By Andrew Green, Staff reporter 
Singh
COURTS PLC, the United Kingdom-based parent company of Courts (Jamaica) Limited, has been placed in administration.
This follows the refusal of the furniture and electrical appliance retailer's banks to agree to waive financial performance standards attached to its loans or to provide additional funds, a statement issued by Courts (Jamaica) said yesterday. When a company gets into financial trouble, an administrator can be appointed to get it out of the difficulty.
"This action does not affect the Courts overseas businesses," said the local company's managing director Hayden Singh. He said, "It is business as usual at Courts (Jamaica)."
Courts Plc has had severe chronic financial problems which were worsened by an expensive restructuring programme and more recently by the impact of Hurricane Ivan on its profitable Caribbean operations. The company has 89 furniture stores in the United Kingdom and a total of 350 outlets in 20 countries.
The stock price collapsed early in November after the company published a bleak profit forecast. After losing nearly J$4 last year the company projected a somewhat smaller but still staggering loss expectation this year.
The board of directors placed the company in administration on Monday, to bring back some level of confidence in its operations to the market.
DIRECTOR
Owned 52 per cent by the Cohen family, Courts Plc is led by chief executive Bruce Cohen. Howard Cohen is its deputy group managing director.
Bruce Cohen, former chairman of Courts (Jamaica) Limited and director Howard Cohen, resigned their positions on the local board effective June 15 and July 15 of this year.
"We are not in administration," Mr. Singh said of Courts (Jamaica). "We (the Jamaican directors) are running the company."
Courts (Jamaica) is profitable and independent of any financial support from Courts plc, Mr. Singh said.
One of the strategic options which Courts Plc had been pursuing was the floatation of its Caribbean regional entities in a public offer in June of next year. Mr. Singh said it would be logical for the administrator to continue with this option.
An administrator's main aim is to rescue the company as a viable operation. If that is not possible, then the aim would be to get the best deal for creditors that is possible.
"The Caribbean region has been one of the most profitable for Courts Plc," Mr. Singh said. It would be in the interest of both Courts Plc shareholders and creditors to push the regionalisation process ahead, as creating the new Courts CARICOM entity would allow Courts Plc to raise cash and cut its debt.
"The regionalisation process must continue until someone tells me otherwise," Mr. Singh said. This is because shareholders and customers of Courts in the Caribbean would also be better served by a strong regional firm.
