Tag Archives: St Stephen the Great

Charity Commission releases report on the SPCK/SSG Bookshops

Saint Stephen the Great: Charity Commission inquiry

IT’S TAKEN A LONG, LONG TIME but today the Charity Commission has at last issued its assessment of the Brewer brothers’ gross mishandling of the former SPCK Bookshops.

The nine page report (available here) fails to identify the Brewers by name but nonetheless makes damning reading as it brings to light huge irregularities in a wide-ranging and complex inquiry that examined four specific areas:

  • Conflict of interest/loyalty, trustee benefit and self-dealing
  • Exposure to financial liability of the company and the trust
  • Bankruptcy proceedings in the United States of America
  • Potential damage to public trust and confidence

After a brief introduction to the Saint Stephen the Great Trust and Company, the report  identifies the issues under investigation, summarises the Commission’s findings, reviews the interim manager’s activities and findings, and draws the following conclusions:

The interim manager concluded that the trustees had mismanaged the trust. There were unmanaged conflicts of interest and loyalty related to directorships of associated companies and contracts entered into by some of the trustees.

The inquiry considered that some conflicts were so intrinsically linked to the trust’s administration that they could not be managed. The inquiry was concerned that the trustees’ lack of ability to manage conflicts of interest and loyalty arising from their involvement in connected organisations could lead them to consider it appropriate to use the trust’s funds to satisfy the liabilities of the other entities.

The inquiry highlighted poor governance, lack of due diligence and inadequate record keeping on the part of the trust trustees and the company directors. Trustees are under a duty to be prudent with the charity’s assets, the lack of prudence in this case and the lack of trustee awareness of their responsibilities has led to the demise of the trust and the company.

The interim manager concluded that it would be expensive and risky for the trust to restart managing the shops. There was no prospect of new trustees wishing to manage the trust and no evidence that beneficiaries or interested parties wished the trust to continue. It was in the trust’s best interest for it to be wound up with surplus assets transferred to charities with similar objectives.

The inquiry concluded that there had been serious mismanagement and misconduct of the trust and company by the trustees.

It then goes on to outline the extent, cost and impact of the Commission’s regulatory action, briefly noting the vast sums involved:

Trust assets of £3,226,100 were safeguarded by the appointment of the interim manager and claims of £4,171,710 were managed. £1,928,853 was disbursed in settlement of claims and £144,486 was disbursed to Orthodox communities.

Finally, the report considers issues for the wider sector, highlighting lessons to be learned from the failings noted and highlighting the duties and responsibilities of charity trustees, who must always:

  • act only in the best interests of the charity
  • actively manage actual or potential conflicts of interest
  • familiarise themselves with the appropriate legal requirements and take professional advice
  • keep proper accounting records and an adequate audit trail

Sadly, as well as failing to name those responsible for this Christian book trade disaster, the report also fails to consider the human cost for those caught up in it — the distress, hardship and misery caused to so many — noting only that “Thirty four of the shops’ ex-employees submitted redundancy claims” and that “Settlement of the redundancy claims from ex-shop employees was made and claims were paid in 2009 and 2010.”

Changing the Locks?

David Keen writes:

On the grapevine yesterday….

“I have just been told that this morning the locks on the door of Newcastle shop have been changed, and a notice has been placed on the door by the Interim Managers re the Charity Commission investigation.”

Can anyone else confirm this? Is there any news from the other shops?

It would make sense, with the Charity Commissioners taking control of St. Stephen the Great assets. If true, it may also show that, as far as the CC is concerned, the change of name last year to ENC Management was a smoke and mirrors exercise designed to get SSG out of its financial obligations.

There is possibly another SSG asset parked near Durham Cathedral, so if you see this go up for auction in the name of the Charity Commissioners, please give generously.

Meanwhile if you see anyone fiddling with the locks on a former SPCK shop, please ask what they’re doing. If they represent the Charity Commissioners, then bless them loudly. If they try to disguise a Texan accent and have a van with the engine running parked outside, then be suspicious.

Statement from the Charity Commission in Christian Marketplace

Phil Groom writes:

The July issue of Christian Marketplace is now available, with a report on the current situation on p.6, More closures at SSG bookshops. The report includes the following statement issued by the Charity Commission on 10th June:

Concerns were raised with the Charity Commission relating to governance and internal financial controls at St Stephen the Great Charitable Trust and St Stephen the Great (both registered under charity number 1119839). We contacted the trustees with regard to the issues raised with us. On the basis both of the initial concerns raised with the Commission and of the information provided by the charity in response, on 26 September 2008 we opened a statutory enquiry under section 8 of the Charities Act 1993

On 28 April 2009, as a temporary and protective measure, the Charity Commission appointed Peter Gotham of Begbies Traynor as Interim Manager of St Stephen the Great Charitable Trust. Because this inquiry remains open and ongoing we would not be in a position to go into further detail at this time, but we intend, as is normal procedure, to publish a statement of the results of the inquiry setting out our findings once the inquiry is completed.

