Psychic News - Spiritualist National Union NEC circular Oct

Hi All,

This turned up extremely quickly after its release and it is most noticeable for what it leaves out, distorts or changes the history of.

It may satisfy some members by presenting a sanitised version of events suggesting strong action by a powerful NEC but it just adds more things for the critical outsiders to look at. As such it is a surprise the NEC felt compelled to attempt such a justification of themselves when the majority of SNU members seemed totally uninterested in what was happening and the fate of PN. A circular like this may just help to raise the awareness of how poorly Bruton and the NEC have been behaving throughout this. SNU members might just go looking for the criticism that they seem so sensitive about and discover that this circular does not share all of the appropriate information or present all of it correctly.

Without any risk of being called out for telling untruths it is a very easy document to pull apart. The first 2 of its 4 pages can be ignored as a rehash of what has appeared elsewhere, albeit a glowing account of what the SNU did for PN since 1995. The nitty gritty, or lack of it, appears in pages 3 and 4.

It hedges round the insolvency issue by saying it was "very close to becoming insolvent". Clearly it was well beyond this and the fact it has not paid out all its creditors or met in full its legal obligations to the staff proves it is indeed insolvent.

Strangely it makes no mention of these two matters, the non payment of staff or many creditors, clearly the NEC do not feel these major moral and ethical issues should be drawn to the attention of its members.

It also says it withdrew the company from liquidation because the liquidators fees had risen dramatically and would make the company insolvent. A strange decision really given that Psychic Press is now insolvently in limbo, as the NEC have decided it must remain. Well it really has to they could not face a liquidator whilst insolvent and claiming ownership of the two valuable assets I suspect that is the true reason they pulled out. Someone would pay and at the least it would be the directors.

So Psychic Press must remain that way unless the creditors force a liquidation or go away at which time the SNU may just be able to reregister it as solvent and creep off with the assets. Sadly if they attempt to use the masthead before this has happened then the whole thing will catch fire again. They are stuck with a masthead and archives that the previous owners say went into Psychic Press whilst the SNU claims they did not, legally challenging in a liquidation, yet another reason for the NEC to pull out.

My next post will be a detailed examination of key passages from the last two pages of the document. I will comment that it makes what appears to be an unnecessary and gratuitously nasty remark against its ex editor, I am sure that at some stage we will find a response to this. For the NEC to dare to criticise its employees after what it has put them through is an utter disgrace. I just remind people to read Paranormal Review for her interview, which I am sure only mentions things that Roy Stemman knows can be proved http://paranormalreview.com/articles/20100819

Admin, I will pick up on three points and ask your views.

[Quote] It also says it withdrew the company from liquidation because the liquidators fees had risen dramatically and would make the company insolvent. [Quote]

Why did the liquidator fees rise dramatically? That implies the original fixed price liquidation which was reported, changed for some reason. What changed? Obviously the liquidator decided there was more work to do than he expected. In other words something new must have happened, but what? Isn't Psychic News a small straightforward company?

[Quote] Strangely it makes no mention of these two matters, the non payment of staff or many creditors, clearly the NEC do not feel these major moral and ethical issues should be drawn to the attention of its members. [Quote]

I have not seen statement but is there really nothing about the staff getting no money? If not it is shocking.

[Quote] For the NEC to dare to criticise its employees after what it has put them through is an utter disgrace. [Quote]

What does this say about them?

I promised yesterday to take a long look at the document in my last post, to some extent this will also cover the question that Veritas raised.

Although pages one and two rehash past information there are a couple of points that are worth looking at.

It is worth noting that they push the issue of a charity supporting a loss making commercial venture from the start of Psychic Press (1995) (PP). Apparently to this end the SNU bought the company but 4 individuals leant the money to start the company, which was effectively commencing as a new business which only acquired the assets of the original Psychic Press. It made losses at first, which were presumably covered by the funds put into the business. The document comments that after one year of losses it broke even in 1996, small profit in 1997 and 27,000 pounds in 1998. At this stage those loans had been repaid. However, rather than let PP build up reserves for a future rainy day the profits were covenanted to the SNU.

