Administration likely for Albany’s UK arm as Albany Technologies ceases trading

Tue, 9 Feb 2010 | By Colin Cottell

Albany’s UK arm is likely to go into administration, according to a director of Albany Technologies.

In a letter sent to contractors yesterday, announcing that Albany Technologies is no longer viable, Shelley Eccleston, a director of Albany Technologies wrote: 

“As most of you have heard, the Albany Group in the UK has run into financial difficulties as a result of having its banking facility withdrawn [by RBS] before Christmas. The likely outcome of this action is that the UK arm of the Albany Group will have to enter into some form of administrative process.”

In January, Albany said that the three UK companies that had run into financial difficulties were Albany Management UK, Albany EMEA, and Albany Employment Services.

Eccleston continued: “Whilst Albany Technologies was not originally affected by these financial difficulties, unfortunately as a result of damage to the Albany brand caused by the other companies; the directors have determined it is no longer viable for Albany Technologies to continue trading.”

Eccleston adds that to avoid putting any funds at risk, Albany has decided not to process January 2010 timesheets. “Consequently if you have not already done so, will you please make arrangements to find another management company with effect from 1 January 2010.

It is unclear what the position of recruitment agencies and contractors is should Albany’ UK companies go into administration.

One recruitment agency owner, who wished to remain anonymous, told Recruiter his company was owed £250,000.

Contractors are also concerned that money they have deposited in split fund scheme company Mirasol Holdings has been used to pay RBS invoice finance. 

Many contractors working through Albany use Mirasol Holdings to hold their earnings, one benefit being that income can be distributed as profits. Mirasol Holdings is registered in the Turks & Caicos Islands.

One contractor, who is part of an action group formed to discover what has happened to the Mirasol money and possibly to take legal action, told Recruiter that contractors stood to lose an average of £100,000, with some at risk of losing considerably more.

Recruiter understands that Albany is in dispute with RBS about who owns the funds held by Mirasol.

Meanwhile Mirasol has apologised to its contractor members for becoming affected by Albany’s financial problems.

In a letter seen by Recruiter, dated 3 February, the directors of Mirasol wrote to members: “Unfortunately, Mirasol Holdings has got caught up in the financial difficulties associated with the Albany Group, and the directors of both companies are working hard to resolve this.

“We deeply apologise for allowing this situation to occur. However, we can assure you that it could not have been predicted and we do believe it is only a matter of time before it can be resolved.”

The letter says Mirasol understands its members’ concerns, and promises a dedicated telephone number this week for contractors to contact the company.

It also urges members who are seeking to take legal action against Mirasol to desist, as distribution of profit is not an automatic right, but at the discretion of the directors.

Recruiter contacted both Albany and Mirasol this morning, but no one was available for comment.