A Tangled Web for Creditors as Durham Cathedral announces plans to Re-Open Shop under its own Management

Phil Groom writes:

Update, Feb 17, 2010

The original news item this report relates to has vanished from the Cathedral website. Now copied into a comment below for reference.

Following last week’s announcement that the Brewer brothers had pulled out of Durham Cathedral ahead of schedule, the Cathedral have now announced a date, 1st March 2010, for the shop to re-open under its own management: The Cathedral Shop – A New Beginning

Due to problems with the roof of the Great Kitchen, where the former SPCK bookshop was situated, the shop will initially open in the entrance area of the original shop with a “focus on the needs of visitors to the Cathedral”. Those who have raised concerns about the need for a good theological bookshop are offered some reassurance, however, as the announcement continues, “As soon as arrangements can be made, a larger shop will open with a wide range of theology books and church supplies.” The new shop is eventually expected to be located in the Undercroft, opposite the restaurant.

Parts of yesterday’s announcement, however, could almost have been written by Philip W Brewer himself and will no doubt leave creditors scratching their heads in bemusement:

From yesterday’s announcement:

The Cathedral cannot deal with any inquiries relating to the former shop which should be directed to St Stephen the Great Trust. …

Organisations will need to establish new accounts since this is a completely new business…

From Philip W Brewer’s instructions to staff when ‘Durham Cathedral Shop Management Company’ was established in March 2008:

Please work with your suppliers as a new entity. Ignore whatever was and whoever was in the past. We are now a new company, with no relationship to the old going forward. So, contact your suppliers, tell them the drill, that you are a new company and that you would like to begin trading. When and if asked about billing, tell them they should process that at vendor-accounts, as you are not aware of how they are paying old invoices, etc. they will need to chase Saint Stephen the Great Trust as they have been doing.

Last year I and several others contacted Peter Gotham, Interim Manager of the St Stephen the Great Trust, urging him to seize control of the Durham shop as he had with others. He responded by insisting that the Durham shop did not come under his remit and refused to take responsibility or comment further on the matter.

If not the Interim Manager, to whom should those with enquiries about the former shop address those enquiries? Perhaps the Cathedral Chapter, whom one hopes has a little more integrity than Philip W Brewer, will post contact details for the division of the St Stephen the Great Trust towards which they are directing enquirers?

SPCK/SSG Creditors have 2 weeks to Act (Updated)

Matt Wardman writes:

This advert appeared in this week’s Bookseller.

Note that you only have about a fortnight to write in.

ST STEPHEN THE GREAT CHARITABLE TRUST

This charity has been in the press over recent years as a result of concerns expressed over its operations. In April 2009 the Charity Commission appointed Peter Gotham of Begbies Traynor as Interim Manager to take over its running – other than with respect to its religious mission in the churches it controls. This objective was made more complicated by virtue of the fact that since July 2007 the shops previously operated by the charity were managed instead by other companies appointed by the Trustees. The Interim Manager has now completed his initial work, has retaken possession of most shops, and is moving towards meeting valid claims on the charity’s assets. In order to do this he has instructed agents to put various of the Trust’s properties on sale. He is now advertising for creditors’ claims incurred before 1 July 2007 in order to ensure that no valid claims go unmet. (Any claims incurred after 1 July 2007 will be the responsibility of the various companies engaged by the Trustees.)

Creditors who believe that they have a valid claim against the Trustees of St Stephen the Great Charitable Trust incurred before 1 July 2007, should write to the Interim Manager at Begbies Traynor (Central) LLP, 32 Cornhill, London EC3V 3BT under ref S8703 before the close of business on 16 December 2009.

Presented by: Begbies Traynor (Central) LLP

Presenter’s Reference: S8703/PJG/NGA/BRS

———————————————————————————-

Editorial Note: I am not at all convinced by the cut-off date, though, without seeing rock-solid evidence. For example, Mark Brewer was reported by the Bookseller as acting for SSG in November 2007 when the chain dropped the SPCK name.

