Relax Group/Synergi goes into Administration

[synstaff]

Hi, Thanks to all of you

[synstaff]

Hi Guys, last update for the Relax Group.

Synergi and Debtcare will continue to administer the current IVA,PTD and DMP workloads, Although this is for the next month or two, as Cleardebt have bought the books today for all existing clients of Relax.
Today the staff of both subsidiaries of the Relax group had to watch as friends and colleagues in HR, IT, Finance, Relax finance administrators and sales, as well as the directors were asked to leave without pay.

It is a bad period for the remaining staff as, although they are told they will be paid, after what happened today they are obviously dubious, although they will continue to provide the high level of customer service they have worked towards recently, please do bear the above in mind.

Obviously all existing clients of the relax group are in safe hands, and there financial plans will be handled professionally and with minimum diruption during the handover, and eventual closure of Relax group, and its companies.

[kallis3]

Not good for the staff Synstaff.

Any news of you getting another permanent job?

[synstaff]

Hi Kallis, not yet no, not a lot round here at present, may have to be temp till after xmas now

[Shining]

synstaff i am sorry to read this and sincerely wish you well in finding employment. Thank you for the updates.

[size5]

David Mond has just seen this post and has stated that all staff currently employed by Debtcare Limited, The Debt Counsellors Limited and Synergi Partners Limited will all continue to be employed and be paid their wages as normal.

I am going to slightly break forum rules here, but I feel that this is a very important issue so I hope Admin will forgive me, but any individual employee of those companies who wishes to discuss any matter can email David directly on david.mond@cleardebt.co.uk and I am sure he will be more than happy to answer any of their questions.

David does not think that this Forum is the appropriate medium to announce ClearDebt’s future plans, other than to assure the clients of the above mentioned companies that they will certainly be looked after with ClearDebt's present high standards of customer care, he is also very confident that the current employees of the former Relax Group will continue to operate to the same standard.

I hope this goes some way to clarifying things for everyone.

Regards.

[Adam Davies]

Hi
Happy to allow the email link direct to David for obvious reasons
Regards

[KitKat79]

That's great news.

[query09]

i would love to hear what actually happened to Relax group. It was very bizarre.
1) Feb 2009 - 79p - Went to their AGM and it couldn't have sounded more optimistic.. the chairman even bought 50,000 shares at 100p following the meeting.
2) March 09 - 66p - Changed their accounting ref date
3) May 09 - 80p - Change of advisor
4) June 09 - 80p - Final results, i quote "This period was once again extremely satisfying and rewarding for the Company.", and " Market conditions for the industry and trading levels for the Group are very encouraging. We look forward to the challenges over the next few years and are confident that the Group is well placed to take advantage of the prevailing circumstances, ensuring that we continue to maintain levels of growth and profitability, whilst also managing cash flow."
5) July 09 - 48.5p - CEO Paul Carter steps down
6) August 09 - 31p - CFO Trevor Moore leaves, "new team has been holding discussions with important business partners in the process of undertaking a strategic and financial review of the business"
7) August 09 - 22p - "results significantly lower, banking facilities monitored closely"
Sept 09 - 13p - "Historical results have been restated for a change in accounting policy in relation to intangible assets "
9) Oct 09 - 11p - Shares suspended
10) 23rd Nov 09- cleardebt buys outstanding debt
11) 24th Nov 09- cleardebt puts relax into administration
11) 3rd Dec 09- Cleardebt acquire IVA's etc from relax group

Firstly - how can the company go from doing very well, to collapsing without any change in the economic environment in six months. Surely this is simply false accounting by the board of directors? Is this being followed up by anyone?
Secondly - did the CFO manage to sell all this shares before he resigned? basically his resignation happened after shares had already fallen from 80p to 49p....!?
Thirdly - Did the administrators really get the best price, selling it to the company that owned all the debt and had just appointed them as the administrators?

Whole thing sounds very murky... ideas, thoughts appreciated!

[Adam Davies]

Hi
It's all a bit beyond me, hopefully Melanie can shed some light on the matter.
It does seem strange given that personal insolvencies are 20% ahead of last years figures
Regards

[MelanieGiles]

Melanie can shed her own opinions on this matter, but this probably is not the place! And I don't know the full inside story, so any comment would be pure speculation. However, I can add:-

1 It appears that various acquisitions were made over the last couple of years by this Group, which were expensive and perhaps in hindsight overpriced.

2 Cleardebt did not buy the bank debt - David Mond effected that personally as a private investor and then appointed the Administrators. There is no suggestion that the sale of the assets was not at market value - I understand that the assets of the company had been marketed for some time prior to the company's administration but with little interest shown.

3 A lot of IP firms who also offered sub-prime loans and mortgages are struggling. IP fees have been drastically cut over the last couple of years, and for most of us the blow has been minimal but in others this has had a massive impact, which may have led to trading difficulties.

[Adam Davies]

Hi
Sounds as if trading and acquisitions outside the insolvency core business have caused problems for the whole group.
Regards

[Adam Davies]

Hi
David has asked me to post the following on his behalf

"Some factual inaccuracies to correct:

(a) David Mond bought the debt from the Group’s bankers on Friday 20 November
(b) Relax Group/Synergi/Debtcare and Debt Councellors put into Administration on Sunday 22 November
(c) Adie put into Administration on 24 November
(d) Relax Finance/Relax Mortgages put into Administration on 8 December
(e) ClearDebt Group plc acquired the business and assets of Synergi/Debtcare/Adie/Debt Councellors on 2 December"

Quote "Firstly - how can the company go from doing very well, to collapsing without any change in the economic environment in six months. Surely this is simply false accounting by the board of directors? Is this being followed up by anyone?"

David Mond believes as part of the Administrators duties he will be examining such issues as alleged false accounting/alleged fraud/alleged misfeasance and alleged breach of fiduciary duties and any other matters that the Administrator finds out about or that which is brought to the Administrators attention

Quote "Secondly - did the CFO manage to sell all this shares before he resigned? basically his resignation happened after shares had already fallen from 80p to 49p....!?"

David Mond has no knowledge as to this – but anyone can examine the Register of Members of Relax Group plc and ascertain such information from the Companies Registrar.

Quote "Thirdly - Did the administrators really get the best price, selling it to the company that owned all the debt and had just appointed them as the administrators?"

David Mond understands that since July 2009 the whole situation was being monitored by the company’s bank who with Relax Group’s consent had appointed BDO to review all options. BDO circularised 17 Sales Memorandums to interested parties. David Mond believes all interested parties and some new parties were approached by the Administrator or approached the Administrator direct, to firm up all or any offer for the business/assets of the Group as did the incumbent management. This took place between the 23 November and 2 December

Quote "Whole thing sounds very murky... ideas, thoughts appreciated!"

Not sure why the poster thinks that this sounds very murky!

Regards
David Mond

[DoctorInternet]

Does anyone know if Relax Group are going to be liquidated, as I have some shares with them? There seems to be very little information coming from the group[xx(]

[MelanieGiles]

I am sure that liquidation will eventually prevail, as the assets of the company have been sold but the liabilities will be left behind - to the extent that the asset sale proceeds will not cover the debts.

The Administrator must call a meeting of creditors within 10 weeks of his appointment and by giving at least 14 days notice of that meeting. Given that the administration occured towards the end of November 2009, a creditors meeting should be announced shortly - to which shareholders of the company may also be invited.