Land of Leather Administration

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Smashbox

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So I was given the go ahead to talk about this, and just wanted to let people know what I've heard.

LOL was/is being sued by a crowd and the insurance won't cover it. So, they have decided to go into administration to stop this happening.

A past company director has said that he will step forward and take the company over. This means that any courtcases will be dropped, and so the lawsuit will too.

So, LOL has put themselves into administration yet their shops are still open. When they close, the new owner will step in, change the name, and keep on going the way they are now.

By the way, this is my opinion, nothing to do with askaboutmoney, their admin or anyone else for that matter. I have been told this by a good source, and am using this forum to give MY opinion.
 
I'm not familiar with UK law, but have obviously heard Administration discussed about UK Companies in the past number of months. Is it similar to Examinership here? a Court ordered protection to prevent Debtors forcing a Company into Receivership or is it closer to Receivership? If so would that make the party who are suing them a major Debtor or their Bank?
 
I'm not really sure what they are calling it, but the main idea is that when the present owners walk out the door (as such), the problem goes with them and will in effect be null and void.

I believe it is to do with the sofa problem. There are thousands waiting in line now to sue them over this. In December, the figure alone was 5,300 people.
 
This would actually be one of the objectives of the Administration legislation.

A company is doing fine financially but its future is threatened by one big legal claim or bad debt. A reorganisation can keep the company going preserving the business and the jobs.

I know nothing about the LoL issue, but assuming it's true. If they face a multi million lawsuit which they might lose, what should the directors do? If they continue taking deposits or goods on credit from suppliers they might be trading while insolvent. So do they just close the company down?

It might be that the Administrator or Liquidator would sell the business as a going concern and try to come to some agreement to bring finality to the court case.

Brendan
 
There was a program on Radio 4 yesterday about insolvency practices in the UK.

This is known as "Prepack Administration". The company arrives in court with the new owners already lined up.

In 50% of the cases, the new owner is a newly setup company linked to the old owners. In some cases where a subsidiary of a holding company goes into administration, the new company might also be a subsidiary of the same holding company.
 
I didn't even know this could happen Brendan.. however its a great and easy way to get out of a huge loss of money. Doesn't make sense to me.
 
From Breaking news on Todays Indo:
Monday January 26 2009
Three Land of Leather stores in Cork, Galway and Sligo are to close after being put into administration in recent weeks.
The administrator has failed to find additional funding or sell the businesses.
Customers who have outstanding purchases at any of the affected stores will be either transferred to another Land of Leather outlet or be dealt with by the group's head office.
 
I knew Sligo was closing for sure, didn't hear about the other two. It seems some stores were doing NO business and weren't worth keeping them open.
 
The galway branch gave such bad service im not surprised (never purchased there but I know two different families that did and never would again), huge competition with Reid and Ez Living.
 
I know Athlone is/was the second busiest store in the country, the first being in Dublin.
 
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