Insolvency Service: Men’s magazine publisher closed down after Government investigation (revised 28 June 2010)

On Friday 25 June 2010, Sixty-Sixty Four Limited, a London based company that traded as a men’s magazine publisher was ordered into liquidation in the High Court on grounds of public interest following an investigation by Company Investigations, which is part of the Insolvency Service.

The investigation found that Sixty-Sixty Four Limited, trading as ‘UPstreet’, who produced two fashion and lifestyle magazines aimed at men (www.upstreet-magazine.co.uk) was operated by its directors with a lack of commercial probity, was insolvent and had owed money to at least eight employees and freelance journalists from 2008.

Commenting on the case, Company Investigations Supervisor, Chris Mayhew said;

“The evidence uncovered by this investigation discloses this was the third company used by the directors as a shield to protect themselves from the liabilities incurred in running a publishing business. Sixty-Sixty Four Limited was operated with cynical disregard for staff, contributors, photographers and journalists, many of whom remain unpaid.”

Gavin Knight a former editor of the magazine 'Palladium' obtained a judgement in the Brentford County Court against the company in February 2009 for £3,985. The company counterclaimed for £60,000 requesting an adjournment of the claim which was refused as no supporting evidence was presented.  Speaking after the High Court case Mr Knight said;

"It is good that justice has finally seen to be done for all the freelance journalists who wrote articles in good faith for these magazines, but remained unpaid.  It's tough enough out there making a living as a freelance journalist without having to pursue payment through the courts."

The first magazine “UPstreet”, with a claimed readership of 55,000, had previously been published both in French and English by two other related companies which subsequently failed (see Notes to Editors).  Although both earlier companies went into insolvent liquidation owing between them over £351,000, Sixty-Sixty Four Limited suggested in its business plan that no major creditors suffered losses as a result.

From May 2008 the company began publishing a second magazine in English called “Palladium” and according to the business plan Sixty-Sixty Four Limited held the copyright in respect of both magazines.

The company’s income was derived from subscriptions and from selling advertising space to well know designer brands such as Jean Paul Gaultier, Hermes, Hugo Boss, Lacoste, Levis Strauss, Prada, Puma and Kenzo.

The Insolvency Service investigation found that the company:-

·        was operated with a lack of commercial probity;

·        was insolvent;

·        provided misleading information to potential advertisers, funders and subscribers;

·        failed to maintain proper accounting records; and that

·        at least eight employees and freelance journalists to the magazines also went unpaid.

Notes to editors

1        Sixty-Sixty Four Limited was incorporated on 20 March 2007. Its registered office was recently changed from 92 Cromer Street, London, WC1H 8DD  to Suite 40, The Market Building, 191-195 High Street, Brentford, Middlesex, TW8 8LB. The directors of the company throughout were Mr Roger Stephane Dhelens and Mr Romain Dominique Ibanez. The secretary of the company until 1 October 2009 was Asiduus Limited.

2          The company’s business was creating and producing “niche” magazines for men in French and English. The magazine UPstreet was published in English and French and a further magazine Palladium was produced for the UK market. Both titles are said to have been published under licence from Mr Dhelens and Mr Ibanez.

3          The magazine UPstreet was initially published by Mr Dhelens and Mr Ibanez in France before it was launched in the UK by Upstreet International Limited (see 4 below). According to Mr Dhelens, Upstreet International Limited published both the French and UK versions and then Artwall Limited (see 5 below) began publishing both versions of UPstreet with the “consent” of Upstreet International Limited. Both companies were subsequently placed into liquidation owing substantial amounts to creditors.

4          Upstreet International Limited (in liquidation) was incorporated on 28 November 2000.  Its registered office prior to liquidation was at 107-111 Fleet Street, London, EC4A 2AB. The directors of the company were Mr Roger Stephane Dhelens (who was also company secretary from 27 May 2003 in succession to Ms Myriam Coupard) and Mr Romain Dominique Ibanez. The company was placed into Creditors Voluntary Liquidation on 4 September 2007 with no assets and a reported deficiency of £248,222.

5          Artwall Limited (in liquidation) was incorporated on 7 May 2003. Its registered office prior to liquidation was at 92 Cromer Street, London, WC1H 8DD. The directors of the company were Mr Roger Stephane Dhelens, Mrs Ariane Dhelens (until 30 October 2003) and Mr Romain Dominique Ibanez (from 20 March 2005). Mr Ibanez was also company secretary from 20 March 2005 in succession to Mr Jean Bernard Dhelens. The company was placed into Creditors Voluntary Liquidation on 4 September 2007 with no assets and a reported deficiency of £102,782.

6          On 4 January 2008 the liquidator of Upstreet International Limited and Artwall Limited sold the goodwill of both companies to Sixty-Sixty Four Limited for £9,400 and the company, under the control of Mr Dhelens and Mr Ibanez, continued to publish UPstreet and also published Palladium for the UK market.

7          Whilst mention of licences and agreements relating to the arrangements for use of the intellectual property rights for UPstreet and Palladium were made to the investigation, no documents have been produced and although the rights in Palladium are shown as belonging to Sixty-Sixty Four Limited in the company’s draft accounts, they are in fact registered to Mr Dhelens and Mr Ibanez.  The company’s draft accounts also disclose liabilities of £102,460 in relation to credit card debts although again there is no documentation to show that the company had any credit cards of its own.

8          The petition to wind up Sixty-Sixty Four Limited in the public interest was issued in the High Court on 12 June 2009 under section 124A of the Insolvency Act 1986. Meanwhile and notwithstanding the presentation of the winding up petition a meeting of creditors was convened on 30 June 2009 to consider a Creditors Voluntary Arrangement at which the company disclosed  assets of £6,999 and liabilities totaling £274,711.The directors’ proposal was accepted by the company’s creditors and joint supervisors were appointed to administer the scheme. The assets to be introduced into the scheme were estimated to be £120,000 comprising monthly contributions of £2,000 by the company over a 5 year period.

9          At the first hearing of the winding up petition on 14 October 2009 the company opposed the winding up and directions were given by the Court for the filing of further evidence.  A three day hearing was accordingly fixed by the Court to commence on 22 June 2010.

10        On 26 October 2009 the joint supervisors reported that the proposals agreed at the meeting of creditors held on 30 June 2009 had not been complied with as the company had failed to make the monthly contributions (a single payment of £2,000 only was made) and formally confirmed that the Creditors Voluntary Arrangement had failed and that there were insufficient funds to enable the joint supervisors to issue winding up proceedings.

11        On 12 May 2010 the company filed dormant accounts for the year ended 31 March 2009 and on 3 June 2010 filed dormant accounts for the year ended 31 March 2010.

12        On 20 May 2010 the company, through its director Mr Dhelens, stated that the company, while not agreeing to the grounds, no longer opposed the winding up. The matter was duly heard by the Court  on 25 June 2010 and the company was ordered into liquidation on grounds of public interest.

13        Company Investigations carries out confidential enquiries on behalf of the Secretary of State for Business, Innovation & Skills (“BIS”).

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

15        All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit ,  Tel No 0207 637 1110: Email: piu.or@insolvency.gsi.gov.uk

Contacts

NDS Enquiries
Phone: For enquiries please contact the above department
ndsenquiries@coi.gsi.gov.uk