Psychic News, SNU Spiritualist National Union and Liquidator

[quote="Admin" The decision to liquidate, directly by the Board is, as I have already said, unusual. More unusual still we have been told a liquidator is appointed not activated. My antenna picked up on this because Liquidators need paying and charge fairly large fees.
I can only consider that this unusual action follows discussion internally and results also from getting external advice. It appears to me certain that these liquidators were involved in this, probably as far back as April. Almost certainly the contact would have to be with someone like the company Chairman, Mr Bruton and a small committee considering the liquidation. It is quite probable the liquidators gave advice on how to proceed with matters and are being paid from within the SNU.]


I don't think we need a crystal ball to work this one out. It smacks all over of a prelude to management buyout. They won't be able to do it in their own name, at least not if the liquidator is on the up and up. Too many employment/creditor issues. If I'm right they'll do it using a frontman who will pay up and grab the goodies. If even half the speculation on this thread is correct they've been clever. Impressive if it wasn't rotten to the core.

Lavine wrote:
"I don't think we need a crystal ball to work this one out. It smacks all over of a prelude to management buyout. They won't be able to do it in their own name, at least not if the liquidator is on the up and up. Too many employment/creditor issues. If I'm right they'll do it using a frontman who will pay up and grab the goodies. If even half the speculation on this thread is correct they've been clever. Impressive if it wasn't rotten to the core."

Thank you Lavine for your comments on this troubling subject, and welcome to the forum. You may well be correct in your speculations when you suggest that the SNU might have come up with a scheme whereby they 'acquire' Psychic News via a 'frontman' - a scheme set up in the hope that the truth about their intentions and actions will not come to light.

As to speculation on this thread - I suspect that the accuracy level is extremely high - an opinion I feel sure will be supported when the full story comes out - which it undoubtedly will.

Regarding the proposed purchase by the 'White Knight' buyer, my info is that this is now dead in the water. The cost asked was too high - considerably above the £30K bandied around. It would seem that when the meeting took place, the NEC had no intention of selling and were simply going through the motions - "We met the buyer, but could come to no agreement." would be the NEC's line.

It was therefore initially felt that it might be cheaper to let the liquidation go ahead and try to buy it from the liquidator. However, the SNU is likely to exclude the PN's title and the archive from the deal. Not sure if it can 'asset-strip' a company on the point of liquidation, but you never know. The fact that the SNU is the main creditor may have a bearing on this, but that seems to be the intention. In which case there is nothing of any worth to buy from the liquidator.

This brings another issue; in turning down the offer the NEC denies the SNU members the prospect of retreiving some of its losses (say £30K or so) from the liquidator, in which case the NEC may be in dereliction of their fiscal duty to the members.

However, as Lavine has shrewdly suggested, what if the Union - via a proxy of some sort - were to buy the assets from the Liquidator? That would explain the NEC's refusal to sell. Clearly there is an agenda of some kind going on here. It would really not be about money as the NEC claimed.

Curiouser and curiouser . . . .

Geoff Griffiths wrote:Regarding the proposed purchase by the 'White Knight' buyer, my info is that this is now dead in the water. The cost asked was too high - considerably above the £30K bandied around. It would seem that when the meeting took place, the NEC had no intention of selling and were simply going through the motions - "We met the buyer, but could come to no agreement." would be the NEC's line.

It was therefore initially felt that it might be cheaper to let the liquidation go ahead and try to buy it from the liquidator. However, the SNU is likely to exclude the PN's title and the archive from the deal. Not sure if it can 'asset-strip' a company on the point of liquidation, but you never know. The fact that the SNU is the main creditor may have a bearing on this, but that seems to be the intention. In which case there is nothing of any worth to buy from the liquidator.

This brings another issue; in turning down the offer the NEC denies the SNU members the prospect of retreiving some of its losses (say £30K or so) from the liquidator, in which case the NEC may be in dereliction of their fiscal duty to the members.

However, as Lavine has shrewdly suggested, what if the Union - via a proxy of some sort - were to buy the assets from the Liquidator? That would explain the NEC's refusal to sell. Clearly there is an agenda of some kind going on here. It would really not be about money as the NEC claimed.

Curiouser and curiouser . . . .