I find this fascinating because the SNU had not in any essential way contributed to PP financially yet then denied it the opportunity to have the reserves for tough economic times.

The rest of the pages are a litany of what was achieved, as if it was the SNU’s successes and no reflection of the great work done by the staff. It gives a clear insight into the brain processes of the NEC. No real praise for their employees and no attempt to treat them properly.

Two points which get mentioned are however worth a look at;
The holding of demonstrations to provide extra funds for PN, which was an initiative strongly driven by Susan Farrow. Most notoriously the two which were cancelled where the Chairman and Executive Director tried to use the money until they became aware how illegal that act was. Of course they will try and spin out of that one but at least one ticket holder did receive a letter telling them to contact the liquidator (back in August strangely) but they were unlikely to receive anything as the company was insolvent. This from the Executive Director and then once the illegality of the actions was realised amazingly all ticket holders received a refund from the SNU itself. It would be nice to know how that meets their obligations under their Charitable Status.

That there were 4 extra pages added to Psychic News. Well, well, let us look at the timing of this it occurred in 2009 and was funded firstly by the AFC then by a private donor. A very unlikely step with a paper that even then the Board and Accountants must have known was running close to insolvent, given the December 2009 final accounts almost certainly showed it was insolvent despite their claims in page 3.

Surely the addition of 4 pages should have been trumpeted about and used as a major promotional tool. It appears that by keeping the hands on people in the dark about the real state of the finances they never gave them any opportunity to drive a recovery programme. At the same time agreeing to extra pages gave a different message about the health of the paper.

Oh well once again they present the extra pages as one of their successes not the brilliant idea of the editor and deputy editor.

Moving to page 3 we begin to get to the nitty gritty, “accounts for the year ending 31st December 2009, showed the company to be trading at a loss.” Hmm no surprises there it had been before, however, this clearly understates the problem, I suspect this should say showed that PP was insolvent but of course for a Director to print that accepts that they traded a business while insolvent. They make it worse by stating that the circulation was falling and by May 2010 it was very “close to being insolvent” and the Board were “bound to look at liquidation”. Actually what the board were bound to do then was to cease trading or appointing an Administrator. However, by doing the latter the NEC and Owners would have lost control of matters, something that they were clearly refusing to do.

Once again the dating does not stack up and it is clear that the business was insolvent. The final proof as ever is it has ceased trading without paying out the staff and all creditors

They then note the JV Trusts offer of funds to help PP and their reasons for refusing, nominally to prevent the JV trust from committing a breach of Charity Law. They comment on it also as it would only “put off an inevitable demise”. Surely this would not be the case because a properly planned resuscitation would have prevented this after all Bruton said at the Conference (and has repeated since)

“Psychic News is too important to lose, however we have to accept the need for change and evolve the format into one acceptable in this modern age, this is the challenge and I will pledge to you today that every effort will be made to secure success, this is one aspect of our history that is too important to lose.”

Why not then take this money and work with the existing staff to achieve the same result. Instead he destroyed a successful team and has severely damaged the lives of the ex staff members.

This is an astonishing act for anyone and especially from the head of a Spiritualist Organisation

Of course they then plough through the hoary chestnut of the charity and being unable to prop up an ailing commercial venture. Yet the AFC could give 5,000 pounds for 6 months extra pages. So with funds from elsewhere, money from the AFC and a forgiveness of rent from the SNU the entire business could have been retained and redeveloped. In doing so they would have had the full support of all of Psychic New’s other stakeholders and all independent Spiritualists. Sadly from their lack of reaction at the closure of Psychic News I doubt the majority of SNU churches would have helped.

It is interesting that they mention the Working party after the first mention of the problems in May. The working paty of course excluded two Directors of PP and commenced in April, meeting with the liquidator for advice before the May board meeting. Later on they mention his fee would have been many times more than the original contract so one would assume all of this was in place well before the May 22 meeting.

