"Saving your ass since 1999"
The Santa Claus Letters 8: Pre-pack the halls…
December 23, 2011Posted by on
Elves and Young LLP
Accountants – Insolvency Practitioners – Recovery Experts
TO ALL KNOWN CREDITORS
22nd December 2011
THE SANTA CLAUS GROUP – IN ADMINISTRATION
We give you notice, per paragraph 46 of Schedule B1 of the Insolvency Act 1986 that on 21st December 2011 Toby John Barr-Humbugg and James Alexander Funless, each of Elves and Young LLP, were appointed Administrators of the Santa Claus Group (“the Company”) in the North Pole District Registry. A notice of the Administrators’ appointment has been delivered to the Lapland Registrar of Companies.
In recent weeks the Company has been experiencing cash flow difficulties as a result of the need to purchase stock (in the form of presents to be delivered during the coming Christmas period) before payment (in the form of mince pies and sherry) is received.
The Company has also been become engaged in litigation to enforce its intellectual property rights, and has itself been the subject of several employment and breach of contract claims. This has resulted in a further depletion of cash resources.
We also understand that the Company has become subject to regulatory scrutiny following separate allegations that it has breached consumer protection legislation, invaded customers’ privacy, and failed to comply with immigration and child protection regulations in relation to its Elvish workforce. This has lead to further uncertainty about the Company’s ability to continue trading as a going concern.
You will appreciate that, as a result of the Administration, your account with the Company is frozen (literally as well as figuratively). You should provide a detailed account of the amount owing to you as at the date of Administration, together with details of any security that you may hold, for the attention of the Administrators at the address given at the foot of this letter.
We also note that, due to the somewhat disordered nature of the Company’s record keeping (which we understand was based on “elf magic”), we have been unable to identify the intended recipients for the presents currently stored at the Company’s warehouses. This, together with the lack of operating capital, means that the Company will not be able to effect any deliveries during the coming Christmas period.
If you are one of those recipients, therefore, you should submit an account of the value of presents ordered in the manner indicated above. A proof of claim form is attached for that purpose.
Prior to our appointment, we instructed Grinches as agents to conduct a valuation of the Company’s assets. Grinches valued the Company’s stock and plant at £952,362 at present market value, as against liabilities of £1,360,251,115.
However, we are able to confirm that, immediately following our appointment on 21st December, we completed a sale of the Company’s business and assets to Kris Kringle Limited (“the Purchaser”). The sale consideration was £1,632,0120.32, which is considerably in excess of the break up valuation.
Please note that as part of this sale the Purchaser acquired the Company’s customer list. Our understanding is that they intend to contact over the next 48 hours all those who had arranged delivery of presents for the coming Christmas period, to advise them regarding alternative purchase and delivery options. Please note, however, that any claim you have against the Company may not be set off against such purchases.
In the meantime, the Administrators will prepare proposals for a distribution of funds, which will be submitted to the Company’s creditors within 8 weeks of the commencement of the Administration. A meeting of creditors will be convened thereafter to consider those proposals.
Please note that the Administrators are agents of the Company and act without personal liability.
Yours faithfullyFor and on behalf of The Santa Claus Group
TJ Barr-Humbugg Joint Administrator