue trading, and that steps are being taken to place the company into administration. They were told that the company's trading activities would be closed immediately, and that staff were being made redundant, Property Industry Eye states. It is not known whether franchisees of Humberts might be affected, Property Industry Eye relays. Despite repeated emails and voicemail messages, Property Industry Eye was unable to make contact with senior people at Humberts including Matt Spence, who headed up the company that bought the firm almost two years ago, notes the report. JD JOINERY: Cash Flow Problems Prompt Administration ---------------------------------------------------- Jonathon Manning at ChronicleLive reports that JD Joinery & Building Services, a Northumberland building company, has said it has been forced to close its doors after a number of clients failed to pay their bills on time. According to ChronicleLive, the business has been forced to enter administration after suffering cash flow problems over the last year. Joe Dixon, the firm's managing director, said that the company had been left with no choice after it was left hundreds-of-thousands of pounds out of pocket, ChronicleLive relates. Figures from JD Joinery & Building Services Limited's most recent financial accounts show a large increase in the amount the firm owed to its creditors, ChronicleLive discloses. In 2018, the firm was due to pay its creditors GBP997,892 within a year, compared to a figure of GBP388,485 during 2017, ChronicleLive recounts. In comparison, JD Joinery was owed GBP653,940 from its debtors at the end of 2018, also a big rise on the previous year, ChronicleLive states. The business, which traded from offices at Atley Business Park in Cramlington, appointed administrators on Dec. 3, ChronicleLive relays. Michael Chamberlain, from business recovery firm Chamberlain & Co, was appointed as the firm's administrator, ChronicleLive notes. Mr. Dixon added that the company had also been hit by "the Brexit wobble", which ultimately led to jobs being lost at the company, ChronicleLive recounts. He would not say how many members of staff made redundant but added that a number of workers had moved over to another housebuilding business he owns, according to ChronicleLive. JOY: Files Notice of Intention to Appoint Administrators -------------------------------------------------------- Sahar Nazir at Retail Gazette reports that Joy has filed notice of its intention to appoint administrators just two years after it was acquired out of insolvency in a pre-pack deal by its founders. According to Retail Gazette, the fashion retailer said it is likely to fall into administration and become the first retailer to collapse after Christmas. The Sunday Times reported that the administration would be Joy's third time, marking a turmoil period for the retailer, Retail Gazette notes. The retailer employs 182 people and has 10 stores, most of which are in London, and is reported to have put KRE Corporate Recovery on standby, Retail Gazette discloses. =============== X X X X X X X X =============== [*] BOOK REVIEW: BIG BOARD: A History of the New York Stock Market ------------------------------------------------------------------ Author: Robert Sobel Publisher: Beard Books Soft cover: 395 pages List Price: $34.95 Order your personal copy today at https://ecommerce.beardbooks.com/beardbooks/the_big_board.html First published in 1965, The Big Board was the first history of the New York stock market. It's a story of people: their foibles and strengths, earnestness and avarice, triumphs and crash-and-burns. It's full of entertaining anecdotes, cocktail-party trivia, and tales of love and hate between companies and investors. Early investments in North America consisted almost exclusively of land. The few securities holders lived in cities, where informal markets grew, with most trading carried out in the street and in coffeehouses. Banking, insurance, and manufacturing activity increased only after the Revolution. In 1792, 24 prominent New York businessmen, for whom stock- and bond-trading was only a side business, met under a buttonwood tree on Wall Street and agreed to trade securities on a common commission basis. Five securities were traded: three government bonds and two bank stocks. Trading was carried out at the Tontine Coffee-House in a call market, with the president reading out a list of stocks as brokers traded each in turn. The first half of the 19th century was heady for security trading in New York. In 1817, the Tontine gave way to the New York Stock and Exchange Board, with a more organized and regulated system. Canal mania, which peaked in the late 1820s, attracted European funds to New York and volume soared to 100 shares a day. Soon, the railroads competed with canals for funding. In the frenzy, reckless investors bought shares in "sheer fabrications of imaginative and dishonest men," leading an economist of the day to lament that "every monied corporation is prima facia injurious to the national wealth, and ought to be looked upon by those who have no money with jealousy and suspicion." Colorful figures of Wall Street included Jay Gould and Jim Fisk, who in 1869 precipitated one of the worst panics in American financial history by trying to corner the gold market. Almost lynched, the two were hauled into court, where Fisk whined, "A fellow can't have a little innocent fun without everybody raising a halloo and going wild." Then there was Jay Cooke, who invented the national bond drive and, practically unaided, financed the Union effort in the Civil War. In 1873, however, faulty judgement on railroad investments led to the failure of Cooke & Co. and a panic on Wall Street. The NYSE closed for ten days. A journalist wrote: "An hour before its doors were closed, the Bank of England was not more trusted." Despite J. P. Morgan's