A building company, which employs 320 workers, has gone into administration.

The property downturn has been blamed for the move involving David McLean Holdings Ltd, of Flintshire.

The company has house building, property development and contracting subsidiaries, with offices in Cardiff and Shrewsbury.

Administrators Deloitte said McLean’s house building division was continuing to trade as they seek a buyer. The contracting division is to close.

The group, which was founded in 1972, has operations in south Wales, the Midlands and the north west and south west of England and a turnover worth £160m.

Downturn

A statement said the directors had, for some time, been trying to secure a restructuring of the group’s financial affairs following the downturn in the residential property market.

There were 30 lay-offs in May, following 50 job losses last December blamed on the credit crunch.

Nick Edwards, joint administrator, said: “Whilst the property downturn has impacted the group’s cash flow, the land and property assets are high quality, and combined with the excellent reputation of the group, should make the house building division an attractive prospect for potential purchasers.

“We are continuing to trade this part of the business whilst we seek a buyer.

“The contracting division has struggled to generate a critical mass of profitable contracts, and regrettably we have had to take the decision to close that part of the business, other than retaining a significantly reduced headcount to work with customers to complete or transfer limited works on outstanding contracts.”

The group’s headquarters are on the Deeside industrial estate, where 130 workers are based.

There are another 40 in Cardiff, 25 in Shrewsbury and 105 working out on location.

There are two significant ongoing contracting projects – North Wales Police HQ and Prestatyn School – and 11 housing developments in Wales, said the administrators.

Flintshire councillor Patrick Heesom, who represents the Mostyn area, said: “I’m sorry we have lost another construction company.

“These problems will rebound down the scale to smaller companies. It’s a matter of deep regret that someone with such a long history of serving the community has run into difficulties.”

News reported by The BBC

The Civil Aviation Authority is arranging for planes to collect British holidaymakers stranded following the collapse of the tour operator XL.

The business’s 21 planes were grounded, leaving some 90,000 people abroad.

The Air Travel Organisers’ Licensing (Atol) scheme said “repatriation aircraft” were being organised.

A spokesman said many passengers were expected to return on specially chartered flights and on pre-scheduled flights that have spare seats.

Atol spokesman David Clover said he hoped there would be an “orderly repatriation”.

The CAA is chartering planes from airlines including British Airways, Easyjet and Thompson.

CAA EMERGENCY HELPLINE
Customers abroad: +44 (0) 2891 856547
Customers in the UK with advance bookings: 0870 5900927

Virgin Atlantic has said XL passengers who are stranded at airports in Florida and the Caribbean will be offered special one-way fares to fly home until the end of September.

Peter Long, chief executive of Thomson and First Choice owner TUI Travel, said his firm would also assist with helping stranded passengers.

And airlines Flybe, Easyjet, BMI and Ryanair had also offered various forms of assistance.

Applause

“The rescue mission to bring these passengers home begins in earnest today,” said BBC business correspondent Joe Lynam.

BBC reporter Nicola Pearson joined one specially chartered plane in the Egyptian resort of Sharm el-Sheik.

XL Chief Executive Phil Wyatt says he is devastated by the collapse
She said its passengers applauded when the captain said they had come on a rescue mission, and that the cabin crew was made up of staff from two different airlines – some had been called in from a day off.

There will need to be hundreds of flights like this to bring back the tens of thousands of British tourists stranded abroad, our correspondent added.

Hundreds stranded in Alicante are being offered free flights back to the UK.

Thompson TUI and Thomas Cook say they will help repatriate the passengers, who have booked their flights through Atol-protected travel companies.

And a special one-off service is being offered by Monarch Iberia on Saturday evening for people travelling to Manchester – Monarch Iberia does not normally fly to Manchester.

Jobs fears

The decision to place XL Leisure Group into administration has also left thousands of staff facing the axe.

XL chairman Phil Wyatt has said the company’s entire 1,700 UK workforce could be at risk.

XL COMPANIES
XL Leisure Group
XL Airways UK
Excel Aviation
Explorer House
Aspire Holidays
Freedom Flights
Freedom Flights (Aviation)
The Really Great Holiday Company
Medlife Hotels
Travel City Flights
Kosmar Villa Holidays

Turbulent times for air industry
Q&A: Options for passengers

Mr Wyatt said he was “totally devastated” by the failure which has grounded XL’s 21 planes. The company flies to about 50 destinations.

