18/12/2012

New Gordons figures points to continuing struggles of Yorkshire’s Social Clubs

Yorkshire law firm Gordons has revealed it has worked on 10 per cent more social club liquidations in 2012 than in the preceding year.

The finding means the practice, which has particular expertise in assisting institutions such as working men’s clubs, has now advised and assisted forty such organisations in the last three years.

Wayne Parker, head of business recovery and restructuring at Gordons, said the firm had helped in recent weeks on the liquidations of three further Bradford based clubs and a Conservative club in Barnet. It had also just been appointed to undertake similar work in relation to a further Bradford social club, among other cases.

He said data from assurance, tax and advisory services provider PwC revealed 332 companies in the hospitality and leisure sector nationally became insolvent during the second quarter of this year. As this category included social clubs, the problems in the wider industry appeared to be continuing nationally too.

Mr Parker said: “Their current difficulties mean Yorkshire’s social clubs won’t be joining in the current chorus of approval to mark the tenth anniversary of the Enterprise Act. This has succeeded in its aim of reducing corporate casualties and protecting jobs in other sectors, but social clubs are, unfortunately, outside its protection and so have to consider other, more complicated and expensive alternatives.

“This exclusion has exacerbated the huge challenges the clubs have faced in recent years, including the smoking ban, alcohol being available at bargain prices in supermarkets, and the general economic climate causing people’s leisure spending to be restrained. This is a situation likely to continue for at least another 12 months.”

Mr Parker said many social clubs were liquidating in the face of these pressures, having been formed in the 1950s and 1960s, with the founders now often dying off and their children being uninterested in continuing the unequal battle for survival.

He added, however: “The legal structure of social clubs often makes the process of liquidating them complex, meaning the people involved often need specialist advice. Complications can include committee members being personally liable for club debts and the organisations, despite struggling in trading terms, having valuable real estate to sell.

“Other issues can arise from factors such as the legal structure of these bodies often being antiquated and them not having being set-up with restructuring or liquidation in mind. Tracking down the members and/or their personal representatives, so they can receive their rightful share of the proceeds, many years later, can also often be taxing, not least as many of these people may have already died intestate.”

Mr Parker explained the Enterprise Act had fundamentally altered the UK’s insolvency regime, through measures such as introducing a streamlined administration procedure. The new process removed the need for a detailed report to be presented at the Companies Court before an administrator could be appointed, thus reducing procedural costs, for instance. He said the act had undoubtedly made a positive difference in other sectors, as indicated by business insolvencies overall during 2009 numbering 8,000 fewer than in 1992.

One of the UK’s most successful law firms with offices in Leeds and Bradford. Gordons has been established for over 168 years, currently employs 280 people and has a turnover of over £25m.  Gordons’ excellence has been recognised in a number of award schemes this year:

  • Business of the Year in the £10m to £50m category in the Yorkshire Post Excellence in Business Awards
  • Private Client Team of the Year and Managing Partner of the Year in the Yorkshire Lawyer Awards
  • UK and Ireland Regional Team of the Year in the Society of Trust and Estate Practitioners Private Client Awards
  • Property Law Firm of the Year in the Yorkshire Property Industry Awards
  • Runner-up in the Regional Law Firm of the Year category of the Lawyer Awards
  • Highly Commended in the Excellence in Community Investment category of the Law Society Excellence Awards.

Clients include Wm Morrison Supermarkets plc, construction and high performance materials manufacturer Saint Gobain, international brewers Molson Coors, greetings card retailer Card Factory and the world’s largest electrical heating business Glen Dimplex. For more information visit www.gordonsllp.com