And which external companies were responsible for running the shops after 1 July 2007? The company which seems to have been responsible for running most of them – ENC Shop Management Ltd – was not registered at Companies House until 11 March 2008

Groups such as the Church of England Pensions’ Board and various government agencies, and other creditors, need to take a close look at this.

And you only have 2 weeks to do so.

[Update: 27/9/1009.

We have been in touch with the interim Manager’s team during the afternoon.

The reason why responsibility is accepted for debts incurred before 1 July 2007 is that the Interim Manager was appointed to manage the “St Stephen the Great Trust” (no 1119839) charity, while a separate  charity – a Company Limited by Guarantee – had been created to manage the bookshops. The Interim Manager was not appointed to manage this Company Limited by Guarantee, and so they are not accepting reponsibility for debts incurred by this Company.

Editorial note: This is all horribly complicated, and we will try and submit a list of detailed questions to the Interim Manager and the Charity Commission over the weekend.  The Company Limited by Guarantee was merged with the parent charity (no 1119839) by direction of the Charity Commission on 27 July 2007 – see the “subsidiary charities” page on the link above, so it is not clear to us how the Interim Manager is entirely not responsible for actions of this charity.

In the meantime, there is an email address for the Interim Manager on the Charity Commission website, where you can send your precise queries.

My brain still hurts.]

The SPCK AGM, Unfinished Business and Unanswered Questions

David Keen writes

The SPCK Annual General Meeting is happening this Thursday – 1st October – and the annual report and accounts for 2008-9 are online. There is a passing reference to the former SPCK bookshops:

“SPCK continues to have a number of significant legal issues with Saint Stephen the Great Charitable Trust in regard to matters connected with the former SPCK Bookshops. The Charity Commission has appointed an Interim Manager for the Trust, and progress is being made.” (page 6)

Others have stronger views than I over how much responsibility SPCK should shoulder for handing over their bookshops (and staff, customers, and suppliers) to a family of charlatans, who have unfairly dismissed over 30 former staff, been censured in the US courts for a fraudulent bankrupcty claim, and finally been booted out by the Charity Commissioners. And that’s just the tip of the iceberg.

Some better news for former staff: the report reveals that their pension scheme, which is managed by the CofE pension folks (as far as I can tell), had a big shortfall as a result of the CofE revaluing its pensions (though it was struggling before this). SPCK has started making additional payments into the fund of £285,000 to top it up. This is going to be paid for the next 15 years, and the whole amount has been put on this years balance sheet – £3,832,000.

As I recall from comments on this blog, there is some question about whether the Brewers have kept up with pension payments to the staff they inherited from SPCK. Whose job is it to retrieve those: SPCK? Charity Commissioners? Church of England Pensions Board? What happens if they aren’t paid? Maybe this is a question which needs to be asked at the AGM.

Though the pension fund has imploded, SPCK are at least doing their bit to support former bookshop staff on this front. But we’re not out of the woods by any means.

Couple of other things:
– SPCK have nearly £300k in a restricted fund for Newcastle Bible House, which seems to be for the purpose of Christian retailing in Newcastle. This is listed in the accounts. What’s going to happen to this?

– Do the premises of former bookshops still belong to SPCK, or were they completely made over to the Brewers? The shops, as I understand, were given over with restrictive covenant, and at least one has been sold on by the Brewers for another use. I’m not sure what the legal situation is here, whether the shops revert to SPCK if the covenant has been transgressed.

There are other questions which need asking at the AGM, so if any readers of this blog are planning to be there, here is your mission, if you choose to accept it…..

Peek-a-Boo: Where are you? Playing Hide and Seek with the Charity Commission

Phil Groom writes:

As the Charity Commission say, it may simply be an oversight. J Mark and Philip W Brewer are not usually backward about coming forward. But in the meantime it seems that the Charity Commission investigation into SSG may have run into a wee problem:

Chester shop is also still using bags with the SPCK name and charity number on.

I have contacted the charity commission to complain about this and they told me that at present they have no contact address for Saint Stephen the Great as any letters are being returned to them as not known at the address.

