Gatecrasher still trading despite entering administration
The recent ‘pre-pack administration’ of the Birmingham-based nightclub Gatecrasher is a good example of how administrators work with companies in crisis to try and salvage something positive. Gatecrasher had amassed debts of more than £3.5 million, £0.5 million of which was owed to the HMRC that it couldn’t pay. Rather than pull the plug completely on Gatecrasher, a restructuring of the organisation has taken place which incorporates the forming of a new limited company, Gatecrasher (Birmingham) Ltd, corporate restructuring and refunding of the business.
This has put Gatecrasher back on a secure financial footing but not without some casualties. Gatecrasher had clubs in Nottingham, Sheffield, Watford, Leeds as well as Birmingham. All of them will continue to operate with the exception of Leeds which has closed its doors for good with the official line being that the venue “no longer matches with the current management team’s vision for clubbing”. The Leeds venue will no doubt go under sale shortly and will try and claw some revenue back for the creditors.
Birmingham Looses one of its Premium Nightclubs
Gatecrasher launched in Birmingham 5 years ago with lofty ambitions to be one of the best nightclubs in the world. The 2400 people capacity venue had £5 million invested in 2008 just before the recession really started to kick in and make an impact. The reason for the recent financial troubles at Gatecrasher has been put down to recessionary economic factors and competition in other parts of the city, which in turn put a great deal of pressure on bar prices and entrance fees. Attendance had been down and losses were incurred until it became inevitable that the administrators had to be called in.
The official definition of ‘pre-pack administration has defined by the Association of Business Recovery Professional is “an arrangement under which the sale of all or part of a company’s business or assets is negotiated with a purchaser prior to the appointment of an administrator, and the administrator effects the sale immediately on, or shortly after, his appointment”
This type of administration has meant that Gatecrasher has been able to stay open and jobs have been preserved, which is encouraging news for their employees. Business recovery is always at the forefront of the minds of administrators when a company hits hard times. The closing down of the business and the loss of all jobs is the very last resort so it’s good to see that Gatecrasher still has a future.
If you or anyone you know is in need of a pre pack administration in or around Birmingham please get in touch.
Categorised in: Administration News, Insolvency Reviews & Advice, Latest Insolvency News
