WIREDGOV

£2.7million franchise group shut down

INSOLVENCY SERVICE News Release issued by The Government News Network on 22 November 2007

A group of companies based in Exeter called Key Edge that sold locksmith and plumbing franchises countrywide has been wound up in the High Court in the public interest following an investigation by Companies Investigation Branch (CIB). Some 250 people invested franchise fees totaling £2.7 million

The investigation found that franchisees were misled by false and misleading statements about the level of training, support and potential earnings. Also that support under the Government's Small Firms Loan Guarantee Scheme of £150,000 to finance the development of a national 24 hour call centre was applied instead to a significant extent for the directors' own benefit.

In ordering the companies into compulsory liquidation Registrar Christine Derrett said:

"I am satisfied that it is appropriate in each of the three cases to make the usual compulsory order".

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Notes for editors:

1. Key Edge Limited was incorporated on 31 August 1999. Its registered office is at 5 Theobald Court, Theobald Street, Borehamwood, Hertfordshire, WD6 4RN, the address of accountants. The directors of the company are Julian Lloyd Bennellick and Christopher Davison (who is also company secretary). On 9 May 2007 the company entered into a Company Voluntary Arrangement appointing Mr Asher Miller of Pearl Assurance House, 319 Ballards Lane, London, N12 8LY to deal with its creditors.

2. Key Edge Plumbing Limited was incorporated on 18 September 2003. Its registered office is at 5 Theobald Court, Theobald Street, Borehamwood, Herfordshire, WD6 4RN, the address of accountants. The directors of the company are Julian Lloyd Bennellick (who is also company secretary) and Christopher Davison.

3. Key Edge Group Limited was incorporated on 23 March 2005. Its registered office is at 5 Theobald Court, Theobald Street, Borehamwood, Hertfordshire, WD6 4RN, the address of accountants. The directors of the company are Julian Lloyd Bennellick (who is also company secretary) and Christopher Davison.

4. The petitions to wind up the three companies in the public interest were presented on 14 August 2007 under the provisions of section 124A of the Insolvency Act 1986 following enquiries carried out by CIB under the provisions of section 447 of the Companies Act 1985.

5. The companies were all ordered into compulsory liquidation on 21 November 2007.

6. Companies Investigation Branch, part of the Insolvency Service, carries out confidential enquiries on behalf of the Secretary of State for Business, Enterprise & Regulatory Reform (BERR).

7. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice.

8. All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit, 21 Bloomsbury Street, London, WC1B 3SS, Tel No: 020 7637 1110. Email: piu.or@insolvency.gsi.gov.uk

Further information about the work of The Insolvency Service is available from http://www.insolvency.gov.uk