Blockbuster to enter administration again

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DVD and game rental chain Blockbuster is to enter administration for the second time this year, according to owner Gordon Brothers.

TS Operations Ltd, a subsidiary of TS 1973 Investment Holdings Limited which trades as Blockbuster in the UK and is owned by a subsidiary of global private equity and investment company Gordon Brothers Europe, today announced it is to file a notice of intention to appoint an administrator on behalf of Blockbuster Entertainment Ltd.

Blockbuster collapsed into insolvency in January after facing serious competition from online rental and video streaming competitors, before being acquired by the subsidiary of Gordon Brothers Europe in March.

A statement from Gordon Brothers said that despite the efforts to “turnaround the historically loss-making company by restructuring the business” Blockbuster suffered from “a period of poor trading performance across both rental and retail sales.”

The statement also detailed an attempt to develop “a new digital platform” to compete with other online video streaming services, although the owners were “unable to broker a licensing deal with Blockbuster UK’s parent company in the US.”

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Companies grow more confident, but worries remain over recovery

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Small companies in Britain are leading the world in terms of the growth in business confidence, survey data show.

But such confidence is not matched by views about the economy. Only 14pc of the 1,900 small companies surveyed by Regus, the workspace group, believe that economic recovery is fully under way.

Another 20pc feel the recovery will be stronger by the end of the year on the back of a rise in profits.

Almost 40pc of the business surveyed reported higher profits in the six months to October, an increase of almost 10pc.

The confidence rating was one of the surprises in the survey. Regus measured the UK confidence indicator against others in its global database to determine which country was showing the biggest improvement in confidence.

Cost-cutting remains a priority, with almost 70pc setting their sights over the next year on reducing the bill for bought-in services. IT and telecoms are the priority areas while just over 50pc say they want a better return on marketing and advertising expenditure.

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HMRC adopts distraint tactics

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The number of petitions issued by HM Revenue & Customs (HMRC) to wind up companies and place them in liquidation has decreased 42% over the last year to reach its lowest figure in five years.

According to new figures from legal services firm Pinsent Masons, HMRC issued 3,733 petitions for winding up companies in 2012/13, compared to 6,440 in 2011/12.

Similarly, the number of winding up orders successfully obtained fell by 25% in the last year, from 3,339 to 2,541.

Serena McAllister, senior associate in restructuring at Pinsent Masons, said the figures “speak for themselves”.

She explained: “The drop in petitions to wind up companies and place them into liquidation, combined with evidence that suggests HMRC is increasing using its powers to seize business assets, show that HMRC is now using distraint as its preferred method of enforcement.

“This tactic appears to be paying off as HMRC’s recovery rate has increased significantly, which is good news for the taxpayer although not so good news for businesses.

“HMRC is becoming increasingly aggressive in the use of its powers. For some companies, particularly SMEs, the seizure of its assets could be the final blow and may even force businesses into insolvency in some instances.”

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Bankrupt bank account changes proposed

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A proposal to change insolvency law allowing bankrupts to open bank accounts in England and Wales has been put before Parliament.

The amendment will reduce financial risk for banks that offer accounts to undischarged bankrupts as part of the draft Deregulation Bill, brought by The Insolvency Service.

The changes were introduced following concern from consumer representatives that bankruptcy was stopping people from getting bank accounts – essential for basic tasks such as receiving wages, paying bills or shopping online.

Business minister Jo Swinson said: “We are now closer to removing barriers that have prevented banks from providing bank accounts for bankrupt people in the past.

“A bank account is not a luxury in this day and age, but a necessity. Most everyday transactions take place online including shopping, paying for utilities and receiving salaries.

“Last year, over 30,000 people were declared bankrupt and a similar number took up Debt Relief Orders (DROs), and it is only right that they get a chance to have bank accounts.”

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Credit union chief calls payday loans ‘financial cancer’

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Church leaders in Scotland and England are joining forces to compete with payday loan firms by setting up affordable credit unions.

The Church of Scotland is backing the Church of England after the Archbishop of Canterbury, the Most Rev Justin Welby, spoke of his desire to put firms like Wonga “out of business”.

The credit union movement is growing and one of the longest established is the Scottish Transport Credit Union (STCU) whose chief executive John Mackin is a delegate to Holyrood’s cross party group on credit unions.

People’s banks are becoming more popular with Scots from all backgrounds.