You make some very interesting and pertinent points Geoff. I also think Lavine's remarks are extremely relevant - I have felt all along that it was not just a matter of financial difficulties, since those that existed could almost certainly have been rectified had the NEC had the will to do so. I am convinced that it has been the desire of the NEC to no longer allow Psychic News to be independent - but to be 'taken over' by them and put into a form that they can control, both in terms of news content and philosophical approach.

I can understand that an organization such as the SNU would want to have an effective vehicle for communicating its brand of Spiritualism. However I consider the 'stealing' of a weekly paper which has a long history of being independent, indeed was set up with that very specific intent - to be independent of any of the different strands of Spiritualism so that it might write about all freely - to be a shocking betrayal of Maurice Barbanell's dream, and of the staff of Psychic News who have tried to honour that intent.

Psychic News was intended to be a means of communication for all Spiritualists, not just the SNU. By closing it down in the manner it has, clearly for reasons other than financial ones, the SNU executive has acted in what I can only consider to be a totally unethical, unspiritual and self-serving manner. It would seem that the directors of the SNU really do not care about the enormous damage they have done. They, it would appear, are quite happy, even I suspect smugly pleased with the way they have managed to achieve this.

Geoff Griffiths wrote:Regarding the proposed purchase by the 'White Knight' buyer, my info is that this is now dead in the water. The cost asked was too high - considerably above the £30K bandied around. It would seem that when the meeting took place, the NEC had no intention of selling and were simply going through the motions - "We met the buyer, but could come to no agreement." would be the NEC's line.

It was therefore initially felt that it might be cheaper to let the liquidation go ahead and try to buy it from the liquidator. However, the SNU is likely to exclude the PN's title and the archive from the deal. Not sure if it can 'asset-strip' a company on the point of liquidation, but you never know. The fact that the SNU is the main creditor may have a bearing on this, but that seems to be the intention. In which case there is nothing of any worth to buy from the liquidator.

This brings another issue; in turning down the offer the NEC denies the SNU members the prospect of retreiving some of its losses (say £30K or so) from the liquidator, in which case the NEC may be in dereliction of their fiscal duty to the members.

However, as Lavine has shrewdly suggested, what if the Union - via a proxy of some sort - were to buy the assets from the Liquidator? That would explain the NEC's refusal to sell. Clearly there is an agenda of some kind going on here. It would really not be about money as the NEC claimed.

Curiouser and curiouser . . . .

Very interesting territory the SNU are getting into Geoff as the NEC have clearly supplanted the Board of Psychic Press and a lawyer could argue they are running the Company directly as de facto Directors. It may even appear that the directors final act was the passing of the resolution and since that date as far back as May 22 the NEC has effectively been operating as de facto directors trading a Company they intend to allow to be liquidated as insolvent.

The reality is that the "White Knght" has backed them into a corner now. The SNU had a real chance to pocket some cash and see all of the creditors and employees properly looked after.

Legally now the company has resolved to liquidate they cannot asset strip or cherry pick assets for debt. In a liquidation all assets have to be sold for the highest price to be shared equally in cents to the dollar over all creditors. Now if they have a friendly liquidator they may be able to do what they are trying to do, indeed I suspect many businesses get away with this regularly, although it is an illegal act. Therefore the NEC would be knowingly trying to get round the UK law, an act which has every chance of bringing disrepute on the SNU. Additionally this is not just any business, it is a body that regards itself as the pinnacle organisation for Spiritualism a movement that believes in Truth and Personal Responsibility.

Have they found a proxy to buy the company. Who? and he would have to match or better the offer of the White Knight. All the Creditors must be paid out, full employee benefits. Then they have to hand the whole shooting match to the SNU. Maybe for a White Knight a wealthy Black Rook to maintain the chess board approach.

There is no way they can cheat on this because if challenged any misdemeanour is a legal issue. This would be deliberate manipulation of the events to achieve a preference for the major creditor, the SNU, through its own NEC exercising their power as de facto Directors of Psychic Press. If that gets out it will reflect extraordinarily badly on the SNU. Indeed something that has as many loose threads as this is bound to unravel somewhere to catch up with the NEC in time.

I am sure they realise now that the right thing must be seen to be done, it needs to be communicated openly and honestly.

