BikeBiz Bicycle and cycling retail news
[Uploaded to BikeBiz.co.uk on 2nd October]
And today both the ‘Mail on Sunday’ and ‘BicycleBusiness’ will be sharing Derby/Lenark anecdotes at the creditor’s meeting due to start at noon in Birmingham.
‘Financial Mail’ carried two high-profile pieces on the Sturmey collapse, including half of Lisa Buckingham’s weekly column.
Much of the main story concentrated on the expected investigation of the Derby/Lenark deal by the DTI. This news was carried on this site last week so there’s no need to run the ‘Mail’ articles whole but here are the edited highlights:
‘[In any DTI investigation] the role of Sturmey Archer’s former owner, the US-based Derby Cycle Corporation, is also likely to be examined as the Nottingham firm’s collapse comes less than 14 weeks after the business was sold to Lenark.’
‘Tony Murphy of insolvency expert Smith & Williamson, who has been advising Sturmey Archer’s directors said: ‘I would welcome a full investigation. The question needs to be asked is why has Lenark done what it has.’
‘Though Lenark and its officers were unavailable for comment, one person sympathetic to the company said: ‘Lenark might not have been able to inject the necessary cash but you’ve got to ask why the business went bust in just 14 weeks after Derby sold it.’
Er, indeed.
And, here’s edited extracts from Lisa Buckingham’s comment piece, headlined ‘Wheels fall off as the cycle of failure goes on’.
Whilst mostly questioning the business competence – or illegal intent – of Lenark, she also rounds on Derby, pointing out that Derby was under no legal obligation to sell to a pukka outfit but that it should have relied more heavily on the easily retrievable financial warning signs that Derby’s legal advisers on the Lenark deal – Wragge & Co. must have given and which, one presumes, Derby CEO and president Gary Matthews chose to ignore (perhaps because a fleetingly healthy Lenark bank statement was waved in from of him?). She writes:
‘Derby Cycle Corporation…which sold Sturmey-Archer for £30 (having earlier netted £4 million from selling the freehold on its factory, was under no legal obligation to carry out detailed checks into the credentials of the buyer, Lenark.
However, adds Buckingham: ‘The most superficial of enquiries should have revealed that Lenark was in a parlous financial state and implicated in a catalogue of corporate failures.’
What Derby could never have known (although there were many signs that it would be the case) and here the power of the national press comes into play, Lisa Buckingham reveals that last week’s coverage in the ‘Mail’ led to many people coming forward with sorry sales about business involvements with Lenark executives over a 20 year period.
There will be further Sturmey Archer/Lenark/Derby coverage in next week’s paper.
