Inside the world of business
Slate wiped clean for Fleming
IN CONTRAST to what seems likely to happen with Seán Quinn, former developer John Fleming got through his bankruptcy quickly and quietly.
Southend County Court in England discharged Fleming on Thursday, a year to the day after it declared him bankrupt in a hearing initiated by himself.
Fleming now has a clean sheet. His former creditors have no call over him.
But the sheet is clean in more ways than one, as it emerged yesterday that virtually all his personal assets were swept into the process, including his home, personal investments, properties, and even a number of family trusts.
All his secured creditors, including the Irish banks, agreed to the process.
None of them can pursue him for any debts that pre-dated Thursday or were linked to the Fleming group property and construction empire he ran until midway through 2009.
It also means that State assets agency, Nama, which acquired some of the Fleming group’s property loans, cannot go after him for any shortfall between what it realises from assets underpinning the debts, and the total amounts due.
In most cases where Nama sells properties at a price that does not cover the full amount of the debt, it is open to the agency to pursue the borrower for the balance, but it cannot do so in Fleming’s case. This is because, by the time Nama took over the loans, the properties were already in the hands of receivers and the group was in liquidation.
Fleming himself was no longer in control of his group, which, in any case, no longer owned any of the assets involved, as they had been passed to the banks.
Given that he has emerged with nothing but a clean sheet from the process, it is hard to argue that he got off lightly, but then, neither did his secured or unsecured creditors.
The Government will publish details of its public service reform programme on Thursday.
Album sales music to record industry's ears
IT HAS become accepted wisdom that record labels are unable to cope with the age of music piracy and face a perilous future. But like Louis Walsh's fondness for telling X Factorcontestants that they've "got the whole package", this is a cliche that doesn't quite tell the whole story.
Universal Music Group, owned by the Paris-based media conglomerate Vivendi, has fended off rival Warner Music, to buy the recorded music division of EMI. The label is currently under the control of Citigroup.
For £1.2 billion, Universal has not got the whole of EMI, but that part which includes a roster of artists such as Coldplay, Katy Perry and, most importantly, the profits banker, the Beatles.
EMI’s publishing arm seems set to go to either Sony or BMG Rights Management.
The interest from the music majors in the indebted carcass of EMI is far from senseless. For Universal, already the world’s largest recorded music company, there will be massive economies of scale – provided it can get the deal past regulators.
As legal music-streaming services such as Spotify and Apple’s iTunes help record labels offset the effect of plunging CD sales, investors have begun whistling a new tune on the industry. Album sales – including downloads – are up 3 per cent, according to Nielsen SoundScan figures.
“We might be getting close to the point where the decline, in the recorded side at least, is ending,” Ben Rumley, an analyst at London firm Enders Analysis, told Bloomberg.
In May, Napster founder Sean Parker, former scourge of the record labels, declared labels’ recorded music assets were “dramatically undervalued”.
The final chapter in EMI’s 114-year history may have been a sorry one, but the prospects for the music business aren’t entirely downbeat.
Bord
Gáis tender shines light on potential issues
THE POSSIBILITY of a conflict of interest has meant that Laurence Shields, founder and chairman of the Dublin law firm LK Shields, has had to sit out the evaluation of bids for a €400 million-plus contract about to be awarded by Bord Gáis.
The irony is that Shields, appointed a Bord Gáis director in June 2009, is chairman of the sub-committee evaluating the bids, which will make a final recommendation to the full board. One of the bidders, the consortium Balfour Beatty CLG Ltd, has its registered address at LK Shields’s offices in Dublin and makes use of its services. The consortium, comprising UK multinational Balfour Beatty and the Irish operation CLG, is reported to be the preferred bid in the tender process.
The bids for the multi-year contract are being evaluated by the investment and infrastructure committee of the gas company’s board, although the final decision rests with the entire board.
A spokesman for Bord Gáis said Mr Shields had, from the outset, declared his interest in the matter and had absented himself entirely from all consideration and deliberation on the matter. He said Mr Shields’s actions in the matter were entirely in compliance with the Bord Gáis code of conduct.
The winning bid will supply construction, renovation and maintenance services to the Bord Gáis network, services that up to now were provided by a number of contractors. Mr Shields’s position illustrates the problems that can arise when members of prominent professional services firms act as non-executive directors of large State companies.
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