Rearing a phoenix....... part 1 – World of Wine Ltd from the ashes of En Primeur Ltd.

'In Greek mythology, a phoenix or phenix (Greek: φοῖνιξ phoinix; Latin: phoenix, phœnix, fenix) is a long-lived bird that is cyclically regenerated or reborn. Associated with the sun, a phoenix obtains new life by arising from the ashes of its predecessor. According to some sources, the phoenix dies in a show of flames and combustion, although there are other sources that claim that the legendary bird dies and simply decomposes before being born again.^[1]'

From Wikipedia

The Phoenix is a rather splendid bird – largely mythological but they can be reared successfully in the UK as this short series of posts may indicate.

To kick off here is a recent example from the UK wine trade where a company has died 'in a show of flames and combustion' but serendipitously its debts 'simply decompose' before a new one is born again.  

Goodbye – En Primeur Ltd! (05949641) ...... Hello – World of Wine Ltd! (09900486)
En Primeur Ltd was founded in September 2006 with Marco Paulo Correia (DOB: 29.9.1968) and Ana Sebastiao as the company secretary. En Primeur Ltd was based in Crawley with Ground Floor 1-7 Station Road Crawley West Sussex as its registered address and trading address: Suite 4, Kelvin House, Kelvin Way, Crawley RH10 9WE. As its company name implies, the sale of en primeur was a major focus. At the height of the demand for Bordeaux en primeur (2009/2010) Correia advertised his company's en primeur prices in January promising to hold them when the actual price posted by the châteaux several months later – surely a gamble fraught with difficulties.....

On 24th July 2014 En Primeur Ltd went into liquidation with debts that were originally estimated at 'low six figures' but which had climbed to unsecured claims of over £2.4 million by September 2015 when the liquidator, Nedim Aliyan of Abbott Fielding, filed his first annual report. News reports from July 2014 here and here.   

The last annual return filed in 2013 showed En Primeur Ltd had share capital of £100 – 85 shares held by Marco Correia and 15 by Roberto Correia. Full details of En Primeur Ltd and its filing can be found on Companies House Beta service.          
Hello – World of Wine Ltd! (09900486) 
The World of Wine Ltd was incorporated on 3rd December 2015. Ana Ligia Sebastiao (DOB– March 1973), who was company secretary of En Primeur Ltd, is the sole director and sole shareholder. The company has a nominal share capital of £100 – with £100 unpaid. Its registered office is Ground Floor, 1/7 Station Road, Crawley, West Sussex, United Kingdom, RH10 1HT and trading address: Suite 4, Kelvin House, Kelvin Way, Crawley RH10 9WE.   

Although Marco Correia is not an officer of The World of Wine he is the registrant of the company website – registered on 11th November 2015. Buying en primeur features prominently on the World of Wines Ltd's website. 

Compare and contrast:
Keen readers may notice a certain resemblance between these two explanations of buying en primeur...... 

 En Primeur Ltd: En primeur wines 

  World of Wine Ltd: What is En Primeur? 

Both explanations conclude with: 

'Buying en primeur allows you to make sure that special vintage you have your eye on doesn't get away.'

I'm not entirely sure that the many individuals listed as creditors of En Primeur Ltd would completely concur with the above ....  

 

From the terms and conditions of World of Wine Ltd:

  

En Primeur Sales 

In the unlikely event that we are unable to supply wines 

purchased on your behalf en primeur due to circumstances 

beyond our control, our liability will be 

limited to any money paid to us. 

It is not clear what happens if the reason why wines are not supplied are due to circumstances within the company's control eg failure to pay en primeur suppliers.... 

The terms and conditions for The World of Wine Ltd limit to right of return to three days from delivery. This is contrary to the 2013 Consumer Contracts legislation that gives 14 days. 

•• 

Doubtless business people should be given a second chance but equally potential clients have a right to know a company's background. I won't be buying from the World of Wine Ltd. 

En Primeur Ltd: 6 figure estimated deficit turns into £1.7 million!

Château Latour: one of several First Growths 

missing from a client's reserve account with En Primeur Ltd 

   

Unfortunately En Primeur Ltd’s financial situation is much worse than it was initially thought. Before he had had a chance to have a close look at the books Nedim Ailyan had estimated that the deficit would be in 6 figures and probably at the low end of this range. Instead the report presented at the creditors’ meeting on 16th July 2014 at the Marriott Hotel in Bexleyheath painted a very much blacker picture.

Bankrupt En Primeur Ltd has losses of £1.7 million far higher than initially thought. The full extent of the company’s financial problems became clear once the liquidator saw the company’s books.

Nedim Ailyan of Abbott Fielding (Sidcup) was appointed liquidator at the creditors’ meeting held on 16^th July 2014.

Creditors are owed over £1.8 million. Marco Correia, the company’s sole director and major shareholder, estimates En Primeur Ltd’s wine assets at £223,495. However, Edward Symmons, property and asset consultants appointed to realize their worth, value the stock at only £150,609.

Furthermore some of the company’s wine stocks are in France and will not be released until a £51,000 bill has been settled.

(Details: Stock held at London City Bond in En Primeur’s Trading Account cost £80,420. However, Edward Symmons, property and asset consultants appointed to realize their worth, value this stock at £48,500. A further 990 bottles, which were taken out of bond have a claimed retail value of approximately £45,109 – estimated are estimated by Symmons to have a value of around £11,000. Wines held in France: £97,975 but with a valuation of £57,000. The wines lying in France will only be released once outstanding monies of £51,000 have been paid. Thus the realizable net total for the company’s wine stocks appears to be £99,609.

According to Correia En Primeur Ltd’s problems started in 2011 when one of its suppliers was unable to deliver the 2008 en primeurs ordered. The company was forced to find replacements at the height of the Bordeaux boom. Cases that had been sold to customers for £1600 a case now cost up to £15,000.


Although it is true that prices of top Bordeaux as well as some of their associated wines such as Carruades de Lafite did rise sharply over this period only to fall back after 2011, I'm at loss to think of a wine that went from £1600 a case to £15,000 during this period unless it was sold far too cheaply in the first place. 
Losses mounted: between 30^th September 2012 and 16^th July 2014 En Primeur Ltd made a trading loss of £1.35 million.
  
The overall loss may continue to mount as investdrinks is aware that there are discrepancies between what customers thought should in their En Primeur Ltd reserve account at London City Bond and what is physically there now.

One customer has informed investdrinks that he now only has eight cases in his En Primeur Ltd reserve account instead of 20, which should have included some Bordeaux First Growths. At present it is not known what has happened to these wines.  Some of these missing wines had been purchased from other merchants and had been transferred from another bonded warehouse.
 
There are also some 2010 and 2011 en primeurs that have not been delivered. 

Postscript:
There is one clear lesson from this sorry tale. Store your valuable wine in your own account. Do not rely on putting it into a company's customer reserves as there is nothing to stop that company moving your wine without your knowledge.