Vinance directors – Earl, Ford and Wallen – now disqualified

Vinance plc: Fine Wine Portfolio Managers!

Message from Chris Herron of Herron Fisher Insolvency and Business Recovery

'All four directors of Vinance PLC have been the subject of disqualification proceedings taken by the Insolvency Service. Each director has now given a legally binding undertaking not to act as a director of any limited company for a long period of time.

Simon Earl – 10 years

Simon Ford, Paul Ford, Mike Wallen – 9 years each

 

If they breach their undertakings, they can be prosecuted. Simon Ford has resigned as a director of Electus Wines Ltd.' See previous investdrinks post here.

This ban means that Simon Earl, Simon Ford, Paul Ford and Mike Wallen cannot act as shadow directors surreptitiously running a company. 

Following Simon Ford's resignation (13.1.2015) as a director of Electus Wines Ltd, the company's future may well be uncertain. The sole director is Timothy Graham Ford, Simon's father who celebrates his 70th birthday today. Will he want to continue the business, which Simon Ford told me he would be running from Ottawa? The company is now registered at a private address in Blackheath.  

In February 2013 Simon Earl and Mike Wallen were jailed for their part in running a brothel and prostitution ring. Details here.  

My thanks to Chris Herron for keeping me informed. It would be good if all insolvency practitioners were this helpful!

Vinance plc: details of directors' conduct wanted

Herron Fisher, the administrators of collapsed wine investment company Vinance are asking creditors for information about the directors' conduct:

'Directors' conduct

There are several matters which we are investigating in relation to the directors' alleged conduct and if you are aware of any matters which would assist us in this then I should be grateful if you would advise us as soon as possible.'

Herron Fisher can be contacted on 020-8688 2100/ 01323-723643 or info@herronfisher.co.uk

Vinance plc: 'criminal disregard' for investors' money

Château Léoville-Barton 

The four directors – Paul Timothy Hayward Ford, Simon John Ford, Michael Alexander Wallen and Simon Antony Earl – of failed wine investment company, Vinance plc, ought to be acutely uncomfortable reading the administrators’ report released by Herron Fisher on 17th  December 2012. It is clear from the report that the company records were both ‘inadequate’ and ‘incomplete’.  So poor were records that it has not yet been possible to establish exactly how much is owed to investors. 
 

Herron Fisher estimates that some £5 million worth of wine is owed to Vinance’s clients, which totaled some 1300.  It is still not known how many of these are creditors. The company did buy wine, quite often from its clients. ‘Often, the company would itself buy wine from clients with a view to selling it to other clients. In this way, it accumulated a large quantity of stock which belonged to the company itself.’ This stock is estimated to be worth around £3 million. Herron Fisher is reluctant to sell this wine until the true position vis à vis the investors and their wine is known.

The report indicates that the directors were criminally negligent with their client’s investments, especially as it is highly likely that clients sold other investments/savings in order to buy wines that they were not allocated or in some cases not immediately bought. I use ‘criminally negligent’ is a broad not legal sense here. The directors promoted Vinance plc as an investment company able to offer its clients’ good returns on their wine purchased from them. Yet they cared so little about their investors’ financial health that they failed to put in place proper records. 

The investors were treated with scandalous disregard: it is high likely that although creditors will get some money back from the substantial stock of wine held by Vinance their retirement will be less comfortable than they hoped. 

From the report: ‘We have asked the directors to prepare a summary of the company's estimated financial position as at 16 November 2012, which is known as a statement of affairs, but they have not yet prepared it.   We understand that the reason for the delay is that there is too much uncertainty about the company's financial position and in particular the wine for which clients have paid.’

‘It was apparent that the company's records were inadequate and that the position of each individual client was not recorded properly.  The directors could not easily work out which clients were short of wine they had ordered and paid for or what the extent of the shortfall was.  The clients themselves were unaware that there was any problem, although many of them thought (and stated) that the company's systems left something to be desired.’

Furthermore the directors of Vinance sometimes used its investors’ funds to cover running expenses rather than purchasing wine. ‘It transpires that sometimes the company took money from clients but did not buy the wine immediately and the money was used for general overheads.  In a rising market the company had enough liquidity to repay clients if necessary, or to buy wine for them at short notice, and so customers did not suffer.  However, as the wine market began to fall the company ran out of cash and clients suffered a deterioration in service.’

‘The situation became very serious and the directors lent money to the company to keep it afloat as they believed in its viability going forward.  Ultimately, pressure from clients and HM Revenue & Customs forced the company to a crisis.'

