New Corporate Governance Code Welcomed

Government today welcomed new measures to encourage accountability, diversity and improved performance in Britain's boardrooms, as the Financial Reporting Council launched a revised Corporate Governance Code.
The new measures include a recommendation that all directors of FTSE 350 companies be put up for re-election every year and promote the benefits of diversity in new appointments to the board.
Business Minister Edward Davey said:
"Corporate accountability and transparency is integral to rebuilding public trust in the corporate sector and today's new Corporate Governance Code marks an important step towards rebuilding that trust. "
"Alongside the pledges this Government has made to encourage gender equality on the boards of listed companies, these new measures will help to encourage companies to play their part in working towards the creation of a more responsible, fair and transparent corporate society."
Equalities Minister Lynne Featherstone said:
"Half of all consumers are female but only 12 per cent of FTSE 100 directors are, so I'm pleased to see the FRC recognising the need to get more women into the boardroom. A more equal workplace is a more successful workplace and the stronger provision on gender diversity in the new Code is an important step towards building a fair and equal society by tackling discrimination at work."
The UK Corporate Governance Code sets out standards of governance for listed companies. Companies are required either to follow the Code or explain how else they are acting to promote good governance. The new edition of the Code will apply to financial years beginning on or after 29 June 2010.
Notes to editors:
The UK Corporate Governance Code, formerly known as the Combined Code, sets out standards of governance for listed companies. For further information please see the Financial Reporting Council's website.

The Lonely Business Owner

Letter to the The Lonely Business Owner

At times like these when the business is as lean as is possible and you are barely breaking even you are probably spending most of your time working in your business rather than on it. Dealing with day to day micro-operational issues means that the problems aren't getting better you are the only person that can make the decisions and take the actions necessary to change the direction that the business is moving.
Every time you look up is the situation worsening?
Maybe it is so bad that you cannot see through the symptoms to the problems and as result no solution is possible. In circumstances like these the one thing that needs to be done is to get an objective opinion about the situation from an outsider.There will undoubtedly be a time when taking formal insolvency advice is the only course of action and indeed that may also be a safe place to start. However, we are seeing many business owners only turning for help when the situation is irretrievable and formal insolvency procedures the only option. The reality is that in most cases early action would have saved the business or created a better outcome.
Turnaround professionals tend to see crisis situations with requirements for crisis management where the options are severely limited. It would be better for the client if they had approached the professional earlier thereby increasing the options. An Insolvency Practitioner might very well say that they cannot help because this is not a situation appropriate for formal insolvency procedures. In those circumstances, perhaps an outside management consultant may be able to help enabling a costs effective business retention solution with minimal impact on the business and its reputation.
If you would like to have an objective discussion, please contact me or my team on 01279 715333 or brendan.obrien@breezeandwyles.co.uk.

Insolvency Group: Approach Purchase from Adminstrators with care

With the number of businesses considering formal insolvency procedures in the near future, one of those options is to purchase assets from an Insolvency Practitioner through the process of Administration. One of the reasons for the success of administration particularly in pre-packed administration is the risk to the purchasers. Perhaps more so when the purchaser has no link to the original company.

Purchasers must consider some of the following matters when considering purchasing from an Adminstrator:

1. In normal B2B business sales a seller will be required to give guarantees and warranties as to certains aspects of the business. Where an Adminstrator is selling due to that person lack of detailed knowledge of the company's business they will not give this statements about the business and indeed it would be unwise to do so;

2.As part of the normal sale process the sellers usually warrants or guarantees that the assets forming part of the business are wholly owned by that person and capable of being sold. An Administrator may not always be able to do this as in most cases the Administrator will only have limited information about the company

3.Where premises are involved in the sale the Adminstrator is unlikely to clear the buildings making them suitable for operation and the additional cost of so doing must be factored in. Indeed it is often the case that a new lease (if the property is leasehold) will need to be negotiated in a very short period of time.

4.Quite often an Administrator will be contrained by one of the creditors, usually one holding a security in the company's assets the ensure an optimum price. To ensure that this is capable of being achieved any company may have to pay a part of the premium over an extended period of time. This means that the new company's assets may be charged by way of a debenture.

