17.08.2012

Leach Lewis process moves on

If half the claims surrounding the Leach Lewis Plant Ltd administration, currently in full stride in the UK, are true then the goings-on would provide enough material for a dramatic novel. The facts are almost certainly a lot less dramatic.

Claims range from Management Buy Out gazundering – reducing the value of an offer/bid at the last minute, to undermining an MBO bid from the inside to family skulduggery.

One thing that is now clear is that Leach Lewis Plant will not be sold as a complete going concern. The administrator has, we understand accepted an offer from three of the directors for the rubber track business and this will go into Leach Lewis Rubber Tracks Ltd - which was registered on August 2nd - three or four working days prior to the appointment of the administrator.

As we all know this is usually the tactic of those who intend to use the UK administration laws to shed unwanted liabilities, including debts to suppliers, while continuing with the existing business. While some may disagree, this is unlikely to have been the case here, it is way too close to the administration appointment date for that. The true 'Phoenix' specialists set such companies up around two to three months in advance.

In the meantime the company is continuing to trade under the control of the administrators who are looking to sell rest of the company or bits of it as a going concern.

Vertikal Comment

Whatever is going on, and let’s be honest no one can be completely sure in the face of claim and counterclaim, it is not doing what's left of the business or its employees any favours.

It looks as though there may have been issues well before the administration, and a distinct communication problem between owners and some members of the management team.

Unless a ‘white knight’ in the form of an outside buyer comes along soon it is unlikely that the rest of the business will survive intact.

It is always sad to see a strong brand go through such a process and the the UK bankruptcy laws are no help, they are a working tool for charletans, while screwing the straight. They are simply not fit for purpose and are a drag on the efficiency of the business sectors affected.