virtual single-handed role in stemming the Knickerbocker Trust panic of 1907, on his death in 1913, someone wrote "We verily believe that J. Pierpont Morgan has done more harm in the world than any man who ever lived in it." In the 1950s, Charles Merrill was instrumental in changing this attitude toward Wall Streeters. His firm, Merrill Lynch, derisively known in some quarters as "We, the People" and "The Thundering Herd," brought Wall Street to small investors, traditionally not worth the effort for brokers. The Big Board closes with this story. Asked by a much younger man what he thought stocks would do next, J.P. Morgan "never hesitated for a moment. He transfixed the neophyte with his sharp glance and replied 'They will fluctuate, young man, they will fluctuate.' And so they will." Robert Sobel died in 1999 at the age of 68. A professor at Hofstra University for 43 years, he was a prolific historian of American business, writing or editing more than 50 books. [*] BOOK REVIEW: BOARD GAMES - Changing Shape of Corporate Power ---------------------------------------------------------------- Authors: Arthur Fleischer, Jr., Geoffrey C. Hazard, Jr., and Miriam Z. Klipper Publisher: Beard Books Softcover: 248 pages List Price: $34.95 Order your personal copy today at http://www.amazon.com/exec/obidos/ASIN/1587981629/internetbankrupt A ruling by the Delaware Supreme Court on January 29, 1985 was a wake-up call to directors of U. S. corporations. On this date, overruling a lower court decision, the Delaware Supreme Court ruled that the nine board members of Chicago company Trans Union Corporation were "guilty of breaching their duty to the company's shareholders." What the board members had done was agree to sell Trans Union without a satisfactory review of its value. The guilty board members were ordered by the Court to pay "the difference between the per share selling price and the 'real' market value of the company's shares." Needless to say, the nine Trans Union directors were shocked at the guilt verdict and the punishment. The chairman of the board, Jerome Van Gorkom, was a lawyer and a CPA who was also a board member of other large, respected corporations. For the most part, it was he who had put together the terms of the potential sale, including setting value of the company's stock at $55.00 even though it was trading at about $38.00 per share. News of the possible sale immediately drove the stock up to $51.50 per share, and was commented on favorably in a "New York Times" business article. Still, Van Gorkom and the other directors were found guilty of breaching their duty, and ordered by Delaware's highest court to pay a sum to injured parties that would be financially ruinous. This was clearly more than board members of the Trans Union Corporation or any other corporation had ever bargained for. It was more than board members had ever conceived was possible without evidence of fraud or graft. The three authors are all attorneys who have worked at the highest levels of the legal field, business, and government. Fleischer is the senior partner of the law firm Fried, Frank, Harris, Schriver & Jacobson at the head of its mergers and acquisitions department. He's also the author of the textbook "Takeover Defenses" which is in its 6th edition. Hazard is a Professor of Law and former reporter for the American Bar Association's special committee on the lawyers' ethics code; while Klipper has been a New York assistant district attorney prosecuting corporate and financial fraud, and also a corporate attorney on Wall Street. Using the Trans Union Corporation case as a watershed event for members of boards of directors, the highly-experienced legal professionals lay out the new ground rules for board members. In laying out the circumstances and facts of a number of cases; keen, concise analyses of these; and finding where and how board members went wrong, the authors provide guidance for corporate directors, top executives, and corporate and private business attorneys on issues, processes, and decisions of critical importance to them. Household International, Union Carbide, Gelco Corp., Revlon, SCM, and Freuhauf are other major corporations whose merger-and-acquisitions activities resulted in court cases that the authors study to the benefit of readers. The Boards of Directors of these as well as Trans Union and their positions with other companies are listed in the appendix. Many other corporations and their board members are also referred to in the text. With respect to each of the cases it deals with, BOARD GAMES outlines the business environment, identifies important individuals, analyzes decisions, and discusses considerations regarding laws, government regulations, and corporate practice. In all of this, however, given the exceptional legal background of the three authors, the book recurringly brings into the picture the legalities applying to the activities and decisions of board members and in many instances, court rulings on these. Passages from court transcripts are occasionally recorded and commented on. Elsewhere, legal terms and concepts -- e. g., "gross nonattendance" -- are defined as much as they can be. In one place, the authors discuss six levels of responsibility for board members from "assure proper result" through negligence up to fraud. Without being overly technical, the authors' legal experience and guidance is continually in the forefront. Needless to say, with this, BOARD GAMES is a work of importance to board members and others with the responsibility of overseeing and running corporations in the present-day, post-Enron business environment where shareholders and government officials are scrutinizing their behavior and decisions. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2020. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. * * * End of Transmission * * *