Fairpoint CEO sacked as administrators begin salvage operation
The chief executive of IVA provider Fairpoint has left the company, as administrators undertake plans to salvage the business.
Sandy Kinninmonth, Lindsey Cooper, and Gareth Harris, of RSM Restructuring Advisory, have been appointed as joint administrators to Fairpoint Group plc and, as a result, chief executive David Broadbent has left the board immediately.
A statement from Fairpoint said the directors intend to continue to work with the administrators to try to “preserve any remaining stakeholder value”. Fairpoint added that RSM’s appointment will also have “no material impact” on plans to sell its IVA business – Debt Free Direct – and claims divisions to a third party.
The suspension of trading in Fairpoint’s shares on AIM remains in place and the company’s nominated board advisers have resigned with immediate effect. With the board’s mutual agreement, Shore Capital and Corporate has resigned as an adviser and Shore Capital Stockbrokers has also resigned as a broker to the firm.
If a replacement adviser is not appointed within one month, the admission of the company’s securities will be cancelled on AIM. Fairpoint said it has no current intention of appointing a replacement adviser.
While Fairpoint is no longer trading, its legal arm Simpson Millar and subsidiary companies will continue to trade as going concerns through a dedicated funding line provided by Doorway Capital.
A statement from the group said the appointment of administrators “will have no impact on the day to day running of these businesses”.
The statement added that the client services Simpson Millar provides and the protections its clients’ enjoy are “not in any way affected by the appointment of administrators” to the group.
Fairpoint announced its intention earlier in August to appoint administrators.