The only audited accounts (to June 2010) for Vinance plc showed that the company managed to make a loss of £3.43 million on a turnover of £4.77 million. Given that the directors did not know the true financial position of the company, one has to wonder whether Vinance plc traded as insolvent for some time before it went into administration on 16th November 2012. 

In late November Herron Fisher sold Vinance’s customer list sold for £30,000 + Vat to Albany Vintners Ltd/Arc Reserves Ltd. Herron Fisher were contacted by 24 interested parties and received four bids. See post here.

It won’t be known what dividend will be payable to creditors until Herron Fisher have managed to sort out the mess and have then been able to sell Vinance’s wine stock.  

It is unclear whether Morgan Aston Ford Ltd, the previous incarnation of Vinance plc, kept adequate records. As Vinance plc would have inherited MAF’s records it would seem reasonable to think that they may well also have been inadequate and incomplete.

Unfortunately the failure by ‘wine investment companies’ to keep proper records is not restricted to Vinance. For example this was the same for Bordeaux UK, which went bust in November 2011.  

Albany Vintners buys Vinance data base and takes over management of clients' stock

Locke King Vaults – cases stored in one of the tunnels 

The client database of Vinance plc, which went into administration on 16th November 2012, has been bought by Albany Vintners Ltd. Set up in 2003 by Marcus Edwards, who had worked for leading fine wine merchant Farr Vintners for 10 years – last four as their accountant, Albany Vintners is based in Cambridge. It offers its own in bond storage facilities through Arc Reserves using dedicated storage at Locke King Vaults, the fine wine storage section of EHD Bond.

Albany/Arc will take over the management of client accounts.

I understand that there were eight other bidders.

It is still down to the administrators, Herron Fisher, to discover what Vinance plc's deficit is and to ascertain what the position is in regard to any en primeur wines ordered by its customers. Whatever the level of Vinance's debt is, this is separate from the deal with Albany Vintners Ltd.

Marcus Edwards comments: “Already we have had customers of Vinance contacting us to sell their wine. We expect to be able to help as we have a wider distribution network than Vinance – we sell to the trade, to private clients and also to export markets. We have still to sort out commission rates for these clients.

Vinance plc charged a 25% upfront commission on purchase but 0% on selling.

investdrinks asked Edwards whether the client database would be passed onto Albany Portfolio Management Ltd, an associated company offering wine investments and a founder member of the Wine Investment Association.

"These are two separate businesses. Our main priority is looking after the stock.  Passing on the database to Albany Portfolio Management is not a priority, we haven't considered this as a possibility. It is something we are unlikely to do."

As listeners to Saturday's BBC Radio 4's Moneybox would have heard the directors of Vinance plc were more concerned to score points rather than express regret for the collapse.

It is encouraging to see that the database has been bought by a company with a good reputation and not by a white knight operation set up to mislead investors caught up in the collapse of Vinance plc. Unfortunately this was not the case when Bordeaux UK Ltd went down in November 2011, when Vin Bordelais emerged using the same website and the same phone number as Bordeaux UK Ltd. See here.  

Entrance to the Locke King Vaults (above and below)

The Locke King Vaults are on the edge of the old Brooklands motor racing circuit. It was originally an extensive air raid shelter, which has now been converted to fine wine storage.  

Inside the vaults: side tunnels run off this corridor

An old air raid notice

James Temple: i/c wine storage at the vaults 

Statement by Herron Fisher, administrators:

'ADMINISTRATORS OF VINANCE PLC FIND A BUYER
Christopher Herron and Nicola Jayne Fisher, insolvency practitioners and administrators of Vinance Plc , have reached agreement with Albany Vintners Ltd/Arc Reserves Ltd (Arc) an experienced fine wine specialist, to take over the management of Vinance client accounts.

Nicky Fisher of Herron Fisher said, “We have made this arrangement in order to make life easier for the clients going forward, but of course it is subject to each individual client’s consent.”

All investors have been sent a letter from Arc Reserves with further information.

Arc Reserves said in its letter to creditors that it has reached agreement to take over the management of client accounts.  Going forward Herron Fisher, the administrators, are still working to confirm allocated wines and once this is completed they will liaise with Arc Reserves and investors to facilitate the transfer of cases subject to clients’ consent.

Albany Vintners Ltd is a wholesale fine wine company specialising in buying from Bordeaux and selling direct to private collectors and merchants in the UK, Europe and Asia. It has a dedicated logistics arm, Arc Reserves Limited, to provide a specialist storage and portfolio management solution for private clients.