By the way all readers of this thread there is another discussion closely related to this on a thread called The Spiritualist National Union Closes Psychic News -Why ? on this forum
http://spiritualismlink.forumotion.com/psychic-news-under-threat-of-closure-f37/spiritualist-national-union-snu-close-psychic-news-why-t889.htm

This is interesting - extracts from the standard reply being sent out to people seeking refunds for tickets or subscriptions paid for future editions of psychic news.

Unfortunately Psychic Press is not able to refund your outstanding balance for your subscription of Psychic News.

Psychic Press has struggled financially over the last three years and is no longer in a position to meet its financial obligations. We have not been able to ride out the recession, sales of books and the paper circulation dropped over the past 18 months while overheads increased. The funding that was offered to the company would not have been enough to make the company a going concern.
That was why the board took the decision to recommend that Psychic Press 1995 Ltd be wound up.

If these negotiations are unsuccessful then PP 1995 Ltd will resume the liquidation process as announced at the SNU AGM. That being the case all details of who the company owes money to will be given to the company which will be appointed to liquidate PP 1995 Ltd. They will then arrange a meeting with creditors.

Now there are a few issues with this; the Board decision was on 22nd May, and these particular letters are being released in August. The whole situation should have been crystallised by 6th June, as this is not a voluntary solvent liquidation but an involuntary insolvent one.

The mention of discussions to sell is irrelevant because there was no buyer in the picture until the very end July early August. It is a mere distraction to try and take the eye off the much overdue notification. Indeed this notification was a responsibilty of the directors of Psychic Press (1995) Ltd, to send to all Creditors, not just those complaining. Indeed, we are aware that, worse still, the Directors took money into the general operating fund, to pay bills, that was received after May 22nd, for events and publications they knew would never be delivered.

However once again the things not said are very relevant.

Yes my nominated Black Rook could be in the picture negotiating but if the NEC would not sell to the White Knight why then to the Black Rook. Unless - but I will get to the unless in a minute.

Let us look at a few hypotheticals about how this was intended to probably work before it all got complicated, and the whistle got blown.

I suspect that the major creditor is the SNU, given the nature of the cash problems, it is entirely likely that they did not collect the cash for things they supplied, such as office rent, building up a reasonable debt.

Conversely I suspect that local suppliers and printers are owed little or nothing so they are not going to get excited.

The balance of creditors are all the people who have paid for tickets, lost their newspaper subscriptions etc plus the staff, if not all their employment benefits are paid out. A very broad spread of relatively small debt which is unlikely to be pursued, especially if the assets are insufficient (as any experienced liquidator would tell you).

I believe that the original plan was to move quickly and silently, to not only appoint a liquidator but to move quickly to create a creditor's Committee of Inspection, which, given the nature of the debt and weighting in favour of the SNU, would have comprised only NEC members (with Mr Bruton in 3 roles, on this committee, President of the SNU and Chairman of Psychic Press). The SNU would have offered enough cash for the assets to pay the liquidator and all winding up costs. The liquidator would have asked for the Committee of Inspection's approval for the deal and it would have obviously agreed. The SNU get the assets, the liquidator writes to all the other Creditors who have bothered to prove their debts, and apologises saying he has achieved the best possible outcome, but there is no money to pay them back.

Protesting costs money, so the disgruntled ex creditors would have just gone away. Indeed, this may not be a very ethical method but it is entirely legal if you can pull it off.

This could still be how the matter falls out but it is now much more of a gamble given the Liquidator is on notice that there is a willing buyer out there. However, is there sufficient money to challenge this and ensure that it is dealt with by legal action.

A somewhat risky step both for the NEC and the liquidator so we could see a variant of the favourite way discount chains seem to arise like the phoenix from financial destruction.

A new buyer (lets say the Black Rook) steps in and offers the NEC a sum of money. The NEC sell the company on, trumpeting they have done so for a larger sum than the White Night offered, and achieved a better result.

Black Rook then investigates the company and says Hooley Dooley I have been dudded. He immediately tries to recover some of his money by selling the assets back to the SNU for the value he paid plus the liquidators money and liquidation costs. The Company is then liquidated as before.

The same deal, some risks but the type of arrangement that goes on in the business world. Pretty clever but hardly in keeping with the higher tenets of Spiritualism. There are variations around this but the Company cannot keep trading without dealing with the small creditors.

