18.02.2005

Cox Plant sold to Managers

The assets of Cox Plant Hire Ltd have been sold to Cox Hire Centres Ltd, a company formed by the managers and owners of Cox Plant Ltd. The buy out has been led by two of the owner/ directors of Cox Hire Ltd Keith Price and David Symon.
Cox Hire is understood to have paid £490,000, with £300,000 for the business and a £190,000 contribution towards administration trading costs, plus taken on £5.4 million of novated debts.

Cox owed around £13 million, including £2.5 million to the Royal Bank of Scotland. None of the 40-plus unsecured creditors, ranging from manufacturers to the Inland Revenue, will receive any money.

The sale includes eight of the depots.(See Vertikal.Net February 8th) Cox call in administrators

Vertikal Comment

You might be forgiven for thinking that this sort of thing doesn’t happen any more, clearly it does! A management and owners place a company into administration and then hey presto a week or two later they are back up and running with a slightly modified name leaving the previous creditors and commitments behind them.

Of course there is always the other argument that continuity at least secures the jobs of the employees and the new company can take over the financed equipment and continue making the payments, and maybe, (although it happens as frequently as pigs learn to fly), the proceeds from the sale are sufficient to pay off all of the creditors.

In this case you can be fairly sure that there are more than a few people who will feel more than aggrieved. Surely there should be a change in the law that at least gives creditors some say in the proceedings?.

Under American chapter 11 administration creditors are presented with any potential sale or reorganisation before it is a “fait accompli” and have a chance to vote on whether they accept it or not.

The administrators in this case did not wish to comment on the matter and referred us to Keith Price who was unavailable for comment today. We will of course publish any input he provides at a later date.