When I said surely no charity can operate without a contact address they said it was probaly just an oversight that no one had thought to give them a new address.

— yorkshire pride, January 6, 2009, 8.01pm

The good news is that there are other options; as I said in response to yorkshire pride:

It should be possible to contact J Mark Brewer here:

Brewer & Pritchard PC: Contact. Assuming he’s still with the company, of course. But if not, as a wannabe US Congressman, his campaign address is also a matter of public record: Campaign Money: John Mark Brewer.

(Don’t get too excited about the outstanding debt of $559,846 from his 2000 campaign; it was self-loaned: “Brewer ranked fifth among U.S. House candidates for self-loans during the first half of the year” – Texas Weekly: ‘Tis the Season to Spend Money.)

Mark, old chap, if you or any of your colleagues should happen to be reading this, please do get in touch with the Charity Commission, there’s a good fellow. Thank you.

Ethics of Campaigning

There was a good discussion about whether it is appropriate to highlight real nitty-gritty detail after a question from Rev Ev about Phil’s highlighting of the continued use of the SPCK logo in one element of a window display on the Exeter shop:

Whereas I agree with much that is said on this site about the whole SPCK/SSG scam this is, in my opinion, nit picking.

All this shows is that some lackey has not actually considered what they are putting up in the window… probably some poor sod who doesn’t have a clue about what SPCK stands for, the Christian faith, or what they have got themselves in to.

Lets leave this before it starts to look vindictive.

We all agree that campaigning needs to be vigourous and fact based, without becoming vituperative – and it is useful to take stock from time to time. It is also the case that we have significantly hardened our tone (compared to say August) as we have found out more about all the things that have been happening around the mismanagement of the Saint Stephen the Great organisation.

My own view is that the SSG bookshop chain is such a mess with such extreme mismanagement that the sooner it closes down and is removed from the control of the current management the better, as then there is a greater chance of an equitable division of assets to the different groups (tax man, suppliers, staff etc.) under the framework of English Law before the whole lot are taken out of the backdoor in the dead of night. Then the working examples we have already of locally-supported, independent, well-run bookshops built on the ashes of some ex-SSG bookshops can have a chance to be copied in other places.

My comments are below, and I’d welcome further discussion.

My Reply to Rev Ev

(This is slightly edited)

RevEv

First of all we appreciate the comment; it is the negative feedback that pulls us back to the centre.

Normally we discuss what to report and how to report it offline, but you’ve asked a well-targeted question, and I’d like to offer the courtesy of a detailed and honest answer, and take the opportunity to explain why we really try to sweat the detail, and why it is important to record as much as we can in public.

(This is a long comment, which I’ll turn into an article tomorrow – so you make like to get a cup of tea!)

I agree with you that this is seemingly trivial.

Secondly I’d probably have written it slightly differently (I’m not saying it would be better – Phil and I have complementary styles). I’d probably have emphasised the history of the covenant breaking and mentioned the sign as a detail in passing. On different occasions, Phil has reminded me to tone down my style slightly for this niche compared to my usual political stamping ground.

I’m wondering if we should have a “Sweating the Detail” category or tag to point out this type of post. On my political blog I have a “knockabout” category I use to indicate “tongue in cheek” when I am having an over-the-top “go” at people, and it works well.

HOWEVER…

The whole approach of this campaign has been to “take what was hidden and shout it from the rooftops”, and that is the only approach – apart from formal legal action – that has delivered any results. Dave Walker did it for 18 months, and we are continuing the same basic approach now slightly more on the front-foot. We have repeatedly found that small details let us follow a piece of string which is attached to a piece of rope which has something significant on the end of it, and that the way to follow the trail has been to publish facts and let the network of getting on for 1000 people (e.g., 750 on Facebook) who are interested find relevant information and help build the jigsaw. So we publish lots of detail, even if it seems trivial. Perhaps 90% of the benefit has come from publishing material.

