It seems while I have been away that there has been some clarity injected into the situation at the collapsed Cain's Brewery. Or was it the brewery? No. It was the Beer Company - I think. The Southport Drinker mentions it in this article in which he says: "In a slippery switcheroo that can only happen in the world of business, there are rumours that the Dusanj brothers could emerge from the collapse of Cains with the brewery, the very profitable canning operation and 10 pubs."
It seems the brothers Dusanj had the foresight to put most of Cain's assets, including the brewery and the ten original Liverpool pubs, in a separate company which has not gone bust and indeed, may be owed money by the collapsed company, as they leased the brewery and some of the pubs separate to the Robert Cain Beer Company. The administrators need bids by tomorrow and it seems the Dusanj brothers are the favourites for the brewing and canning operation! I'd guess too that the brands must be owned by the brothers, making the liquidated Beer Company worth twice the sum of bugger all to anyone else. Well well.
Depending on your point of view this was sensible risk mitigation or the unacceptable face of capitalism. Maybe they have learned from their years in Scousley that you have to play it a bit clever sometimes! Either way, these two lads are smarter than you think and Cain's beers may well be around for a bit yet!
A bit clever? This sharp practice is nothing to applaud in my opinion, and to do so displays a degree of financial naivete. What we are about to witness is an example of "phoenixism" albeit with a twist in that some of the assets were put safely out of harm's way before the administration. The debts will be parked in the failed company and the Dusanj brothers will sail serenely on as before - leaving plenty of creditors empty handed. While Cains beers may well be around fot a bit after this, they will certainly leave a nasty taste in my mouth after this unsavoury episode.
ReplyDeleteAs I said there are two ways of looking at this. It might not be nice, but it is legal and is is clever in its own way. I assume it was done to mitigate the risk of the reverse takeover of Honeycombe.
ReplyDeleteIt seems to me that the biggest creditors were the Bank of Scotland who should have known what risk they were taking and what assets covered their loan and HMG, who allow this kind of financial contortionism. And there is assets. HMG will get their tax back and the BoS will get something back too.
Rather than "displaying a degree of financial naivete" it seems the brothers have been one ahead.
Maybe it is the unacceptable face of capitalism, but hey,against the current financial meltdown, it is small beer!
If you really believe that HMG will get their tax and BoS will get something too, then you clearly have little experience of this type of set up.
ReplyDeleteMost of the value is in the brewery and 10 of the freehold pubs and as we now know they are not part of the administration. If the brothers also own the brands, and like you I guess that they do, then where do you think all of this money is coming from? To be sure there were a small number of freehold pubs in the Honeycombe estate but most of them were on leases and are more or less worthless. No, I am afraid that this smacks more and more of sharp practice. Legal it may be, but that doesn't make it right.
I guess you know more about HMG's chances than I do! (-;
ReplyDeleteJohn, if you think BoS won't be able to extract value, I suspect it's you who doesn't know much about this kind of set-up. If they'd decided their security package was worthless, they wouldn't have called in the loan and would have agreed to a debt rescheduling.
ReplyDeleteNow Jeffrey, I jnow you wil have experince of this from the days when you had your snout in the trough as a corporate lawyer, but I have seen plenty of these cases too - my guess is that there will be little cash in the pot to pay the creditors, big or small.
ReplyDeleteMy point is that the BoS will (presumably) have first ranking security over valuable assets (the pubs that were acquired?) which they'll have enforced. So they won't be relying on what's in "the pot". Of course I don't know anything about the structure in question so I could be very wrong.
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