And the mere mention of payday loans firms makes Mr Mackin bristle with concern.

He believes they lend money irresponsibly without making sufficient checks to ensure borrowers can pay back the money they owe.

Mr Mackin is uncompromising in his criticism of the trail of human misery they leave in their wake.

He said: “The payday loan industry is nothing more than a financial cancer which causes unbelievable trauma. Ideally these companies should be banned if they are not lending in a responsible way.”

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Scottish insolvencies on the rise

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The number of people and companies going bust in Scotland has gone up, according to official figures.

The Accountant in Bankruptcy (AiB) has revealed that nearly 4,000 people were declared insolvent between April and June this year.

More than 180 companies entered liquidation or receivership during the period.

Although an increase on the previous quarters figures – the longer term trend is one of decline.

Personal insolvencies increased by 14.7% in the second quarter of the year compared with the first three months of 2013.

However compared to the same time in 2012, the number of people going bust fell by almost 30%.

Only one company went into receivership between April and June and 183 were either voluntary or compulsory liquidations.

That is a quarterly rise of nearly 29% but a 56% fall compared with the same period in 2012.

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Vince Cable: Make directors liable for failure

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Business Secretary Vince Cable has proposed making fraudulent or negligent directors of UK companies personally liable for the firm’s debts as part of an overhaul of company rules.

He also said that directors deemed to be reckless should be disqualified from being able to work at another firm.

Mr Cable also wants to allow individual regulators to disqualify directors in their particular industries.

His proposals follow concerns over the toughness of corporate oversight.

A series of banking scandals, such as Libor and the mis-selling of PPI, as well as huge state bailouts in the wake of the financial crisis, have dented public confidence.

Mr Cable said: “We’re proposing tough measures to beef up the system for holding directors to account if they don’t play by the rules or take their responsibilities seriously. This will mean honest, hard-working directors are not disadvantaged and will give the public greater confidence that irresponsible directors will face consequences for their actions.”

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Construction sector looking up

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News that the construction sector has returned to growth has been cautiously welcomed by industry experts. However, a recent survey indicates that house building is leading the way, while commercial construction and civil engineering remains in the doldrums.

Residential building work has increased at its fastest pace for more than two years and total construction output has risen for the first time since October 2012, according to the CIPS UK construction purchasing managers’ index, conducted by Markit. More than 40 % of construction firm directors who answered the survey are optimistic and predict a rise in output in the next 12 months.

Chartered Institute of Purchasing and Supply chief executive, David Noble, said: ‘The construction sector seems to have turned a corner after six dismal months. The improvement has been fuelled by a boom in house building, but the sector remains bogged down by contractions in commercial construction and civil engineering.’

He went on to say that a lack of public sector projects was having an effect on civil engineering, and this, combined with poor performance in the commercial sector, meant house building alone was driving the industry growth.

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May retail sales bounce back

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UK retail sales have increased 2.1% in May on the previous month, according to figures from the Office of National Statistics.

Sales volumes also increased 1.9% on May 2012, sparking predictions that the UK economy is slowly recovering.

David McCorquodale, UK head of retail at KPMG, said: “This is a solid performance by UK retailers and this increase in consumer spending us hope that the UK economy might be finally turning the corner.

“However, promotions were used to drive these sales, especially in the food sector, and this decision to discount will have eaten into retailers’ margins.”

Food retailers saw a 3.4% increase in the amount customers spent in May on April’s figures, although quantities bought decreased 0.5% in the same period.

The amounts spent in clothing and footwear stores increased year-on-year by 2.1%, a growth of 1.1% from April 2013.

Online sales in May 2013 totalled £582m, an increase of 10.3% compared to May 2012, highlighting the continuing shift in consumer shopping habits.

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Ticket scam artist banned for 13 years

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The director of five companies that sold non-existent tickets for music festivals has been banned for 13 years following an investigation by The Insolvency Service.

John Lupton was disqualified for ripping off the public and claimed that the companies involved were run by his girlfriend using the identity of a deceased woman.

Paul Titherington, official receiver in the Insolvency Service’s Public Interest Unit said: “These companies claimed they could supply concert tickets but in most of the known transactions they never supplied the tickets ordered, nor made the required refunds to customers.

“Investigators were unable to corroborate Lupton’s claims of a co-director who was using a fake identity and has now vanished into thin air.”

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