Home of Choice to enter administration
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Home of Choice has filed for administration with the High Court after takeover talks collapsed.
In a statement today, the mortgage network reveals that it will have to appoint administrators after it could not secure an extension of overdraft facilities and an acquisition deal fell through at the last moment.
The statement says: “It is with enormous regret that the board of Home of Choice announces that it has filed with the High Court a notice of its intention to appoint administrators.
“Over the past few months we have been working towards selling the company. We believed that having a fresh injection of capital would allow HOC to enhance broker services and grow the business. We were delighted that several offers were made to purchase the company during this process and a preferred bidder was identified.
“We were convinced by assurances from an investor and our bank, that broker and staff payments, although delayed, could be made on Monday April 26. Although the FSA granted a change of control to the investor on Thursday April 22, talks collapsed at the last moment.
“This week we have continued talks for the sale of the company with other investors.
“However, we have not been able to secure an extension of our overdraft facility to cover the payment due to brokers and staff.
“Despite working our way through 2009 and placing the business in a position to be bought by a number of financial services groups, it has been impossible to complete the arrangements.”
The network says an administrator will be announced later today and it says it will work with them to ensure the best possible outcome for brokers and staff.
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Readers' comments (15)
Exasperated me | 29 Apr 2010 11:59 am
More for the FSCS?
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Jay | 29 Apr 2010 12:10 pm
Another one bites the dust! Poor brokers going to get stiffed once again. When will anyone protect us?
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Anonymous | 29 Apr 2010 12:46 pm
We nearly joined them four weeks ago and were totally misled by one of the regional directors - good job we didn't.
Membership of a network must be questionable - maybe directly authorised is best!
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Simon Kershaw | 29 Apr 2010 12:50 pm
Every time a network tells it's brokers that missed payments are down to a systems failure we know it's titsup time.
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Lewis Greene | 29 Apr 2010 12:54 pm
Yes another one bites the dust, when is the economy ever going to recover? All I ever see our more companies failing by the week due to lack of lending.
Lending is so tight it’s just ridiculous to get any funds to prop companies up in these very difficult times.
Lewis Greene
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Anonymous | 29 Apr 2010 1:10 pm
What baffles me is that in November 2009 announced last published accounts for the network for the year ended March 31, 2009 showed a £6.8 million profit, just wonder if directors pocketed huge dividends instead of reducing debts.
If the FSCS has to pay compensation they should be looking at the accounts and asking questions. Directors should be held accountable for the loss of income owed to advisers.
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Anonymous | 29 Apr 2010 1:15 pm
It's obvious that the FSA 'network' model doesn't work. Rather than giving us a compliance mechanism that works, the FSA has given us a costly regime that stifles growth and innovation. Highly regulates brokers and virtually turns a blind eye to the banks. Their treatment of brokers in this position will be awful, and they will find changing to another network difficult and costly, with income lost.
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Anonymous | 29 Apr 2010 1:34 pm
Re - Anonymous | 29 Apr 2010 1:10 pm
Surely not the MUCH TRUSTED directors pocketing huge dividends?
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Chris Birchall | 29 Apr 2010 1:37 pm
Yet again the brokers are the ones who will suffer. I do not know what the mechanics are of what happens with the money within a network but why are the commissions from lenders and life companies not ring-fenced, like client money? Only their percentage split belongs to them and if their business model is sound then they should be able to cover their costs, overheads and any borrowings from those monies. This money does not belong to them. the brokers are not employed by them. The FSA needs to address this as this will put more brokers out of business, yet again through no fault of their own. Very interesting to see the HOC declared profits of 6.8 million. It will also be interesting to see how much the Directors have taken in the last 12 months and I assume all staff have been paid up to date - with brokers money.
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Anonymous | 29 Apr 2010 3:10 pm
Chris you assume incorrectly. It's not just the "poor" brokers that haven't been paid it is also all the staff.
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