It has been a busy summer in the insolvency team with a number of instructions coming through, some of which have been precipitated by the global and national factors we have been seeing in the news.
One such example, and the largest instruction we have undertaken for a while, was a commercial bus operator on the south coast which had been trading, in various different guises, for over 120 years.
Like so many businesses it had been hit by a flurry of external factors leading to its downfall, in this case namely;
- Increasing costs – diesel in particular had nearly doubled over 6 months
- COVID – passenger numbers were at about 60% of pre-COVID numbers
- Staffing – a continual challenge of recruiting drivers due to national shortages.
All of this and other specific challenges the business faced, led to them seeking our support early in July. Whilst at the outset we considered a number of options, it quickly became clear that there was little prospect of an informal restructuring and therefore we pursued a pre-pack sale strategy. Unfortunately, despite the interest we were able to generate, no one was able to move as quickly as the business needs dictated. One party did express serious interest but felt they needed an extra week. We therefore had to change tack to build a plan around trading in administration to allow the additional time required.
Clearly, one of the biggest challenges with a bus company is the number of “stakeholders” who have an interest in the services provided. This alone took some considerable time and required significant effort to keep the council, the union, the press, government departments and a number of other parties, informed of the process we were going through and the steps we were taking and that was on top of the “usual” challenges of engaging with a very mobile workforce and a disparate creditor group.
We would like to think that we achieved the best that could be expected under the circumstances and certainly the feedback that we received from these parties were positive both during and after our trading period.
This was epitomised on the worst day of the project when we sadly had to make a large cohort of the staff redundant (we eventually only managed a sale of a portion of the business) when the former employees wanted to thank my team after the meeting for their help and input.
At Milsted Langdon we do believe that we go the extra mile to make the process, which is a really difficult experience for anyone at the sharp end of it, as smooth as we can. This doesn’t mean shying away from difficult conversations, often quite the opposite, but being open and honest with all parties during the process.
Needless to say a job of that size doesn’t just stop and whilst trading ceased in August we are still working with various parties to tie up the loose ends. Whether that is dealing with the staff redundancy claims or ensuring that the archive of the 120 year history of the business finds a good home for posterity.
The one thing we can be certain of is that the next job won’t be a bus company and therefore all that specialist knowledge we have gained will need to step aside for an entirely new business sector. It is never dull.