The general attitude of the Brewers to both English and US Law has been to treat compliance as optional, and relatively small details build up a rounded picture of that attitude. That may be needed later in investigations. This may be going to end up with serious legal action. I’ve stopped thinking about “vindictive” when it comes to documenting breaches; I just see that as collecting evidence that may be used in civil or criminal investigations later on. We try to make sure that everything is strong enough that it will be repeatable on oath when that becomes necessary. It may be the trivial detail that will be crucial: in this case concrete proof that the management have not ensured that a Trading Standards instruction is followed thoroughly.

We are also not just working nationally: we are trying to build consciousness in 25 centres so that when this is all over there will be the optimum opportunity to create independent bookshops maintaining the SPCK tradition of critical enqury and dialogue. Publishing small details about individual shops helps with that. It also helps with engaging the local media, who need emphatically local angles; local media are critical to raising local consciousness, and the new bookshops are going to need local communities of interest to support them. In the case of Exeter, a Charity Commission enquiry plus $700k taken out of the overall charity through the back door plus $1.5m of unpaid debts plus a fraudulent bankruptcy might not make the local paper. But those plus ignoring the covenant on an Exeter shop, plus 12 months of Trademark Violation, plus not fully obeying Trading Standards, plus ignoring the covenant on the shop, plus the staff all walking out together (I think), plus other stuff we haven’t published, could make a compelling story about the time the USDAW Tribunal goes to legal action.

Publishing embarrassing details also provides a certain amusement, morale boost and is a maintainer of interest to keep us all engaged on what will be a very long and tedious campaign; humans need it. That was one of the reasons we had such fun with Mark Brewer’s “deep belief in freedom of speech” when he was making threats to shut people up: we needed to create a sense of esprit de corps to build support and interest, and laughing at him helped people forget to be intimidated. The same goes for Phil Brewer’s aeroplane, although that also involves $1500 of misspent charity funds.

Scrutinising tiny detail lets the Brewers know just how closely they are being watched, which may help keep them on their toes and distracting them from nefarious activities or even more vigorous mismanagement/bullying/asset stripping than would have happened otherwise.

** Wrapping Up

I hope that helps explain the approach, even though we’ll both certainly admit we’ve got it a bit wrong at times.

Rgds

Matt

A Further Reply from Rev Ev

Rev Ev replied again:

Matt/Phil

Agreed that identifying small misdemeanours often leads to finding huge mistakes, but I just feel in this case that this is nit picking.

As a regular contributor to other sites watching the actions of particular retailers, I have found that such nitpicking leads to those being watched dismissing what is being said on the whole… saying that I would wholly expect the personages in this dispute to dismiss this, and similar sites, anyway.

Trust me, I do not in any way wish to defend the Brewers. I am more concerned that this dispute does not appear to become vindictive. There is more at stake here than the future, or not, of the former SPCK chain. This dispute could appear to be wholly unchristian if it appears at all to be vindictive and nitpicking, something certain elements of the press would latch on to with glee.

Further Thoughts

We regularly don’t publish material for different reasons, and on a couple of occasions we have pulled or softened articles.

I’d also take the Rev Ev’s point that a campaign around a Christian Bookshop Chain is very easy to attack with the “that’s not very Christian” canard.

Questions to think About

• Where should the lines be drawn on a flagship site such as this one ?
• What content mix should we use?
• Which material should we keep private?
• Should that be different on more satirical sites, such as ASingleblog or Dr Troll.

What do you think? Just to make it more interesting, I’d ask people to avoid “I agree” type comments without a more substantive point.

SPCK Staff: Tell the Church of England Pensions’ Board all the detail you have

Matt Wardman writes

I crashed into the former SPCK Bookshop story when it became a Free Expression issue back in July after watching with interest since the previous December, and since then I have become simply horrified at what has gone on and how staff, suppliers, the authorities and everyone have been treated with contempt by this pair of Shysters J Mark Brewer and Philip Brewer.

