Eddisons Insolvency Support And Value Recovery

Insolvency Support and Value RecoveryMark Downham, Valuation Services

The Company

• Leading firm of Chartered Surveyors• Independently owned• Established since 1834• Operate Nationally and Internationally• Employ over 200 staff

The Service Solution

• Multi-Disciplinary firm providing a full service range including:– Sale and Letting of Commercial Property and Land

– Property Auctions

– Valuation and Sale of Machinery and Business Assets

– ‘Good Book’ and ‘Distressed Book’ Bank Valuation Advice

– Restructuring, Insolvency Support, Asset Management and Agency

– Commercial and Residential Property and Facilities Management

– Building Consultancy Advice

– Plant and Machinery Asset Lending and Recovery Advice

– Rating Appeals

– Landlord and Tenant Negotiation and Advice

– Planning Consultancy

The Coverage

• Eight offices located throughout the UK:

– Leeds– London– Manchester– Birmingham– Bradford– Bristol– Glasgow– Huddersfield

• Operations established on behalf of clients in several European Countries and the Middle East Region

Centralised Co-ordination of Insolvency Support and Value Recovery

• Central Contact Points at Director Level• Simplified Instruction Procedure• Competitive Fee Structure• Technical Register of Sector Expertise• Banking and Corporate Advisory, Insolvency Support,

Work-Out’ and Value Recovery Specialists• Dedicated Client Contact Managers• Rapid Mobilisation of Resources• Flexible Service Packages

Eddisons Insolvency Support and Value Recovery

• Dedicated Insolvency Support and Value Recovery Group• Business Turnaround and Debt Restructuring Solutions• NARA Registered • R3/ABRP Registered• Specialists in Distressed Asset and Real Estate Lending,

Restructuring, Impaired Real Estate ‘Work-Out’, Insolvency, Administration and Receivership Procedures

• Senior Insolvency Support and Value Recovery Team• Experienced in Asset Management, Valuation, Agency and Debt

Recovery• Wide Range of Specialist Services• National Geographical Coverage

What is Insolvency Support and Value Recovery?

• Insolvency Support and Value Recovery is the application of Asset Management Techniques to Debt Recovery Solutions

• The Insolvency Support and Value Recovery Team advise Clients on the Best Debt Recovery Solutions i.e. Mortgagees, Banks, Building Societies, Lending Institutions, Insolvency Practitioners, Administrators and Liquidators

• The Team work with Clients to draft Value Recovery Plans• Insolvency Support and Value Recovery Plans scope the Debt

Recovery Solution:– Loan Restructuring and ‘Work-Out’?

– Rescue and Turnaround?

– Insolvency Support?

– Managed Sale and Disposal?

Insolvency Support and Value Recovery – Our Approach

Recovery Objectives

Valuation and Strategic Advice

Disposal

Property Auctions

Agency Private Treaty

Machinery and Business Assets -

•Online Auction•Private Treaty•Tender

Consultancy

Project Management

Build Out Management

Dilapidations Negotiation

Lease Negotiation

Rating Reduction

Planning Advice

Ongoing Management

Commercial and Residential Property -

•Rent Collection•Management•Leasing

Turnaround

Turnaround & Workout

Insolvency Support

Corporate Restructuring and Reorganisation

Asset Management

Value Recovery

LPA (Fixed Charge) Receiverships

Insolvency Support and Value Recovery – Salient Points

• Identify and Understand Client Value Recovery Objectives• Advise Clients on the Best Value Recovery Solution• Agree Client Brief and Best Instrument of Appointment• Work closely with Clients on Value Recovery Plan• Appoint Director as Client Liaison and Case Manager

Insolvency Support and Value Recovery – Salient Points

• Draft Dedicated Value Recovery Plan with:– Agreed Action Points

– Timescales and Horizon for Resolution

– Service Deliverables and Outputs

• Co-ordinate Professional Advisory Team• Manage Specialist Support Services and Advice• Review Value Recovery Strategy and Asset Management Plan

with Client• Achieve Value Recovery Solution and Case Resolution

Insolvency Support and Value Recovery – Case Studies

• LEXI Holdings plc (In Administration)

• Bridging finance company providing loans to residential and commercial property buyers.

• Instructed by the Joint Administrators to assist in both the management and disposal of the company’s property assets.

• Services provided include initial valuation and strategy advice, disposal of the property assets through both auction and private treaty sales plus property management services for rent collection where an income was being generated.

• Eddisons also provided retrospective valuations for properties where the administrators wished to pursue a negligence claim against valuers previously engaged by the company.


• David McLean Homes (In Administration)

• House builder located throughout the UK. Audit clients of KPMG, the company was funded by Barclays, RBS and HBOS. David Costley-Wood was providing advice to Barclays pre-administration. Total debt c£75m.

• Company went into Administration with Deloitte, Savills provided strategy and valuation advice which advocated the mothballing off all part built sites and sales by auction.

• Barclays did not agree with the proposed strategy and engaged Eddisons to value the portfolio of 30 sites throughout the country in 10 days to support a proposed buyout of the two other funders and also to advise on sale forecasts prepared by a potential New Co. Barclays funded new co, known as Elan Homes, buying out the debt of RBS and HBOS.


• Hurstwood Developments Limited (In Administration)

• Development company located in the North West of England. Instructed by the Joint Administrators to assist in the management and disposal of the property and construction plant and materials owned by the company.

• Initial valuation and strategy advice was provided for both the property and plant assets.

• The construction plant was located at various sites. In order to maximise value and in the interests of security, Eddisons organised the removal of all plant to one secure location and sold it over our webcast auction facility. The principal property assets mainly comprised partially built development sites. A number of properties were sold through both private treaty and auction sales.