There are 67,000 stranded who booked directly with XL, and another 23,000 who booked via other companies.

The CAA also said the firm had 200,000 advance bookings.

David Clover, a spokesman for the CAA, said it was making arrangements to help customers of the four tour companies within the XL group.

“In respect of people who are currently abroad we’re making arrangements and working very closely with the travel industry to organise repatriation flights.

“Clearly, though, with XL Airways no longer operating, we’re having to bring in substitute aircraft to bring people home.”

Cost price

Mr Clover said package deals were covered by the CAA’s Air Travel Organisers’ Licensing scheme and those customers will be offered repatriation flights or their money back if they have an advance booking.

However, those who booked directly with the airline or XL.com – who are in the minority, according to the CAA – will face a fee.

Anyone yet to take their flights should check their insurance policies, and with their banks or credit card companies about refunds, he added.

Some 10,000 only booked flights only with XL, and they will have to pay to get home, although the CAA has offered to sell them any spare tickets at cost price.

Among those who have lost their flights and are unable to get a refund are David Hopkin and fiancee Clare Addis.

They were due to fly to St Lucia for their wedding, but as they had bought only flights with XL, and had paid for them by debit card, they are not due any refunds.

Mr Hopkin, who worked for an XL company called Travel City Direct in Swansea, may also have lost his job in the collapse.

“It is just terrible,” said Clare. “I broke down in floods of tears.”

‘Weaker players’

There is now widespread speculation that other airlines may be about to follow in XL’s wake and go bust.

“I think there will be more failures, sadly, in the months to come,” said aviation expert John Strickland of JLS Consulting.

“We have a number of weaker players in a highly competitive market.”

There are fears that more airlines could go bust
And bookmaker Paddy Power is offering odds on the next airline to go down.

It has emerged that the Irish betting organisation had to close its book on the collapse of XL 12 hours before the company folded.

Paddy Power took the action after a high volume of bets came flooding in on Thursday, but despite its actions the bookie still had to pay out about £15,000.

Simon Calder, travel editor of the Independent newspaper told the BBC website that struggling Italian carrier Alitalia, which he said was making heavy losses every day, could be the next airline to go under.

“It has been making a loss for decades, and is always bailed out by the Italian government, ” he said.

“If the unions fail to sign up to a rescue deal with the government then the airline will disappear, but only momentarily.

“It will then re-appear as something like Alitalia Lite with billions of debt.”

News reported by The BBC

You’ll never see an entrepreneur wearing a sandwich board and predicting that the end is nigh.

Those who have set up their own businesses tend to be among the worst at foreseeing their collapse, experts say.

Perhaps it is the emotions involved, maybe selective blindness of the facts, or above all it could be the fear of failure.

But with the economic downturn continuing, it could soon be time for many to face those demons and accept their business is in trouble.

Facing collapse

One of the key barometers of the economic climate is the number of businesses going into administration.

“I am pretty sure that during the next 12 months we’ll be in some fairly choppy waters” Alan Bloom Ernst and Young

This is the point at which outside experts – the administrators – come in and take on the role of the directors.

Any action from creditors is frozen as the administrators to try to save the business, sell it or close it.

The latest figures for England and Wales revealed that the number going into administration in the three months to the end of June rose by 9.2% on the previous quarter, from 859 to 938.

After a revision of the numbers, the Insolvency Service says that the latest figure is 60% higher than the same period of 2007.

But, if analysts prove to be correct, a big rise is still to come.

“I am pretty sure that during the next 12 months we’ll be in some fairly choppy waters,” says Alan Bloom, global head of restructuring at Ernst and Young.

The first date to look for 29 September.

This is the next “quarter day” when retailers have to pay the next three months rent to their landlord, and which can prove the final financial straw for some.

There has been lobbying from some retailers to pay monthly, rather than quarterly, rent to ease the hit.

After this date retailers will also be entering the critical pre-Christmas quarter which Mr Bloom expects to be the toughest for many years.