Below is an article from me attempting to help current and ex-staff members get in touch to give the Pensions’ Board the information needed. I am posting it here because the Wardman Wire has a prominence in search engines which is currently greater than the SPCK/SSG News and Information blog. It will be reproduced on the News blog on Monday.

The Brewers’ various corporate vehicles – of which the key one is the Society of St Stephen the Great Charitable Trust – have simply not been responding to requests to supply information about the status of staff pensions, which is itself an entirely contemptible and despicable course of action. Further, there are very real questions about whether the monies that were deducted from staff salaries as “pension contributions” were ever in fact even passed on to the Pensions’ Bodies.

SPCK Staff and ex-Staff Pensions

This is my interpretation, and not an official statement from any of the organisations involved. However, I am told that it highlights some current key issues accurately.

“I’m not claiming be an expert, but this is how I understand some of the issues around pensions. I am not a lawyer, but I hope these comments may help. Among the problems that the Church of England Pensions’ Board are likely to be facing are these:

Eligibility for the Church Workers’ Pension Fund

Eligibility for membership of the Church Workers’ Pension Fund (who manage the SPCK scheme) depends on the potential member being employed by a “Church of England Body”. The SPCK itself counts as such a body. The Society of St Stephen the Great Charitable Trust counted as such a body while the SPCK had the right to appoint a representative to the board of the body. Even after the Bishop of Gloucester and Simon Kingston resigned from the Board of Trustees due to conflicts of interest that “right” persisted.

When employees were transferred to other bodies/business entities (such as ENC Ltd and the companies running Durham and Chichester Shops), where SPCK did not have the right to be represented, therefore eligibility for membership of the Church Workers’ Pension Fund probably ceased at that point.

It is a further problem that it is in dispute when and whether such transfers happened, and what role was played by the St Stephen the Great Company Limited by Guarantee, whether any employees were transferred to THAT entity, when that was done, and whether employees of that entity would be eligible for Pension Fund Membership – bearing in mind that it was the *parent* charity, rather than the *daughter* charity, of the Saint Stephen the Great Charitable Trust.

Pension Contributions

In the attempt to make “St Stephen the Great LLC” bankrupt in the South Texas Bankruptcy Court, J Mark Brewer submitted documentation showing an unpaid debt to the Church of England Pensions’ Board for a sum of $13396.78. That may be money that employees think has gone to their pensions which has in fact gone to Brewer and Pritchard in “Legal Fees” or to the “Orthodox Church/Christian Mission Fund”, or elsewhere.

If those contributions have not reached the Church of England Pensions’ Board, then – unless they are told – they have no way of working out the relevant entitlement, or hypothetical entitlement (depending on whether the employee was working for an eligible organisation or not).

When they come to work it all out, they will have to make sensible assumptions given a very difficult set of circumstances and probably no one at all is going to be absolutely happy.

The Information needed by the Pensions’ Board

So they need as much information about each and every member of staff worked for SPCK or the other entities, when and what pension contributions have been made or are supposed to have been made.

That kind of information is things like – for example – the names of organisation paying payslips etc as well as deductions from salary.

Additional Voluntary Contributions

AVC’s (Additional Voluntary Contributions) are run by many pension schemes as a means whereby employees can boost their retirement income. The pension fund agrees to the payment and the amount (as there’s a government regulation on how much top up there can be) then the employer makes a deduction from payroll each month. This is shown as a separate deduction on the payslip and is sent to the Pension Provider as a separate payment.

Staff sending information to the Board should certainly advise of AVC payments because if these have not been passed on that really is theft as the money was taken each month from net pay.”

Wrapping Up

The Brewers’ offence is compounded bv the treatment of staff and the $1.5 million that has been admitted to have not been paid to creditors for goods supplied – while J Mark Brewer and Phil Brewer themselves extracted more than $750,000 from the same organisation at the same time – mean that this is not merely a game of leapfrog.

These admissions were made in the documents the attempted Bankruptcy Submission in Texas by J Mark Brewer, with the following statement (PDF, 1Mb) attached:

“I declare under penalty of perjury that I have read the answers contained in the foregoing statement of financial affairs and any attachments thereto and that they are true and correct to the best of my knowledge, information and belief”.

