Stone boss Simon Harbridge has moved to "set the record straight" about the future of Stone Group as the administration for Stone Bidco is referred to the High Court, escalating the war of words between the current CEO and his predecessor James Bird.
In a meeting yesterday, creditors failed to agree to approve the proposals to liquidate the company. The majority of creditors voted in favour of them, but "unconnected investors" – those who are not currently directors or owners, including former CEO James Bird – vetoed the decision, meaning it is now referred to the High Court via a Paragraph 55 application. The application will take place in the next 10 days and a date at the High Court will be set thereafter.
Harbridge (pictured) and the administrator – John Whitfield of Duff & Phelps – have insisted that Stone Computers Limited remains "totally unaffected" by the process and believe it to be likely a judge will approve the proposals. But Bird, who is a creditor of Stone Bidco, said this is "preposterous" and vowed to continue his quest to get his cash even if the High Court rules that the current proposals ought to go ahead.
Stone Bidco. a holding company associated with a 2008 MBO. was put into administration last month, as CRN exclusively revealed, to clear up the group's "unwieldy" balance sheet. Stone Computers, the company dealing with staff, customers and suppliers, remained unaffected by the changes, Harbridge insists.
He told CRN that any rumours to the contrary are untrue.
"The key point is... this [process] relates solely to Stone Bidco Limited," he said. "Stone Computers Limited – the trading subsidiary which deals with suppliers, customers and employees – is completely unconnected to this process. I cannot stress too highly that it is business as usual with Stone Computers. All their warranties continue to be supported for the long term by Stone Computers Limited. Everyone is being paid on time, as they always have been. There is no creditor, employee, or customer who is at any risk whatsoever. I am just concerned that there is no misunderstanding of the process.
"I think [rumours Stone Computers Limited could be put into administration as a result of the High Court case] are totally unfounded. It's factually and legally incorrect. It is so far from the truth to be almost damaging. It is totally incorrect. This is being stoked at the expense of customers and people who would be genuinely concerned, and rightly so, if it were the case. It is extremely unfortunate that somebody, for their own interests, is generating that sort of comment. I think it is important we put that record straight.
"Unfortunately, customers have this fed back to them from customers who read the press. While I can reassure them all here, we have over 5,000 customers, who all read these things. Also, our competitors in the industry are never slow in [talking about it]. It is a well-trodden sales tactic.
"I think [approving the current proposals] is highly likely. There isn't really an alternative. I think, to be fair, I don't know what the alternative is. I think it is highly unlikely [not to be approved] and there is no alternative. There are no funds in that company to do anything different. The process is being stymied. It is just creating fuss and bother."
John Whitfield concurred and described the High Court referral as a "pretty routine" process.
"We've started drafting an application to court to ask the judge for his directions," he said. "So either [he will] tell us what to do as administrators or say 'OK, the administration needs to finish and a liquidator needs to be appointed'. And that is what I think the High Court will do.
"This will have no impact whatsoever on Stone Computers Limited. Stone Computers Limited is a solvent company that employs 300 people which deals with its customers well, is growing in profitability and has paid all its creditors on time, as far as I am aware."
Concerns Stone Computers could be dragged into administration are "completely farcical," he said. "It won't happen. It can't happen."
Bird bites back
But Bird (pictured right) vehemently disagreed with the claims and said the fact the case is even going to the High Court proves it is not a run-of-the-mill process.
"If the process had have been as simple as they expected, the creditors' meeting would have been approved and it would have gone forward on 14 September [at the first meeting]," he said. "The fact is, these guys are in trouble because they haven't got the vote they need. It is not a normal scenario. The only reason they are going to the High Court is because the process is flawed. We are going to continue to challenge it legally for as long as it takes.
"Any creditors that have lost £10m in this process have a right to speak. They expect the creditors to roll over and lose £10m and walk away? I think not. It is nothing to do with trying to derail the process, it is about standing up for what is right.
"To that end, they have a problem. I will continue to challenge this [before the] court hearing, I will lobby the judge, and I will continue to challenge it post the court hearing.
"I am not going away."
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