Spending

But it is not just retailers which will be affected by the tough months.

Wrapit collapsed leaving hundreds in fear of losing their wedding presents

With household finances being squeezed by food and fuel, consumers’ discretionary spending is likely to be drawn in.

A number of furniture companies have felt the pinch with some going into administration as people spend less on improving their homes.

Mid-range travel companies, the motor retail and leisure sectors will also face tough times, according to Geoff Carton-Kelly, partner at administrators Baker Tilly.

This, alongside the downturn in the property market and advertising spending, has led to his prediction that the number of businesses going into administration will rise by 50% by halfway through 2009.

During the high-profile collapse of wedding list company Wrapit, the business’s bank and main creditor HSBC was accused of withholding credit and debit card income, with a Wrapit director saying this caused a cash crisis.

The bank said it had done everything it could in the preceding months to assist the directors.

And Mr Carton-Kelly says that the banks, despite their own lending coming under pressure owing to the credit crunch, “do not do rug-pulls anymore”.

“The banks have armies of people to support businesses with a decent recovery strategy,” he said.

“They are happy to work with a business’s advisers to find a way through.”

Early assistance

Both Mr Bloom and Mr Carton-Kelly have years of experience in dealing with businesses in administration.

Discretionary spending is likely to continue to go flat

Mr Carton-Kelly says he has dealt with businesses ranging from abattoirs to firms built on chemical waste dumps in his role as an administrator.

He has stood in front of hundreds of disgruntled staff and hired security to protect goods from unhappy customers.

Mr Bloom says that the complexity of business – owing to its increasingly global nature – makes it an art for them to survive in the current downturn.

“Lawyers and accountants should not run the world but I think a little bit of help from them at the moment will be a good thing,” he says.

A different form of management is required in times of economic downturn, he says.

The duo agree that the holy grail is for entrepreneurs to seek external help early, giving a rescue package more opportunity for success.

And here’s the good news.

Up to eight or nine out of ten businesses survive in one form or another, according to Mr Bloom.

A good chunk of these are the result of “pre-packs” – when a business secures a buyer when it knows it is heading into administration.

Aware of the growing numbers of companies facing collapse, investors are lining up funds to buy businesses for a bargain as they enter administration.

For those which are not bought as a going concern during administration – which typically lasts for six to eight weeks – the administrators oversee the sale of assets.

Staff are among the hardest hit when a business folds, sometimes only having a few weeks or days notice before losing their jobs.

“The problem is that this often happens with enormous speed; the good bosses will help cushion the blow,” says Sarah Veale, head of equality and employment rights at the TUC.

Strict rules govern how administrators dish out any money that is left in a business.

Customers, suppliers and contractors – known as unsecured creditors – are towards the back of the list with the taxman. At the front is the bank, with staff just behind.

These can be difficult negotiations to deal with for the administrator – but a job that is predicted to become a lot busier.

News reported by The BBC

The All Business Class airline Silverjet went into administration this week after it faced major financial problems that forced the company to suspend all its flights. Passengers already booked on flights were left stranded and left just under 10,000 customers needing to make alternative plans at rather short notice!!!

One of the major contributors to Silverjet troubles stems from the soaring cost of fuel – and only this week we have also seen the lorry drivers protest to the Government over rising prices at the pumps. I wouldn’t be too surprised to see a number of haulage firms going bust too if oil prices and consequently pump prices continuing to rise, as they have done over the last 12-24 months!

Also, in the airline industry two of Silverjets competitors Maxjet and Eos have both gone out of business too and there are many other carriers struggling and even British Airways put up its fuel surcharge today!

“For sale Silverjet said it was “with deep regret” that it has appointed administrators.” The company have been unable to secure the necessary funding to continue its operations so had to call in the administrator Begbies Traynor. There were interested parties in the potential sale of Silverjet and the administrators seem confident of a sale. Shares in the carrier were suspended earlier this month when it failed to obtain a critical $5m (£2.5m) loan.

The business operated with three Boeing 767 aircraft and flew out of London Luton Airport to New York and Dubai – the average cost of a return fare was around £1,000 and Silverjet started its service in January of 2007.