5. When buying through the adminstration process the purchaser must be aware that the continuing business that they buy may be tainted by the insolvency of the previous company and should have in place novation agreements or at least have negotiated these in advance.

The sale out of adminstration is fraught with many traps, and despite the insolvent nature of the process (where little money exists) appropriate legal advice is essential.

Brendan O'Brien


banking

Breeze & Wyles Cycling team come 2nd in Stortford 50K bike ride

A team consisting of Tom Berry, Stuart Pothecary and Brendan O'Brien came second in the Bishops Stortford 50k bike ride. With placing of 5th, 12th and 17th only one other team was able to get three riders in within the 17th place achieved by our team. Such times were extremely good given that there were over 120 people in the field.

Well done to Tom for his fifth place, not bad for a fourteen year old against club riders. His time of 1hr 34 mins was only 2 minutes outside the time of the winner.

Other times being

Stuart Pothecary 1 hr 52 mins
Brendan O'Brien 2 hr 1 min

Breeze & Wyles thanks Isabel Hospice, as organisers for a professionally run day which our team enjoyed immensely.


Breeze & Wyles Cycling team come 2nd in Stortford 50K bike ride

A team consisting of Tom Berry, Stuart Pothecary and Brendan O'Brien came second in the Bishops Stortford 50k bike ride. With placing of 5th, 12th and 17th only one other team was able to get three riders in within the 17th place achieved by our team. Such times were extremely good given that there were over 120 people in the field.

Well done to Tom for his fifth place, not bad for a fourteen year old against club riders. His time of 1hr 34 mins was only 2 minutes outside the time of the winner.

Other times being

Stuart Pothecary 1 hr 52 mins
Brendan O'Brien 2 hr 1 min

Breeze & Wyles thanks Isabel Hospice, as organisers for a professionally run day which our team enjoyed immensely.


Property Group: Clarification on Amendment of Right to Buy Notices

At the Court of Appeal the court has dismissed and appeal relating to wrongly served section 125 Notices in relation to a 'right to buy' transaction (Nessa -v- London Borough of Tower Hamlets). Section 125 provides that once the right of the secure tenant to exercise the provisions for purchase the Landlord must then serve a notice within a period after such proof stating amongst other things the purchase price at which the landlord is willing to sell. The facts state that four such notices were served on the tenant split into two parts (one and three, two and four). The Local authority attempted to rely on the correct notices two and four whereas the tenants were relying on notices one and three. The difference in price was approximately £50,000.00.

At the court of first instance, the court held that

(1) the authority had no power to amend the original and incorrect notices; but
(2) could not sell at that market value as this would amount to ultra vires act (it seems ludicrous that a local authority could rely on its own negligence to run an unltra vires defence)

This court held that the tenant could not proceed on notices one and three and that three and four applied.

Each party appealed the decision. the tenant arguing that (2) was wrong and the Local Authority arguing that (1) was wrong.

The Court of appeal held that it could imply into the section 125 notice a power to amend or correct given the detailed information that was to be included.

Concerns

It is of concern to property practitioners that they cannot rely on notices served in these matters. Reliance on the notice must always be to the detriment of the tenant as they will make an application for a mortgage in mosts cases where the purchase price must be stated accurately.

The potential for a further notice to be served within the timeframe to completion puts the tenant and the tenant's conveyancer at a disadvantage as they must always look out for a new notice.

If there is one thing that the local authority should get right above all others in the notice is the purchase price. Why should the local authority be able to remedy its error when any practitioner will agree that the various notice regimes are a potential minefield of negligence. One has to ask what makes local authorities different?


HIPs suspended with immediate effect

In an important step at a point of fragile recovery in the housing market, Communities Secretary Eric Pickles and Housing Minister Grant Shapps today announced that with immediate effect, they are suspending the requirement for homeowners to provide a Home Information Pack (HIP) when selling their homes.

Mr Pickles today laid an Order suspending HIPs with immediate effect, pending primary legislation for a permanent abolition. The Secretary of State has taken this swift action in order to avoid uncertainty and prevent a slump in an already fragile housing market. Today's announcement sends a clear message of encouragement to people thinking of selling their home that they can put it on the market with less cost and hassle.

