Friday, 6 June 2008

SSG files for bankruptcy

[Post updated Friday lunchtime]

SSG (St Stephen the Great), owners of the former SPCK chain of bookshops have filed for bankruptcy.

The following e-mail was sent to most if not all of the former SPCK shops by Mark Brewer:

SSG (St Stephen the Great - limited liability company) has been terminated as the trading company to operate the bookshops formerly known as SPCK Bookshops.

Additionally, SSG-LLC has been placed into reorganization in U.S. Bankruptcy Court.

SSG-LLC is not authorized to employ any person or incur any debt. With immediate effect, SSG-LLC payroll, redundancy and other such obligations will only be payable through the bankruptcy court. SSG-LLC employees of record as of 4 June 2008 will receive further notification directly from the bankruptcy court about how to submit a claim.

The bookshops will now be operated by ENC Management Company. Former employees of SSG-LLC are invited to apply for a position with ENC Management Company. If you wish to apply, please reply to this email so indicating.

The following message is being returned when e-mail is sent to the spckonline 'vendor accounts' address:

SSG (St Stephen the Great), the charitable trading company conducting business at the former SPCK Bookshops, has filed for protection from its creditors under Chapter 11 of the United States Bankruptcy Code in Houston, Texas.

The case number is 08-33689-H1 11.

This case is recorded in England and accordingly, all adverse actions and all actions in either the U.S. or the U.K. purporting to affect the property or rights or liabilities of SSG are prohibited in
accordance with the automatic stay provisions of the U.S. Bankruptcy Code. Similarly, efforts to collect an alleged debt from SSG are subject to the automatic stay provisions of the U.S. Bankruptcy Code.

Saint Stephen the Great LLC


I have been told that a number of suppliers are owed significant sums of money.

New companies have been set up to run the shops. The Durham Shop is now 'Durham Cathedral Shop Management Co', Chichester is 'Chichester Shop Management Co' (both can be found on the Companies House website). An e-mail from Phil Brewer to one of the shops said that the shops are now run by 'ENC management company'.

Phil Groom sent me this via the comments on my backup site (Thanks Phil):

Anne, one of my respondents, says:

Chapter 11 bankruptcy is often considered a "milder" form of bankruptcy than other filing methods that are available. It generally signals that a business wants protection from its creditors while re-organizing itself, working out payment methods, and so forth. It also often means that the people operating the business intend for it to continue to exist. More severe forms involve the shutting down of a business and the liquidation of its remaining assets to pay off creditors.'

(Thanks to Phelim for the tip about the 'vendor accounts' e-mail.)

2 comments:

Phil Groom said...

Anne, one of my respondents, says:

‘… Chapter 11 bankruptcy is often considered a “milder” form of bankruptcy than other filing methods that are available. It generally signals that a business wants protection from its creditors while re-organizing itself, working out payment methods, and so forth. It also often means that the people operating the business intend for it to continue to exist. More severe forms involve the shutting down of a business and the liquidation of its remaining assets to pay off creditors.’

So we watch and wait…

canon law said...

So the question I have is what’s the low down on ENC Managment - who and what are they?? as I can find no reference to them - and having read Chapter 11 info (http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter11.html#transfer) I couldn’t see where it stated or verified MR Brewers statements made to employees - in fact in point of reference it makes a lot of noise about Debtor In Possession and being able to continue running the business whilst the new plan is formulated and re-organisation occurs!
‘Upon filing a voluntary petition for relief under chapter 11 or, in an involuntary case, the entry of an order for relief, the debtor automatically assumes an additional identity as the “debtor in possession.” 11 U.S.C. § 1101. The term refers to a debtor that keeps possession and control of its assets while undergoing a reorganization under chapter 11, without the appointment of a case trustee. A debtor will remain a debtor in possession until the debtor’s plan of reorganization is confirmed, the debtor’s case is dismissed or converted to chapter 7, or a chapter 11 trustee is appointed. The appointment or election of a trustee occurs only in a small number of cases. Generally, the debtor, as “debtor in possession,” operates the business and performs many of the functions that a trustee performs in cases under other chapters’.
unless of course they have claimed chapter 11 and then immediately gone ahead and filed for liquidation, rather than the more normal chapter 7 route!
I am of course assuming that ENC Management - whomever they happen to be - are not the appointed trustee? but as I know and can find nothing about them I dont know this.

Also interesting is that the new Durham and Chichester trading co’s are registered with a country of origin as Australia! - by the way who are Lynn Yard and Bradley Smith??

This seems to me very interesting - given all that is going on and has gone on and with ENC showing up but no clearer details on the filing for chapter 11 and the two shops being outsourced prior to the bankruptcy filing I do hope that nothing could fit this definition:

“Bankruptcy Fraud

Bankruptcy, by definition, is when a debtor is declared - either by creditors or his own account - legally insolvent. His property is liquidated and divided among his creditors to pay his debts. But when a debtor falsely claims bankruptcy, attempts to conceal his assets, launches petition mills or files multiple claims, he is committing bankruptcy fraud - a federal offense.
Types of Bankruptcy Fraud

Concealment of assets, petition mills, and multiple filings are the most common types of bankruptcy fraud.
Concealment of Assets

Concealment of assets accounts for nearly 70 percent of all fraudulent bankruptcy cases filed by individuals. This type of fraud occurs when a person purposely fails to list every one of his assets on his bankruptcy claim, knowing that creditors cannot liquidate valuables of which they are not aware. Similarly, business owners frequently conceal assets when filing for bankruptcy - they transfer money or properties to their relatives’ or associates’ names so that the assets cannot be confiscated.”
http://www.lawyershop.com/news/practice-areas/criminal-law/white-collar-crimes/bankruptcy-fraud/

How sad this is - especially for all the staff & ex-staff who are the ones that yet again are made to suffer for the actions of the owners of the company.