In honesty I believe that the NEC really should not try to obscure facts in a release like this aimed at giving its Members the “true” story. However, to give full details in their correct order would not help the way they may be perceived by those members.

It goes on to say that the Board decided it “would be wound up with effect from a date to be determined by the Executive Director” . This is preposterous as the company was going to close in an insolvent manner. A ludicrous and almost certainly illegal decision , if it was insolvent call in an Administrator to safeguard the Directors, oh heck they would lose control.

The release then has an unessary and nasty go at the Editor who was asked to do a “costing exercise and feasibility study for producing the suggested new format” then comments that “the former editor failed to address the points made by the working party” . All such a petty and spiteful comment like that does is show how appallingly they wish to continue to behave. On top of that, whilst failing to be honest in this release to members as we can clearly see, who would accept that comment as having any validity.

We move on to the agreement of the Union to the action of liquidation but now on a date to be agreed by the Executive Director in liason with the “Officers of the Union”. PP’s board are no longer involved apparently . Yet this was not a members voluntary liquidation, there were no statutory declarations of solvency as required for that. This was a creditors liquidation so who was kidding who that they had a right to dictate the timing.

None of these legal niceties are being explained to the members. They also gloss over the decision to liquidate on June 13th suddenly pulled out of on June 14th. I suppose those are inconvenient facts which would disturb the nice timeline they are developing in the narrative. Members may, like all of us who have watched the horror unfold, wonder if their NEC had a clue what it was doing.

Still, somehow glossing over the other issues they get to the AGM announcing the liquidation from the 25th July. Of course it was in that period they received and rejected the offers of funds fronm the Trust help, not as it may appear to be from the narrative sometime earlier. They had decided to liquidate before anyone offered support. Taking the comments up earlier makes them to seem as if they had factored these monies/offers into the decision. This of course makes them look better but is presenting an incorrect factual account. The monies were offered after the decision and it is clear this was always what the NEC intended to do regardless of any possible rescue packages.

They then claim that they requested a defferal of liquidation while the JV trust negotiations took place. My direct contact with the liquidator shows that he could not be involved until appointed and that would only occur after a Creditors meeting. This is very clearly an attempt to show they were doing the right thing whilst clearly continuing to operate in an insolvent manner.

Once again they manage to then mention the negotiations as pretty straight forward. However, we know they were not at all. The JV Trust thought that by buying the Company it would get everything. The news that the Masthead and Archives were not included was a great shock to them as Roy Stemman’s Paranormal Review indicates. It was also a major shock to the people who sold the assets to PP the STF.

This document now sent to members gives, for probably the first time, the details of the SNU claim that the Masthead and Archives are Union Assets. I am sure that no one involved in the sale proceeding from the STF sider had the slightest idea that the SNU would claim it had been gifted the assets. I am sure that the STF felt it had received its 1 pound consideration from Psychic Press (1995) as the contractually required consideration to conclude the transfer of all assets to that Company.

It is quite clear that in his role as a negotiator for the JV Trust Eric Hatton the ex President of the SNU knew nothing about this. Yet this release to members names him as being directly involved at the time of the negotiations to buy PN from the STF.

The claim the SNU makes is that they were told that the old Psychic Press was gifting the Psychic News operation to the SNU with its masthead, equipment and archives. That the SNU fearing the failure of the business protected the masthead and archives by taking them as Union Assets never placing them in Psychic press (1995). Now of course such an action to hide assets in case of failure is probably invalid even if it occurred as said. I am sure any liquidator worth their salt would have a go at that as these were clearly the only items capable of sale. I also suspect that the STF would be more than happy to assist in that process because it is clear that their records differ from the SNU.

