From The Bookseller online:
Brewer defends SSG liquidation
28.08.08 Graeme Neill
Mark Brewer, head of the Christian bookshop chain St Stephen the Great, has explained his decision to file for protection from creditors in the US. In email correspondence with The Bookseller, Brewer said that “abysmal” Christmas sales last year meant that “by late spring, the chain was plainly insolvent”. Brewer said that he did not have enough money to file for insolvency in the UK.
Brothers Mark and Phil Brewer, who run the chain, told suppliers in June that SSG had filed for protection from creditors under Chapter 11 of the US Bankruptcy Code. Houston Bankruptcy Court later converted this to Chapter 7, leaving the business in liquidation.
SSG was registered at Companies House in the UK, but Brewer said that the management of the company and its accounting support were based in Houston, Texas.
“This made bankruptcy in the US a viable alternative to a UK insolvency, and given the dollar-pound exchange rate, US bankruptcy was dramatically less expensive,” he said. “Candidly, the charity simply did not have the funds to institute an insolvency proceeding in England.”
In June, the trustee for the Chapter 7 liquidation, Randy W Williams filed a motion to dismiss the case. He said, “On its face, there is nothing to liquidate and nothing available to fund an investigation in the UK”. Brewer admitted that “due to the relatively small number of assets, the trustee did not feel that liquidation was worth his while”. The motion to dismiss is due to be ruled on in Houston today (Thursday, 28th August).
It is unclear what, if any, monies creditors will receive. Brewer declined to discuss what would happen to companies such as Marston or STL, which are owed money. He maintained that “this was a matter for the bankruptcy court”.
The Brewers took control of the former SPCK bookshops in October 2006, and closed at least six shops before the insolvency. Mark Brewer said that he “unintentionally” alienated staff with a new buying policy, which included a discontinuation of selling the Koran and an increase in the number of Orthodox materials sold. “[Staff] actively worked to prevent implementation of anything to do with change until the chain’s finances were too far gone for any change to have worked,” he said.
“I certainly share fault for this, mainly because I failed to muster the necessary support of the senior staff.”
Some of the chain is continuing to trade. The Brewers have registered the shops under a new trading company, ENC Shop Management, which is listed at Companies House.
(Reproduced here by permission)
Yet when the Carlisle shop closed Mark Brewer stated that all the shops were making a profit. Also notice that it is the staff’s fault for not obeying the demands from above. If people had just laid down and done what the Brewers wanted everything would be fine. But no mention is made of the unpaid bills to suppliers, unpaid rent or other financial mismanagement. I am too angry for words at the moment.
– Phelim McIntyre (Edited by Phil Groom)
SPCK/SSG: News, Notes & Info 