Rachael Singh, Accountancy Age, Monday 14 June 2010 at 12:00:00

Stanford insolvency adds to firm's woes, in the lead up to AIM tradingsuspension


The firm has had a tough year in the lead up to this morning's announcementof trading suspension on the AIM market.

A statement accompanying the announcement said, "although discussionscontinue in relation to the disposal of certain of the company's assets as wellas with both potential new investors and its debt providers, it can no longer becertain that it will continue to have sufficient funding to enable it tocontinue to trade on a going concern basis."

This is the latest blow for the firm which has had a tough star to the year.The firm suffered cash flow problems following its appointment asjoint-liquidator for Texan, Allen Stanford.

Auditors, Ernst & Young, issued a going concern in February when the firmreleased its interim results. The statement warned that uncertainties fromreceiving funds from the Stanford case, combined with cash flow and costreduction initiatives, put doubt on its ability to continue.

Last week, liquidators from Vantis, working on the Stanford case, wereremoved by the Antiguan courts, while the firm appeals the decision.

The high court of Antigua decided Vantis' Nigel Hamilton-Smith and PeterWastell, joint liquidators of Stanford, should be removed from office andalternative liquidators appointed.

Earlier this month, the firm also announced discussions with potentialinvestors to restructure its debt.

At the time the firm told the stock exchange it is negotiating with potentialinvestors and entering preliminary discussions with debt providers aboutpotential restructuring of the balance sheet.

Further reading:

Antiguacourt seeks to remove Vantis from Stanford liquidation

Vantislooks to restructure to reduce debt burden
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</br>Stanford causes Vantis going concern threat