The reality is the company is insolvent, all the creditors will not be paid and its about time the NEC looked at any variants and realised they must at the very least front up and pay out all the creditors and staff fully.

This would, in a totally legal way, leave them the assets. Then the only issue would be the moral one, of destroying a proud Independent Psychic News and ruining the lives of 7 loyal staff to achieve some purpose of their own.

Curiouser and curiouser . . . .

Companies House have just confirmed to me that, as of today, no liquidator has been appointed in respect of Psychic Press(1995) Ltd.

enquiries@companies-house.gov.uk

Hi Z

Nothing strange there, thanks for checking but had it changed this forum would have known. I keep checking and they have not done anything, I have been following that for a long time now. They really have disobeyed all the rules of Companies Law.

Its all academic company law only is in vogue when there is a company once it is in the hands of a receiver then all the rules go out of the window. As to company house the returns are up to date and nothing much will show until the returns are overdue the same goes for the charity commission. Until we know the full story it is all conjecture and it is possible the bank or HMG has frozen the assets and bank accounts. The possible buyers and the SNU would need to deal with them not the SNU. I believe the former management are favourite to buy it backed by the JV trust. Almera By the way a lot of the relavant paperwork will end up in the shredder and will not see the light of day

Almera said: By the way a lot of the relavant paperwork will end up in the shredder and will not see the light of day

Are you in the prediction business now?

Until we know the full story it is all conjecture and it is possible the bank or HMG has frozen the assets and bank accounts.

Perhaps you should follow your own statement above.

I must confess I do throw the odd faggot on the fire now and then however this escapade with the Psychic News really amuses me. The SNU have shutdown the paper and saved themselves a lot of money. There people vying to purchase the paper yet what is there to buy other than a few old bits of office equipment. The psychic press owns nothing and book titles may already have been transferred to the SNU. The Psychic press has no premises or and hereditary property whatsoever the only thing is the order book, goodwill and the masthead that is up for grabs. If some-one wanted to use the title they could start tomorrow by altering it slightly to the psychic Press 2010 and Psychic News 2010. This avenue may already be in progress to fill the gap.Almera

[quote="almera"]I must confess I do throw the odd faggot on the fire now and then however this escapade with the Psychic News really amuses me.


"Escapade", Senor Almera? Such admirably gracious smiling condescension ill becomes this wretched situation. Have you bothered to think about the many disabled or otherwise housebound or isolated Spiritualists who relied on their weekly print copy of PN to keep in touch with life in the Spiritualist community at large? No joke for lonely readers, deprived of a major link with their particular interest. What about the loyal subscribers who have been told (as has a friend of mine) that "the balance of [their] subscription cannot be repaid"? Not funny for pensioners, or people out of work. Not funny at all, I would hazard a guess, for the small staff of the paper.

I hope that the ructions in protest on the Internet about the closure of PN cause the NEC of the SNU to be laughing, sooner rather than later, on the other sides of their faces. My sense of humour is obviously failing me bigtime, but I hope you, faggot-flinger Senor Almera, will also be "really amused" when that happens.

Eilis

Well that's put 'oor Jock' in his place!

Serves you right for posting under different names Almera/Merlin/Jock.

http://www.snu.org.uk/news/pn_statement.htm

The latest statment from the SNU please click on link

Well, well! Thank you Almera for providing the link to the NEC statement. As you may have noticed the statement has been made copyright so we cannot publish it in its entirety on this site. Those who wish to read it must of course follow the link you have so kindly provided on the forum.

Having said that, there is no reason why comment may not be made about this statement, nor are we precluded from quoting short extracts from it with a view to making what might best be described as 'fair comment on a subject of public interest.' This I feel sure a number of people may be inclined to do in the near future.

I am sure you are right about that Lis and much comment will be made over time. Sadly to illustrate that this statement just imay not be all it claims to be let us look at one of the points made towards its conclusion.

"Account also needs to be taken of the creditors of the old company, as the support of subscribers and advertisers alike is crucial."

Of course this is totally at odds with their lack of contact with subscribers except to say no refunds would be made.

There is nothing in that statement that indicates the NEC have learned anything which may amend future behaviour and their is nothing apologetic to the loyal Staff, the creditrs, the subscribers or SNU members for the sorry way this matter has been handled.