This is actually a vital link; I believe the whole idea of liquidation at which for the payment of the liquidators fees the SNU acquired all the assets of PP was to avoid having to rely on this rather suspicious claim, that has appeared as if by magic, at the moment someone wanted to rescue PP. I am pretty sure that the SNU would not want to have this newly stated claim tested by a court of law.

Whatever the case regarding ownership, this refusal to part with the crucial assets put an end to the negotiations with the JV Trust. To hang on to these assets the NEC decided not to let PP live. All stakeholders in PP would have benefitted in some way and the independent paper would quickly have been resurrected. In its small minded way this act guaranteed that the Staff would not be paid out and many creditors would lose their money. In reality to have paid nothing for the assets, pocketed profits and decided to liquidate why would they not let it go?

Of course their circular to members misses all of this and somehow blames the JV Trust for the appalling actions of the NEC. The reality is that it must have been morally and ethically correct to hand over the baton to a new owner if it protected the welfare of the staff and other stakeholders. It is interesting that the NEC try to look like tough guys claiming that they gave an ultimatum to get an offer whereas Roy’s report says that the JV Trust made the first call in dropping negotiations, sadly I know who I would believe.

They then said that they appointed the liquidator and an announcement was made on the Unions web site in accordance with the liquidators instructions on the 28th August 2010. Even that is incorrect the original announcement was wrong. After my contacts with the liquidator a revised statement was issued. I suspect there are other errors in this section and we know that the staff were being totally stressed by the actions of the NEC. We also know the liquidator could only be appointed by the creditors at the first meeting of creditors. For the NEC to know Berleys would be appointed means that in paying creditors they knew they had a majority debt in money terms, to ensure that appointment and control of the subsequent committee of inspection. Of course for the NEC to reveal this level of control in a circular to members may not be wise so they keep saying it was the liquidator that did it.

Well we know get to the actual creditors meeting when the liquidation is called off and we get a new reason - the liquidator’s fees. Well the liquidator’s fees would have grown substantially once he realised the mess that existed and the level of scrutiny he would be under. He had, as was expressed with some irritation, received many emails from me, all of which (plus some more items) had gone to the Companies Investigation Bureau as he knew. He had also forwarded all of my emails to the SNU so, not unnaturally, they were as irritated as he with me.

I believe originally he thought it would be a simple walk in, accept the fees from the SNU for the assets and walk out. There was no thought that his fees would place the company into an insolvent position. The Directors had let PP trade insolvently and intended neither to pay out any money for the staff entitlements nor repay any more of the creditors. These were facts he knew before he came along, they did not bother the liquidator because he expected that no one would make a fuss and wreck the cunning scheme they had planned. I suspect he, like the advert for another liquidator suggests, did this work all the time, allowing companies and directors to avoid debts to start up again. Now it is no surprise this circular avoids any mention of this plan.

Once the liquidators knew that there were major protests then they realised that there would have to be a proper review. Their fees do not make the company any more insolvent than it already is. The only way their fees could be paid was either that the owners paid them, or that they acted against the directors for insolvent trading or they went and pursued the SNU for the masthead and archives paying themselves from the proceeds of sale. It is rare that any owners pay for liquidation and the only way the SNU could do it was by buying the assets; however, I would assume that the SNU paid the costs Berley’s wanted for the aborted liquidation to get them off the case.

Of course the last thing the SNU wanted was for the Directors to be prosecuted and/or the assets to be dragged back from them and sold. In reality this is how Liquidators cover their costs and they would have been very diligent about it.

You may also notice that the shareholders withdrew the resolution to liquidate. They could not, it was made by the directors of Psychic Press and only the board of Psychic Press could do this the owners have no standing in a Creditors Liquidation. However, you will notice that at all times since May 22nd it is the owners who have been acting. This is clearly improper as they were also a creditor and the major beneficiary if the assets were not sold.