• Eddisons undertook all necessary due diligence to complete the development and are currently project managing the build for the Joint Administrators.


• Leeds United Association Football Club Limited

(In Administration)

• Both our Machinery and Business Assets and Property Valuation and Insolvency departments were Instructed by the Joint Administrators of the football club.

• At short notice a valuation of the company’s chattel assets was prepared by our Machinery and Business Assets team pre-administration for a proposed ‘pre-pack’ sale of the company and its assets.

• Valuation advice was also prepared for the club’s leasehold property interests.

What is the relationship of Asset Management to Insolvency Support and Value Recovery?

• Asset Management is a combination of Value Creation and Cost Containment in driving the performance of Property Assets through the use of Value Recovery Plans in implementing Debt Recovery Solutions

• Understanding the differences between the Investment Development and Occupancy Markets is the key determinant in effective Asset Management

• Asset Management Strategies are set out and captured in Value Recovery Plans which are agreed with the Client for all Assets under Management and all agreed actions are recorded in an Asset Register

Asset Management and Investment

• The Investment Market links Asset Management to Income Stream and Cashflow Manipulation and potential for Income Growth and Capital Growth through ‘Value Enhancement’ initiatives

• Asset Management means intensive Income Stream and Cashflow Management i.e. Rent Reviews, Lease Renewals, Marriage Values, Lease Restructuring/’tenant engineering’, Planning Gain, Refurbishment, Redevelopment, Leasing through careful planning, implementation and asset tracking to achieve enhanced investment returns

• Value is linked to Income and Capital Growth through intensive Asset and Property Management i.e. Rent Collection, Facilities Management, Tenant Satisfaction

Asset Management and Development

• The Development Market links Asset Management to Opportunity Cost vs Risk Driven Returns

• Asset Management means Understanding the Consumer/’end user’ Market and Development Cost Management

• Asset Management sensitivities are the GDV (Gross Development Value) and Construction Cost volatilities

• Key Value Recovery Criterion is ‘Loan Structuring’ linked to Project Monitoring and assessment of Customer Competence – the Real Measure of the Resilience of the Asset Management brief is the ability to translate the completed Development into an Income producing Investment or Owner Occupancy Sales to recover Capital outlay and make a Profit

Asset Management and Occupancy

• The Owner Occupancy and Leased Occupancy Markets have a different approach to Asset Management to the Investment and Development Markets

• Operational Asset Management means Occupancy Cost Management and Occupancy Cost Recovery

• Value is linked to Business and Utility Value not Income and Cashflow manipulation to create Investment Value – Occupancy and Leasing Management

• Property is seen as a functional element of the Business • Not a strategic investment – cost is the primary determinant• Surplus land and Buildings – Corporate Real Estate Scenarios

and ‘Capital Release’ Asset Management – Leasing, Planning Gain, Redevelopment, Sales

Machinery and Business Assets

Machinery and Business Assets

• Team of dedicated expert surveyors covering the UK

• Undertake valuation and disposal of variety of assets• Work in conjunction with Property team

• Provide valuation of assets for negotiation as part of a ‘pre-pack’ or with interested parties as a complete sale of business

• Undertake complete break up disposal route where required

• Disposal via– Private Treaty negotiations– Online auction

• Online auction system integrated within eddisons.com website– Transparent system– Thousands of registered bidders– Advertising and email campaigns– Online credit/debit card payment system– Excellent realisations

Valuation

Eddisons - The Complete Valuation Service

• Secured Lending• Value Recovery• Company Annual Accounts• Asset Management• Project Management• Development Monitoring• Other Purposes

– Probate

– Tax

– Operational Entities

‘Added Value’

• Comprehensive Valuation Report• Use Circle Visual Investor and

Circle Developer Valuation Software where appropriate• Willingness to discuss propositions• Able to provide ‘Desktop’ Appraisals• Reciprocal business opportunities

Valuation Methodology

Specific Comments and Comparable Evidence • Overview of economy• Overview of Local Property Market and in particular Sector of

subject property• Local rents • Comparables to justify valuation

Valuation• Market Value• Market Rent• Others as requested • Special Assumptions

What to look for when reading a Valuation Report

• Addressed to the Bank• Correct address for the property• Comparables – valuation is on a firm basis• Valuation – vacant possession or leased, if latter has the Valuer

seen the lease?• Special Assumptions• Condition of property/ state of repair• Planning – used for the right activity ?• Site Plan in valuation agrees with land registry plan (Securities

Dept?)

Development Monitoring

Development Monitoring

• NOT full monitoring by QS• Practical overview• Suitable for compact schemes of traditional construction• The developer is aware of supervision• Confirm that Health & Safety in place• Planning consent and Building Regulations• NHBC or similar involved• Pre agree building stages• Be aware of ‘front loading’

Development Monitoring and Build Out

Borrower co-operating• Practical overview• The developer retained under close supervision• Confirm that Health & Safety in place• Planning consent and Building Regulations• NHBC or similar kept involved

Borrower un-cooperative• Take control of site and full project management• Full building surveyor involvement

Property Management

Property Management

Residential Property• Rent Collection• Service Charge management• Compliance with legislation and regulations• Renewal of agreements• Re-letting• Possession proceedings• Payment of monies to LPA (Fixed Charge) Receiver / Bank• Sale of vacant units

Property Management

Commercial Property• Rent collection• Service Charge management• Compliance with legislation and regulations• Rent Reviews• Renewal of leases• Re-letting• Possession proceedings• Payment of monies to LPA Receiver / Bank