Clearly this is already the defining momet of Mr Bruton's Presidency and will be remembered forever. Oh well I am sure that we will begin to unpick other weaknesses over time

This statement was posted on the SNU website on the 12th August 2010.

Almera said: By the way a lot of the relavant paperwork will end up in the shredder and will not see the light of day

A very interesting possibility Almeera, I would think there may be paperwork people would like to see go missing but there are too many people who know and probably, in a place like the SNU, too many copies. I do not quite think the NEC are yet up to having people bumped off to silence them but I stand ready to be proved wrong on that as their track record is not real good.

Until we know the full story it is all conjecture and it is possible the bank or HMG has frozen the assets and bank accounts.

No Almeera if you read what is written you will discover the liquidation has not neen notified to Companies House. HMG would not be involved yet. If a Bank was involved we would have a Receiver in the Company. This is all down to the NEC effectively controlling the Directors of PP or, in effect, standing in as defacto Directors. The delay in the liquidation ensures they remain totally in charge. If it goes pear shaped and the Liquidator turns rough (unlikely as it would appear someone has agreed to pay him, or it would turn rough, those liquidators hate getting nothing for their work and are dab hands with thumb screws) I am sure the NEC are just as willing to sell out the Psychic Press Directors in the way they have the staff and other creditors (woops Mr Bruton is a PP Director). It is the Directors who have, technically, been trading the Company whilst it does appear to be Insolvent.

One thing that really strikes me about all of this is that the prime movers the NEC have displayed an apalling lack of Business and Moral ethics.

On another thread I will pursue how important messrs Bruton Gascoyne and Seaman (VP Spiritual) feel the development of the Officiants and Ministry programs are.

These programs are all about ethics, morals, and caring for others. About the right way to live.

I have run businesses and been a senior manager for 40 years an enduring legacy will be the respect I have of the many I have worked with for doing it ethically and morally even in the toughest times.

Given the evidence we have and the information we see, how are any of these people Living Exponents of what they preach.

The absolute failure of the NEC to live up to the ideals they proclaim is a stain on the SNU together with their Minister and Offficiant programmes. Worse still, is not the NEC largely comprised of people with this qualification?

In the NEC statement it is argued that back in 1995, it was made clear to the SNU that if the trading company, that is, Psychic Press (1995) Ltd made losses, the Union could not use its funds to subsidise this subsidiary of the Union. Apparently, their accountants also advised there would be problems with the Charity Commissioners should the SNU do this.

The statement also suggests that in fact Psychic Press (1995) Ltd “had only made a profit in four of the last fifteen years,” and the 2009 year end accounts (produced in April 2010) “showed the company to be in a loss situation again.”

These two statements leave me wondering – in the years, all 11 of them, when Psychic Press did not make a ‘profit,’ did the company actually make a ‘loss,’ and therefore the SNU in fact subsidised the subsidiary company, despite their accountants advice? Or was it that while not making a profit, the company ‘broke-even’, or perhaps was it that in those years where it did not make a profit, some other ‘organization’ provided funding to cover the shortfall?

The NEC statement really does not make clear what the real financial situation was in regard to Psychic Press (1995) Ltd, or to what extent the costs involved in producing Psychic News resulted in there being “a loss situation.”

A further comment in the statement which I find quite interesting is the mention of profits from Psychic Press (1995) Ltd having been “covenanted to the Union.”

One can only wonder how a company can survive lean times, such as when there are rising production costs, a decline in circulation, or the impact of a world-wide recession, when in the prosperous years when profits are made those profits are siphoned off to the parent company, rather than kept as a resource for the subsidiary company, in order that such profits can be used to assist in promotion, marketing, and act as a hedge against financial shortfalls by internally ‘subsidizing’ the company’s activities (e.g., Psychic News) when times are tough.

One might say that in “covenanting” any profits to the Union (the parent company), the Union made it impossible for the subsidiary to maintain financial viability in difficult times.

The NEC statement argues that with the decline in circulation, by May this year having fallen to 4,000 copies, it was “apparent that something needed to be done, as at this level of circulation the production of a weekly newspaper was no longer economic.” This remark is immediately followed by the statement that the “company was very close to becoming insolvent and, legally, the board of Psychic Press (1995) Ltd was bound to look at liquidating the company.”