At no point has either the Chairman of PP and President of the SNU Bruton or Mark Bradley the Executive Director performed their duties properly. Clearly any insolvency practitioner would pursue them for insolvent trading and pursue the assets they have claimed they owned since 1995. I am sure Berleys, who the working party dealt with in early May, told them this. Funny they never mentioned they had spoken to a liquidator in this circular, except to mention the fees would be several time larger than they originally contracted for. Now who contracted for this, the SNU, or was it another insolvent contract agreed to by the PP directors.

Not surprisingly we get a sanitised version of events for the members who really should know all of the events in proper order not the potted SNU friendly version of what happened once again the statement obscures and excludes items

The final section, 2.5, rounds out their defence in ringing manner making no apologies to anyone about what they have done. Concluding with a criticism of the comment of censorship in the last edition and stating that they honoured the undertaking given to the STF 15 years before.

It makes the NEC sound like all round goodfellas. Except there were always other ways which the paper could have been saved except a small gang of four decided that they knew better, in their arrogance, or else wanted PN dead in a truly independent form. These same NEC goodfellas have behaved abominably, worst of all, to their staff, then to the creditors, subscribers, ticket purchasers, to the volunteer contributors and to Spiritualism Generally.

Just remember by their latest act they have knowingly stopped their ex staff from receiving the money they may have received from the Government in lieu of the amount the NEC intended never to pay them. The behaviour throughout would have been shameful for any business, for a peak Spiritualist Body it is absolutely dreadful. I just hope that enough members see this rebuttal to ensure that the NEC receives more and more questions.

I have no idea how they are going to get themselves out of this mess, every time they try they sink deeper in the mire

ust remember by their latest act they have knowingly stopped their ex staff from receiving the money they may have received from the Government in lieu of the amount the NEC intended never to pay them. The behaviour throughout would have been shameful for any business, for a peak Spiritualist Body it is absolutely dreadful. I just hope that enough members see this rebuttal to ensure that the NEC receives more and more questions. [/quote]



I was in the SNU for a few years and left because they were so secretive and devious with the churches but this business with the Psychic news staff is a disgrace when you think they are supposed to live by the brotherhood of man. Its a sad thing that the churches are still acting like little lap dogs and lapping it all up without thinking for themselves. Even if they don't care about the PN you would think they would care about disgusting treatment of their fellow man.

In “Paranormal News” 10/7/10 Roy Stemman wrote:

"Many years later, I became a director of Psychic Press Ltd, the company which published it, and eventually its chairman. In time, as it encountered various financial problems, the Spiritual Truth Foundation (STF), of which I was a trustee, provided support. But by the mid-1990s, the STF decided it could not continue to pour money into the newspaper. The cost of running the publication from Central London offices was identified as the overhead that was most crippling.

"Fortunately, after negotiations, the Spiritualists' National Union (SNU) agreed, exactly 15 years ago, to take over ownership of Psychic Press Ltd and its publishing and bookshop arms and relocate them at Stansted Hall - better known as The Arthur Findlay College, a large residential centre at which it runs various courses - to guarantee Psychic News survival 'for the foreseeable future' ".

In the latest 4-page SNU statement it states:

The STF requested “....that the Union guarantee a continuation of the publication of Psychic News for at least two years and that the paper remain an independent publication.”

At a meeting of the NEC on the 19th May1995 the then President, Eric Hatton, felt that the STF were trying to preserve a Spiritualist newspaper but felt that the required guarantee to continue publication for two years was not feasible: not even six months could be agreed to.

The SNU Treasurer stated that the accountants said that Psychic Press was completely insolvent. They felt that the Union would need £20,000 capital to cover the first month’s production.

Eventually it was agreed that the transfer would take place at the end of July 1995 and that a new company would be set up, to be known as Psychic Press (1995) Ltd.

It should be explained that it was made clear by Geoffrey Craggs, on behalf of the former Psychic Press Ltd, as long ago as August 1995,.......”was gifting the Psychic News operation to the SNU, together with the operating equipment and records free of all liabilities.”

The report goes on to say that the Union retained the name and the archives in its own name and not that of the subsidiary so that in the event......of the paper making financial losses the......assets could be preserved.