Herron Fisher, led by Chris Herron and Nicky Fisher, is an expert corporate recovery and insolvency firm. For more information visit: www.herronfisher.co.uk   or e-mail vinance@herronfisher.co.uk. To contact Arc Reserves, email: enquiries@arcreserves.com or visit: www.arcreserves.com'  

Vinance plc: some information from the administrators

Here are answers to some initial questions I put to Herron Fisher, the administrators:

a) What has caused Vinance plc to go into administration?

It appears that part of the cause for going into administration was poor management of the business, however as the situation has just been handed over to Herron Fisher the full details of the issue have yet to be firmly established.
 b) Are some of the wines outstanding Bordeaux en primeur orders. If so from what vintages and how much money is involved? Are Vinance plc up to date on payment for these en primeur wines?
The exact details on the wine stock or the details of all investments, en primeur or otherwise, is just being established. However the majority of creditors are  wine investors rather than suppliers.

c) When do you expect to have a first estimate of what the total deficiency is? 

6 weeks

NOTES:
• Vinance Plc had a turnover of approximately GBP £1million. This is commissions, not the amount of wine sold on behalf of third parties.
• The court order to put the business into administration was sought by the directors
• Vinance plc has four directors; (3 are based in the UK and one is overseas) and six shareholders.
• It has approximately 1,000 UK creditors; the vast majority of these being wine investors (rather than suppliers)
• The value of wine assets has not yet been fully determined but it is estimated at a few million pounds
• Vinance plc has 10 employees

•••

23.11.12 

From comments received by investdrinks there would appear to be some clients who bought wine from Vinance plc some years ago who have yet to be allocated their wine. Hopefully they will find that their wines have been allocated to them. If not then it may be that Vinance plc/Morgan Aston Ford took money from clients for wine that they failed to supply.

There are also some clients who asked Vinance plc to sell their wines and either it took a long time or no sale was negociated. A practical example of one of the disadvantages of paying an upfront commission with no commission when you come to sell. The wine merchant has no incentive to sell your wine.  

29.11.2012
I understand that the administrators have found a buyer for Vinance plc and are writing to all Vinance customers to inform them and give details of the purchaser. The name of the company willing to buy Vinance plc will be released tomorrow. I trust that this company is reputable and is acting in the interests of the investors and is not a white-knight operation that has unfortunately happened in the past.     

Vinance plc in administration

Vinance PLC, which started life as Morgan Aston Ford, was put into administration on Friday 16th November. It is not known what the deficiency is at the moment. Insolvency practioners, Herron Fisher, have been appointed as administrators. 

Those investors who have their wine is their own private accounts should not be affected. However, those who are waiting to have their wine allocated, purchased or are awaiting en primeur wines will not be so lucky. They will be unsecured creditors.  

In echoes of Bordeaux UK's collapse last year Herron Fisher note that: 'Unfortunately the company records are not perfect and it will take some time for us to establish the exact position.'  

Morgan Aston Ford was set up on 7th January 2002 and was dissolved on 15th June 2010. Vinance plc was founded on 11th August 2008 and took over from Morgan Aston Ford.  

  

Press release here:

'Herron Fisher, insolvency practitioners, have been appointed administrators of Vinance Plc a well-known wine portfolio manager / broker.

Based in Greenwich, London, Vinance Plc manages more than GBP £50 million worth of fine wine assets for thousands of investor clients in nine countries.

Herron Fisher have now taken over the day-to-day control and management of the company, which was put into administration in the High Court on Friday 16 November 2012.

Herron Fisher will aim to rescue the company as a going concern, or failing that achieve a better result for the company’s creditors as a whole than would be likely if the company was simply wound up (liquidated).

Nicky Fisher of Herron Fisher said, “We will perform our functions in the interest of the company’s creditors as a whole.  We understand that many clients will be unaffected as all of their wine has been allocated to them and is either held in bonded warehouses or they already have control of it themselves. There will unfortunately be some investors who have not been allocated all of their wines and there are no wines awaiting allocation, nor are we able to buy any more wine.  Unfortunately the company records are not perfect and it will take some time for us to establish the exact position.

“In the meantime, we will endeavour to find a buyer for the business.”

The administrators are hopeful that creditors will ultimately be repaid approximately 50% of their debt; however, this will take some time.

Herron Fisher, led by Chris Herron and Nicky Fisher, is an expert corporate recovery and insolvency firm. Between them they have managed the insolvencies of Meccano Toys Ltd and one of the largest illegal banks ever wound up by the Bank of England, as well as online gift retailers The Gift Registry Ltd and Wedding List Direct Ltd.

For more information visit: www.herronfisher.co.uk or e-mail
vinance@herronfisher.co.uk'