Tribunals Postponed: Statement from USDAW

Phil Groom writes:

New post from Dave Walker on the Church Times blog yesterday with an official statement from Usdaw confirming Matt Wardman’s last update:

St. Stephen the Great tribunal update

Both parties agreed late on Friday to postpone today’s preliminary hearing on St. Stephen the Great, which had been scheduled to consider who the employer of the claimants was at the time they were dismissed.

The hearing is being postponed to allow time for members to consider a settlement offer. However, members have to agree unanimously to the offer for the case to be settled. Each claimant has been sent a letter outlining the settlement proposal and seeking instructions from them. They have been asked to respond as soon as possible, so that the union is able to negotiate terms of settlement or proceed with the hearing if no agreement can be reached.

11 May 2009

At present the only info about this case on Usdaw’s website appears to be the statement issued on 24 June 2008, Usdaw fights for mistreated bookshop workers.

As others have said, fantastic to see Dave posting on the story again.

Dave: I suspect I speak for many when I say I look forward to seeing you regain sufficient confidence to repost your missing material, complete with comments. Even if you don’t open it up for discussion, think of it as a public service: there’s sure to be information in those comments that the Charity Commission’s Interim Manager and solicitors would find very helpful…

Tribunals: Next Round Begins

Phil Groom writes:

Please spare a thought and/or pray for everyone involved in the next round of Employment Tribunals, which start today.

The Charity Commission’s appointment of an Interim Manager is good news on the one hand in that at last an outside agency is responding to the Brewers depredations of the former SPCK bookshops; but on the other hand, the solicitors appointed by the Interim Manager have specific responsibility “to preserve the assets of the charity and contest the legal claims of the Usdaw members.”

Let justice roll on like a river!

USDAW Statement as reported on the Church Times blog:

St. Stephen the Great tribunal

The long-awaited first stage of the St. Stephen the Great tribunal is due to take place next week in Bury St. Edmunds, commencing Monday 11 May, and is scheduled to run for three days. This is a preliminary hearing to consider who the employer of the claimants was at the time they were dismissed (the charitable trust, or one of the two limited companies).

Since the date was arranged, the Charity Commission has been conducting an investigation into how the charitable trust has been run and has now used its powers under the Charities Act to intervene and appoint an interim manager to manage the affairs of the charity (in place of the previous trustees, who were the American-based Mark Brewer and other members of his family). The interim manager has, in turn, appointed new solicitors to preserve the assets of the charity and contest the legal claims of the Usdaw members.

These new solicitors asked the tribunal to postpone the hearing in order to allow extra time for them to get up to speed with the cases. But Usdaw objected, as our members had been waiting so long for their cases to be heard. The hearing will now commence on the Monday morning with legal arguments for and against the granting of a postponement of the tribunal.

Usdaw is hoping that the court will consider the best interests of the claimants, who have waited patiently for justice, three of whom will be travelling to Bury St. Edmunds to appear as test case witnesses on behalf of all those dismissed, and allow the case to continue on the day.

Brewers Skewered as Charity Commission Takes Action – Part 2

What are they saying about CBC/CRE?
For behind the scenes conversations, follow these twitter hashtags:

Phil Groom writes:

Thanks to Mark Bennet, who explains a little of what this situation means:

The interim manager’s job is to obtain control of the assets and to ensure that they are used for the Charitable purposes for which they were intended. I would hesitate to say that someone just appointed would have control of all the assets, but they will be moving quickly to obtain such control, and also to trace any assets which have ‘gone missing’.

Whether this is good news so far as the USDAW cases are concerned is unclear, since court awards cannot be paid if there are no assets to pay them. However, it should bring some much-needed clarity to the situation.

Here is an official explanation:

Interim Managers: 2007/08

An excerpt from that page:

The Charity Commission has the power to appoint an Interim Manager [1] to act as a receiver over a charity’s property. We can use this power only after opening a formal Inquiry under section 8 of the Charities Act 1993 (as amended by the 2006 Act) and after we have obtained evidence of misconduct or mismanagement in the administration of a charity or if it is necessary to protect the charity’s property.

Usually we appoint an Interim Manager to manage a charity to the exclusion of the trustees and the charity normally has to pay the Interim Manager’s fees. For this reason we appoint an Interim Manager only after very careful consideration of other possible solutions to the problems the charity in question faces. Where possible, appointments are made after a tender exercise, the purpose of which is to find an Interim Manager with the right skills and experience at a price that will provide the charity with value for money.

Although we can make appointments with the agreement of the charity trustees, most are imposed because in our view the problems facing the charity are sufficiently serious and the trustees are either unwilling or unable to put matters right themselves.

Pursuing the Brewers: Contact Info, Facts and Resources

Phil Groom writes:

An unpaid supplier has asked for contact information for the Brewers with a possible view to pursuing them through the courts: I’ve posted the info I have at the bottom of this post, which is all a matter of public record, but I’d like to run through a few points before we get to that.

Suppliers Discussion Group

At the end of last year we set up a private online Suppliers Discussion Group in the hope of facilitating the possibility of a joint action and/or coordinated response. That group still exists: if you’re a supplier and would like to join the group, please request an invitation. Whether or not it achieves anything is entirely your call, of course, but if you simply sit there on the sidelines moaning that nothing’s happening and no one’s doing anything, what do you expect? Ask not Who’s going to do something? but What can I do?

