07 March 2013
Carey Olsen legal expertise assists in HMV rescue plan
Selected by HMV Group plc., Carey Olsen lawyers successfully represented the group in its application before the Royal Court of Guernsey for an administration order in respect of HMV Guernsey Limited on Tuesday, 6 March 2013 as part of a wider plan to save the retail group.
HMV Guernsey is one of the guarantors of a £127.2 million debt owed by the parent company to a syndicate of lenders including the Royal Bank of Scotland plc.
The Carey Olsen advisory team was led by litigation partner Tim Corfield and included Elaine Gray, Tony Lane, David Jones, Tim Bamford, and Jamie Oldfield, who worked with HMV Group plc's English lawyers, Linklaters LLP, to demonstrate the case for unifying the position of HMV Guernsey with the UK HMV group companies. The court order means that Nick Edwards and Rick Garrard, the independent, court-appointed officers from Deloitte LLP in London and Guernsey, will bring their retail restructuring expertise to bear in the plan for a strategic rescue of the company and the group as a going concern.
Advocate Corfield said, "It has taken some time to establish that the Guernsey store, operated through HMV Guernsey Limited, has the potential to be a trading, profitable part of the overall HMV group strategy to rescue the business of that group as a going concern.
“With Hilco's acquisition of the debts of the HMV group, it was imperative to bring HMV Guernsey Limited, which has been geographically and economically on the periphery of the recent affairs affecting the group, into the fold so that it may be counted among the potentially profitable and important aspects of a wider restructuring and rescue strategy".
HMV Guernsey recorded revenue of £7.1 million and profits of £56,000 for the 39-week trading period to 26 January 2013, and continues to trade, however a total net equity liability to its parent company of £4.3 million for its Guernsey-based fulfilment operation which closed last year, along with the guarantee call in the sum of £127.2 million, left the Guernsey company insolvent.