HIPs are currently holding back the housing market because sellers are having to fork-out extra cash, sometimes hundreds of pounds, just to be able to put their home up for sale. Suspending HIPs will reduce the cost of selling a home, remove a layer of regulation from the process and provide a welcome help to the housing market during the recovery. It will also mean a saving for consumers to the tune of £870m over ten years, giving sellers more money in their pocket to spend in the wider economy.

Mr Pickles and Mr Shapps also said that the Government is determined to help people reduce their energy bills, improve our energy security and tackle climate change by increasing the energy efficiency of their homes. Sellers will therefore still be required to commission, but won't need to have received, an EPC before marketing their property, and the Government will consider how the EPC can play its part in the new drive for a low carbon and eco-friendly economy.

Eric Pickles said:

"The expensive and unnecessary Home Information Pack has increased the cost and hassle of selling homes and is stifling a fragile housing market.

"That's why I am taking emergency action to suspend the HIP, bringing down the cost of selling a home and removing unnecessary regulation from the home buying process.

"This swift and decisive action will send a strong message to the fragile housing market and prevent uncertainty for both home sellers and buyers.

"HIPs are history. This action will encourage sellers back into the market, and help the market as a whole and the economy recover."

Today's move is part of delivering a key manifesto comment made by both parties in the new coalition Government. It will mean that sellers will no longer be told they have to buy a HIP before putting their home on the market, but they will now have the choice to provide one if they want to.

Housing Minister Grant Shapps said:

"This is a great example of how this new Government is getting straight down to work by cutting away pointless red-tape that is strangling the market. Rather than shelling out hundreds of pounds for nothing in return we're stripping away bureaucracy and letting home owners sell their properties.

"But we're also showing our commitment to a greener housing market by keeping Energy Performance Certificates and making them more relevant in helping buyers make informed decisions on the energy costs of their new home."


Nationalised Banks to provide Sub-prime mortgages: Rational thought?

It has been mooted from some in the financial services industry that the nationalised banks should provide sub-prime mortgages, not the least of whom is a wealth management firm of lawyers. Indiciations suggest that more than 1 million people in this country can now be classified as sub-prime borrowers. With the market for sub-prime mortgages almost negligible concerns are raised that these people have almost no access to funds.

Whilst providing information to the market is welcome, it is extremely unlikley that the current government could justify pushing tax payers money into risky lending scenarios. As we stand on the brink of some very tough decisions it is unlikely that the a government would with one hand take money from the public sector in the form of public sector spending restrictions and then proceed to gamble it at the expense of the tax payer. If there is one thing that this administration will be keen on is to spend money appropriately and prudently.


Rent in Administrations

In Goldacre (Offices) Limited -v- Nortel Networks Limited (in administration) [2009] EWHC 3389 (ch) the High Court held that where an adminstrator uses and part of leasehold premises for the outcome of the administration, rent due from the date of adminstration will become an administration expense under the terms of the leae and continue to as such for such period of time as the Adminstrator uses any part of the premises in the furtherance of the adminstration.

This does not mean that the rent for such period will be paid in full. Where there are claims ranking equally as expenses of the administration for full payment to be made the liquidated asset value must exceed the value of these claims before payment can be fully made.


The Employer Traps and Other tips

RIGHT TO APPEAL AGAINST DISCIPLINARY SANCTIONS

It has always been necessary to allow an employee to appeal against a disciplinary sanction, even if it is a verbal warning. Disciplinary sanctions include dismissal. We have come across instances recently where employers seem to be forgetting that they must allow employees to have a right of appeal, and this is particularly important if someone has been dismissed (other than by reason of redundancy). Make sure your disciplinary procedures include this ability.

DATA PROTECTION

Remember that failure to respond in time to a data request can render you liable to a fine. Also, wrongful processing of personal data can lead to a claim being brought against you as employer.
HOLIDAY

Remember that although as an employer you are obliged to give your employees paid holiday (subject to a statutory minimum), it is up to you to decide when an employee can take their holiday. Some employees seem to think that it is their right not only to have the holiday but to decide when they should take it. At this time of year it may not be a bad idea to remind your workforce that they would be sensible not to book holiday until such time as they have cleared it with the appropriate person to avoid disappointment (and argument).