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KPMG faces protest over franchise collapse

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23rd Sep 2010
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KPMG’s Liverpool office was the site of a spirited protest this week by a local shop owner who says the firm denied him of thousands of pounds.

Holding a sign that said “KPMG stole my shop,” William McCarthy began a one-man protest against the group, which acted as administrator after the collapse of retail chain First Quench.

McCarthy agreed to sell his Threshers franchise store back to First Quench last year for £31,000, but when the company went into administration weeks later he was told he would not receive the money. He may now only receive 1p for every £1 he was owed, according to a report by the Liverpool Daily Post.

McCarthy said First Quench was already in talks with KPMG when it agreed to buy his store, and so is arguing that KPMG has an obligation to pay him the money in full.

Richard Fleming, UK head of restructuring at KPMG and First Quench’s joint administrator, said: “We are aware of the reason for Mr McCarthy’s protest and his claim against First Quench Retailing (FQR).

“Since FQR went into administration last October, we have fully explained the legal position and although we sympathise with his situation, we are bound by the law relating to how we are obliged to deal with the claims of unsecured creditors, of which Mr McCarthy is one.

“This means that all unsecured creditors must be treated equally, regardless of their situation.”

First Quench had 6,500 employees across the UK but was hit hard at the end of last year following increased competition from supermarkets. The company, which owned Wine Rack, the Local and Haddows stores suffered a stick crisis in 2009 after credit insurers reduced their cover to drinks suppliers and went into administration at the end of the year.

 

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By mikewhit
23rd Sep 2010 18:04

Obligation

"I am not a lawyer" but I would have thought that First Quench would have had a duty of disclosure about pending liquidation. There should perhaps have been (is ?)  a clause in the contract of sale about these matters.

The shop holder's assets were obtained under false pretences; surely the sale can only be said to have been sold if the transaction was completed ?

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By Albert Camus
23rd Sep 2010 19:05

Good luck to Mr McCarthy

As someone who has been ripped off to the tune of almost £850,000 by a firm of chartered accountants, I know exactly what line of legalese BS will have been fed to Mr McCarthy by KMPG and how they will wriggle and squirm every which way to avoid making any payments they can get away with.

I also know the wall of silence Mr McCarthy will be greeted with if he tries to take this to the ICAEW and the barriers that will be thrown in his path should he seek redress through the Courts.

Albert Camus

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By Trevor Scott
23rd Sep 2010 19:57

I would see the lawyer

...it sounds as though we are only being told part of the story.

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