News Bulletin // February 08

Licensed Premisis Update Winding-up Resolutions Substantial Property Transactions Involving Directors

Licensed Premises Update

The licensed On-Trade is going through a testing time at the moment with the smoking ban beginning to bite, cheap proprietary brands in the supermarkets, the imminent effect of the rising cost of raw ingredients to the brewers, coupled with the general deterioration of the economy.

It has just been announced that on-trade beer volumes fell by mighty 9.7% in November and Christmas Figures are expected to as Bad if not worse. Ultimately this could result in many pubs going out of business.

LICENSED VICTUALLERS ASSOCIATION

Peter O'Hara and Simon Weir gave a presentation to the Licensed Victuallers Association at their Annual General Meeting, which was held on Wednesday 21 November 2007 at the St Nicholas Hotel in Scarborough. Peter O'Hara gave an overview of the Induvidual Voluntary Arrangement ("IVA") market and how it had evolved since its inception in 1986, and the current pitfalls that faced Debtors when proposing to enter into an IVA. Specific problems facing licensees were referred to and the fact that, in many cases, schemes were rather limited due to the dependency upon the brewery, who were often the largest creditor and, in the majority of cases, determine whether a scheme would be accepted or not. Simon Wier gave a case study involving an assignment OHara & Co dealt with involving a couple in the Midlands who ran two pubs and a nightclub. With our assistance, the couple were able to overcome their financial difficulties by entering into two interlocking Induvidual Voluntary Arrangements.

Winding up Resolutions

From 1 October 2007, the Companies Act 2006 made important changes to the rules relating to Company meetings and resolutions. With effect from that date, any winding-up resolution, whether or not the Company is insolvent, needs to be taken as a special resolution under Section 84(1)(b) and not by way of an extraordinary resolution. The period of notice required for a meeting of a private Company at which a special resolution is to be proposed, was reduced from 21 days to 14 days although the Company's articles of association may specify a longer period. Meetings of a private Company can now be called on shorter notice where a majority of the members which holds 90% of the voting rights agrees. For a public Company, a 95% majority is still required.

Substantial Property Transactions Involving Directors

Section 190-196 of the Companies Act 2006 deal with substantial property transactions involving Directors. They came into force on 1 October 2007. The new provisions, like the old ones, require that any arrangement under which a Director, or a person associated with a Director, aquires a substantial asset must have shareholder approval, failing which the transaction is voidable. However under the new provisions there is a broader exemption from transactions entered into by Companies which are subjec to a formal insolvency process. Section 193 provides that shareholder approval is not required where the company is in insolvent Liquidation or Administration. Previously, the exemption only applied in insolvent Liquidations.

FOR FURTHER DETAILS OR GENERAL INFORMATION CALL 01924 477499 OR VISIT www.ohara.co.uk

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