Emergency Government Funding Too Late to Prevent Two Venues in Hull Closing
Hugh Jesseman. Licensed Insolvency Practitiones at the London headquarter’s of Antony Batty and Company LLP, wsd appointed joint administrators of VMS Live (2011) limited and VMS Live (Venues) Limited, on 15th July 2020. Two of VMS’s popular venues in Hull, The Welly and The Polar Bear have already closed, with the Coronavirus lockdown playing a significant part in the decision, which puts 20 jobs at risk. With other internal financial issues, the emergency Government funding for small music venues in England, announced on 25th July, came too late to avoid the administration.
The Background to the Administration
The Coronavirus lockdown, which started on 23rd March 2020, hit the live music and entertainment sector hard, with all revenue almost totally and immediately wiped out.
Along with many other economic and financial support measures, the Government announced a £1.57 billion support package for the culture industry sector on 5th July, to cover: theatres, galleries, museums, independent cinemas, heritage sites and music venues.
This support package comprised a mixture of grants and loans and, according to Boris Johnson, “will help safeguard the sector for future generations, ensuring arts groups and venues across the UK can stay afloat”. Whilst the package was welcomed, Oliver Dowden, the Culture Secretary pointed out that the money would aim to preserve the ‘Crown Jewels’ of the industry, but went on to say:
“Sadly, not everyone is going to be able to survive and not every job is going to be protected, and, I will have to be honest with you, of course we will see further redundancies.”
For smaller music venues, like The Welly and The Polar Bear, the Government announced on 25th July that £2.25m of emergency Government funding (from the £1.57 billion) was being shared by up to 150 small music venues in England, in the form of grants, to help stop them ‘going to the wall after 4 months with no gigs.’
The grants averaged out at £15,000 per venue, with this initial tranche of support money being targeted at those venues at “severe risk of insolvency”, and could be spent on ongoing costs like rent, utilities, maintenance contracts and other bills.
However, the support package came too late for VMS to avoid administration and, in particular, for The Welly and The Polar Bear, to avoid closure. As the Chief Executive of VMS, Bert Van Horck said:
“I am deeply saddened that we had to make this decision, following the completion of the yearly accounts, the announcements of the government and the bank reconciliation, which lead us to be at immediate risk of trading whilst insolvent.”
The result, of course, was our appointment as Joint Administrators.
We are working to preserve the value of the venues in administration
Commenting on the insolvency of the two venues, The Music Venues Trust said:
“We have been warning for months that the situation faced by grassroots music venues was unsustainable and would result in the closure of spaces people love and artists need unless there was concerted, strategic action. That action now needs to be accelerated to prevent hundreds of other venues from being lost right across the country.”
As insolvency practitioners, our aim is to save businesses, as far as possible, and the administration process is used when at least a part of an insolvent business can be sold or salvaged, which in turn can save jobs, of which 20 are at risk across the two venues. Click here to see our easy to follow ‘guide to the administration process.’
Neil Barry Senior Manager at Antony Batty said:
“The Polar Bear is not trading now, but we are looking for suitable offers for it. In addition, any legal interest we have in the assets of The Welly and The Polar Bear will be seriously examined, so that we can preserve the value of these venues (as best we can), and obtain the best outcome for creditors of the 2 venues.”
Contact us for more about Company Administration
We are experienced administrators at Antony Batty and Company across our offices – Central London, Brentwood, Salisbury and Bournemouth. We have a strong track record of increasing realisations for the benefit of creditors and have also used the procedure to rescue several companies which have subsequently successfully exited Administration. This latter point is of particular importance in the current Covid-19 post lockdown climate when many businesses, through no fault of their own, are facing potentially existential financial difficulties. Click here to see some of our administration testimonials.
If your company is in financial difficulties, or you are acting for one, and would like to find out more about the administration procedure, please contact your nearest office. An initial chat is complimentary.