So, back in May this year, a month in which I suspect a very significant decision was made by the ‘board’ of Psychic Press, possibly on the advice of a ‘working party, which had throughout April been considering the financial future of the company, especially of Psychic News, they decided that the production of a weekly newspaper was no longer ‘economic.’

One must wonder if it was ‘apparent’ that ‘something’ needed to be done at that time what options were considered? It might have been worth considering the sale of Psychic Press, or Psychic News, to a buyer not so constrained by ‘charitable status,’ or one that, even if having charitable status, was prepared to put into the ailing company sufficient funds to ensure its economic survival, especially if it did not require any profits to be immediately siphoned off back to it.

It might have considered informing the readership of Psychic Press, of the financial uncertainties, and making a call for increased circulation to ensure the survival of Psychic News. It might have included a number of other potential options, but it would seem that none of these were.

What does seem ‘apparent’ is that those who orchestrated the decision to cease publication of Psychic News, and the alleged intention to place Psychic Press (1995) Ltd into liquidation may have looked only at ways in which to strip the assets of that subsidiary company, namely the masthead and archives of Psychic News, in such a way that the SNU gained control of it for use under its own banner – as a means of ensuring that it would no longer be an independent publication but one which would only reflect the values and the version of Spiritualism’s history that the Union wishes to promote.

One must also wonder exactly what the words “the company was very close to becoming insolvent” and “legally, the board of Psychic Press (1995) Ltd was bound to look at liquidating the company” actually mean.

It was close to being insolvent but not actually insolvent? It was about to become insolvent in the foreseeable future? It was no longer financially viable – but not yet insolvent?

The reality is if in May 2010 the ‘board’ of Psychic Press were aware that the company was close to a state of insolvency – they should have called in an Administrator. They should have notified subscribers; they should have refused to take further subscriptions. They should have returned monies received for future events which they knew would not take place because the company was likely to be liquidated.

Yet the ‘board’ did not apparently do any of these things. No administrator was appointed. No subscribers were warned, nor people who paid money for events which the company (and the parent company, the SNU) KNEW would not take place.

Worse, after the ‘board’ apparently decided that the company was no longer financially viable and must be liquidated, and undoubtedly notified the parent company to this effect, there is the claim that the advance payments for future events was collected and banked. It is clear in doing so, if this allegation is correct, that it was done at a time when either the board, or the board and the parent company, realised that those people would neither get the 'goods or services' for which they had paid nor would they be given a refund.

It becomes crucial to establish when the decision to ‘liquidate’ Psychic Press (1995) Ltd was actually made. Was it indeed on May 22, 2010? If so there is little doubt that continuing to operate was contrary to proper business and legal practice. If that date is correct, to have taken money from people after that date must surely be improper conduct – perhaps even fraudulent conduct.

Again, the statement suggests with the words the “board … was bound to look at liquidating the company” also appears to obscure the reality of both the situation and the legal requirements when a company is either insolvent or about to become insolvent.

If the board made that decision back in May 2010, why is this company still not in liquidation? Especially since the Executive Director of Psychic Press (1995) Ltd has apparently been sending out letters to people seeking a refund of their money and subscribers who have complained, stating that Psychic Press “is no longer in a position to meet its financial obligations” and “is not able to refund your outstanding balance for your subscription of Psychic News.”

Apparently it is not in liquidation, despite the decision that it be put into liquidation being made back in May, because, so the SNU executive claim, the trading activities of Psychic Press (1995) Ltd “have been suspended to protect the creditors.”

I would ask, just how the NEC can manage to suspend the trading activities of a company which by its own statements it alleges is not financially viable or even insolvent, without appointing a liquidator or at the very least an Administrator.

As for protecting the creditors – I would ask just which creditors might that be? The actions of the NEC – who seem to be now acting in the role of ‘quasi-directors’ of the subsidiary company (it doesn’t appear to be the board of Psychic Press having much say in what is happening) don’t seem to be doing anything to “protect” the subscribers of PN, or the advertisers, or those who paid good money for events which won’t take place – and certainly they are creditors. No it seems the only creditor that the NEC is talking about protecting is the major creditor – that is the SNU.

As of tonight - 21.20 hrs - Psychic Press (PN bookshop) is still 'open for business' albeit asking potential customers for a phone call to buy.
Seems they have no scruples at all.