This submission itself was later admitted by J Mark Brewer to be in Bad Faith (PDF 150k):

after the Trustee in Bankruptcy (public official) had Accused J Mark Brewer of perpetrating a Fraud on the Court (PDF 700k).

We encourage everyone who has posted about the closing down of CartoonChurch’s reporting, or taken an interest in the SPCK story, to review developments and publish a suitable end of year post – linking back to the News and Information Blog.

Hard Questions for SPCK

So far we’ve been challenging Mr J Mark Brewer, but let’s not forget who handed the shops over to him in the first place: SPCK. Doug Chaplin has been raising questions over at MetaCatholic.

Discussing the situation in Worcester, where the shop is still trading under the SPCK name, he asks:

Behind everything, and rather overlooked, is the question whether the trustees of SPCK ever really did due diligence on the handing over of their chain to SSG in the first place. Were they so anxious about the way in which (like many independent bookshops) they were losing money in a not very friendly marketplace, that they simply took the first plausible solution that presented itself? Did they bother, in fact, to inspect the gift-horse’s mouth? They have been publicly very silent on this.

As the chain fell apart, so SPCK realised that the agreement was falling apart, and withdrew their trustees, and the licence to use the name SPCK. But how seriously have they policed the misuse of their trademark? What are they doing about such glaringly obvious breaches as that in this picture. Do they not mind that another “charity” is trading in their name?

Another part of the agreement, as I understand it (I’d be grateful for correction if I’m wrong) is that if the bookshop chain was viable after a number of years (seven?) was up, then the shop properties owned outright by SPCK would be transferred to the ownership of SSG. If (and I think the situation given UK law must be dubious) SSG has filed for bankruptcy what are SPCK doing to take back control of their property?

It might be that the SPCK trustees are acting behind the scenes. Or it might be that they have washed their hands of an embarrassing mess. But in the meantime bloggers like Dave Walker who have tried to keep this in the public eye, are effectively taking the brunt of SPCK’s failure.

I am not convinced that it is enough to say in their annual report: “There are a number of significant legal issues betwen SPCK and SSGGCT that have not been resolved at the year end.” (p7). Isn’t it time the Bishop of Gloucester as chair, and Simon Kingston as General Secretary, were a bit more overt and courageous in defending, literally, the honour of the SPCK name, standing up for all those employees they left stranded, and supporting those like Dave who have upheld their cause? I wonder if Bishop Michael Perham has been by Dave’s cartoon tent for a supportive word?

These are good questions, especially when set against the backcloth of this letter from the Revd Dr Julian Cummins (sadly now deceased), published in the Church Times back in December 2006:

Sir, — I resigned as a Governor of SPCK because I opposed the decision to transfer the 23 bookshops to the St Stephen Charitable Trust (SSG) (News, 1 December). I feared the worst, but felt that SPCK should be given the chance to prove me wrong.

[comments about SSG’s ban on selling the Qur’an]

SPCK has run bookshops across the world for well over 100 years. They have been open to theological and religious exploration. They have been a joy to visit. That is why I became a Governor of SPCK five years ago. Those principles have now been undermined at their fundamental roots.

I believe the transfer to SSG was a gross error. I opposed it as strongly as I could. The deed has now been done, and the next step must now be determined. It is time for the Bishop of Gloucester, the Rt Revd Michael Perham, Chairman of SPCK, to come up with a credible plan for the future, and to ensure a reversal of the SSG decision.

My thanks to Mark Bennet for bringing this letter to my attention.

SPCK: your silence almost speaks more loudly than words. 

• With objections expressed this strongly at the time, why did you still go ahead with the transfer?
• Why did you not put adequate safeguards in place for your staff?
• What are you doing to address the current situation?
• Why have you left it for people such as Dave Walker and myself to — as Doug puts it — take the brunt of your failure?
• What are you doing to support the staff you abandoned? 

It’s supposed to be books that get remaindered, not people!