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House of Fraser – The Real Damage from the Pre-Pack and to Mulberry

I have covered the abuse of pre-pack administrations and the case of House of Fraser in two previous blog articles. But now that the initial administrators report has been published the real damage is very clear. House of Fraser had total debts of £884 million of which trade suppliers were owed £484 million. The latter means goods supplied to the company, and sitting in the stores being sold to customers which will not be paid for by either the administrator or the ...

RIT Capital Partners, Foresight 4 VCT and Sepsis

RIT Capital Partners (RCP) is an investment trust that recently issued its interim report. As one of my longer standing holdings, first purchased in 2003 although I have reduced my holding of late, I read the report with interest. RCP has been a long-standing favourite of private investors having traditionally taken a somewhat defensive investment approach. But the portfolio is now most peculiar. It contains 8.8% of “quoted equities” but many of them are held as “swaps”, 27.7% in “long-only funds”, ...

Shareholder rights, letters to MPs and questions at AGMs – An Update

Over 20 members have to my knowledge written to their MPs (as we requested) and a number of members have asked questions at AGMs. We have certainly raised the issue. The Minister (or most likely his civil servants) have produced what looks like a standard response which is being sent to those MPs who contacted Greg Clarke MP, the Secretary of State. Their response argues that the UK does not have to follow the intent of the EU Shareholder Rights Directive and ...

House of Fraser Pre-Pack – Is It Such a Great Deal?

The acquisition of House of Fraser by Sports Direct is a typical “pre-pack” administration. In administration one minute, sold the next. The national media promptly welcomed it as the rescue of everyone’s favourite department store, the protection of 17,000 jobs and just what is needed to help save Britain’s High Streets. Mike Ashley of Sports Direct trumpeted this as a great deal. All the stores and stock were purchased for £90 million when gross assets were £946 million and the company made ...

Clarification re Stock Lending and platform pooled nominee accounts

Kevin Taylor, a ShareSoc member, has pointed out to me in relation to my article page 12 of ShareSoc’s August newsletter, that stock-lending simply does not (should not under FCA rules) take place from standard pooled nominee accounts, the likes of which most retail investors would use.  The FCA’s rules could not be more explicit in this area: “A firm must not undertake or otherwise engage in stock lending activity with or for a customer unless … the firm has obtained the consent ...