Today is Good Friday and yes, if you take a stand there’s always the risk that, like Jesus, you’ll end up crucified. That’s part of the deal when you follow Jesus and if you didn’t take that on board when you signed up, that’s either because some evangelist wasn’t telling you the truth or because you didn’t read the small print, even though it’s writ large on every page of the Gospels. Christianity isn’t a shortcut to health-and-wealth: charlatans like the Brewers who use Christianity as a way to pimp their own egos and empires are wolves in sheep’s clothing. Sermon over: if you haven’t got it by now, you probably never will.

Taking a Stand

So what, in practice, has happened when people take a stand against the Brewers? They’ve been paid. Every case we have on record of either an individual or an organisation/company tackling the Brewers head-to-head has resulted in settlement; and when J Mark Brewer attempted to take himself to court in his bogus bankruptcy filing, the only thing he demonstrated was his own incompetence, to the point where the court threw him out as a laughing stock. The only way he was able to get out the hole he’d dug for himself was to hire another attorney to haul him out: the man is, quite frankly, an oaf. As a friend of mine is fond of saying, the facts are friendly. 

Cases Resolved So Far

1. Via this blog:

2. Listed by Brewer himself in the official SSG Statement of Financial Affairs (pdf) filed June 19, 2008, with the US Bankruptcy Court, Texas:

  • TBS, The Book Service: Stratford upon Avon County Court, refs PJS/091710 and  8SV00246, p.7.
  • Nick Johnson, refs 1806366/2007 and 1806489/2007, p.6.
  • Kirsty Smith, ref 7QT61858. Listed as ‘Pending’, p.6, but since resolved.*
  • Melanie Carroll, ref 2600803/2007, p.6.
  • Miss A C Speddings, ref 2801875/2007. Listed as ‘Pending’, p.6, but since resolved.*
  • Mike Pickering, ref 1502210/2007, p.6.

* Information supplied in private correspondence.

Most of these have been out of court settlements. Why? Because, quite simply, the Brewers know they don’t have a leg to stand on. The bankruptcy filing scam and the transfer of company assets to other companies were nothing more than a ruse set up in an attempt to evade SSG’s creditors: any review of the evidence will almost certainly result in them being laughed out of the court.

Certificate of Employers Liability Insurance

Certificate of Employers Liability Insurance

Furthermore, here in the UK, SSG has not gone into administration since the case was thrown out of the USA courts; and despite Philip W Brewer’s protestations that there was “no relationship going forward” between SSG and the Durham Cathedral Shop Management Co., we now have very clear evidence of precisely that continuing relationship in the form of the shop’s Certificate of Employers’ Liability Insurance issued in the name of St Stephen the Great Trust (Policy No. SB06000002/05ACI0125269) for the current period November 2008 – October 2009.

Whether a certificate issued in the name of one company to cover employees of what is ostensibly another company is valid is another matter, of course: I’ve asked Ecclesiastical for clarification. The point here, however, is that the Durham shop and, I’m told, the other shops are displaying this certificate: SSG accepts liability for the Durham shop employees. Any claims that the company has ceased trading and has no liability for other aspects of the shop’s business such as its debts are dubious at best if not complete codswallop. 

Thanks to Melanie Carroll for pointing out that the cost of starting a Small Claim through the Courts is relatively small — as little, in fact, as £25 for a claim up to £300 (Fees Leaflet [pdf]) if submitted via the Money Claim Online service, although this service requires an address in England or Wales where documents may be served. If you back up your claim with appropriate evidence — by visiting a shop and taking a photograph of an item you supplied but haven’t been paid for, for instance — you should be in with a good chance. See HMCS (Her Majesty’s Court Service) Making a Claim for practical guidance on submitting a claim or contact the HMCS Helpdesk.

Resources

Brewer Addresses

The Brewers’ addresses are a matter of public record:

1. From the SSG/SPCK Bankruptcy Filing documents:

J Mark & Philip W Brewer - addresses filed with the Texas Bankruptcy Courts

J Mark & Philip W Brewer - from the Texas Bankruptcy Court Documents

2. From Brewer & Pritchard PC, Contact Us page, which also includes a form for submitting messages directly online:

J Mark Brewer
Brewer & Pritchard, PC 
Three Riverway, 18th Floor
Houston, Texas 77056 
.
Phone: 713-209-2950
Fax: 713-659-5302
Email: brewer@bplaw.com
.

3. From Pima County Court Records, pdf | html (Links broken? Try a Google Search for P21-06-033)

Phil & Beth Brewer
2610 W Bountiful Lane
Tucson, AZ 85742
.

4. Phil Brewer’s Business Card, which he left lying around at asingleblog:

Brewer Enterprises

Brewer Enterprises

.

 

Disclaimer
For the avoidance of doubt: nothing included in this post (or any other post on this site) constitutes legal advice. Any action you may or may not take in response thereto and any consequences thereof are your own responsibility.