And your point Z?


My understanding iis that all the assets were sold to PP(1995) for 1 pound THE SNU HAS NO RIGHT TO RE ALLOCATE ASSETS.

Maybe, as ever, you are suggesting better and more correct information from inside sources if so cough up and tell all.

I am, sadly, an expert in many of these legal/liquidation aspects and the SNU had no right, having acquired the sole asset of value, to pocket it. Its just like pocketing the one year 28,000 pounds profit, so no reserves were available for bad years .

Lets be honest the NEC and therefore the SNU are a disgrace in this matter.

If you disagree stop sitting on the fence, its quite sharp, and tell us why with teh facts that support it.

Come on Z speak up, speak out, where are you really on this matter let people know, get an interview with Tony Ortzen and make you position clear.

Jim

And your point Z?

I thought it was perfectly clear.

My understanding iis that all the assets were sold to PP(1995) for 1 pound THE SNU HAS NO RIGHT TO RE ALLOCATE ASSETS.

My understanding is that the STF handed it over to the SNU. Psychic Press Ltd was insolvent so the SNU set up a new company called Psychic Press (1995) Ltd.

Maybe, as ever, you are suggesting better and more correct information from inside sources if so cough up and tell all.

I am not suggesting anything from either inside or outside sources.

I am, sadly, an expert in many of these legal/liquidation aspects and the SNU had no right, having acquired the sole asset of value, to pocket it. Its just like pocketing the one year 28,000 pounds profit, so no reserves were available for bad years .

Lets be honest the NEC and therefore the SNU are a disgrace in this matter.

If you disagree stop sitting on the fence, its quite sharp, and tell us why with teh facts that support it.

I am not sitting on any fence. Eric Hatton did not think six months was feasible never mind two years yet the SNU supported PN for fifteen years!

Come on Z speak up, speak out, where are you really on this matter let people know, get an interview with Tony Ortzen and make you position clear.

I wasn’t aware that people are particularly interested in my views. I simply think that both sides should be heard. Audi alteram partem. Also it has nothing to with Tony Ortzen so why drag his name into it?
Like you and Lis I am not a member of the SNU but I have held a number of positions in the SNU in the past. Nevertheless, I have no axe to grind as I am not one of their creditors but I felt it important to highlight some of the inconsistencies in the reports between the STF and the SNU.

Actually Z I had already pointed that discrepancy out, of course if the SNU succeed in liquidatioin without this being tested then the whole issue is immaterial. If you had read my comment you would understand that I believe testing this one point is vital to a fair liquidation of PP (1995)

If the SNU are wrong with their claim then they are basically grabbing the only assets that have any value and in a manner which is not legal. Selling the Masthead and Archives would see the Liquidator paid and maybe creditors get a proportion of their money back. Heck at some point the Staff may get something for the way they have been treated.

This is a a vital test which, it appears, the NEC have been seeking to avoid.

I also point out that none of this precludes the Liquidators right to take seperate action to pursue the PP Directors and probably the NEC, who have acted in a quasi Directorial role since May 22, for insolvent trading.

I think the NEC have every chance to present their case about PP's closure but they do not want to address the people who they have most damaged...Their staff.

The case against their behaviour is pretty water tight. Whether they really were given the assets is, quite rightly, something that should be tested before the liquidation.

I am certain that, if the STF have proof to the contarary of the SNU claim, then they will ensure it is provided to the correct authorities, i.e the Liquidator and CIB, to act upon without dragging it onto an internet forum to declare their hand.

The SNU supported it for 15 years, well I imagine they were very pleased to pocket the nice profit of $28,000 that accrued in year 4. It would be interesting to analyse the extent of that support they gave.

Eric Hatton may not have thought it would last 6 months but as a result of that he prevented the SNU acting directly. PP cost them nothing, when they could no longer support it they should have let it pass on to the next baton carrier.


Jim