Open Air Fundraising restructures again
Howard Lake | 29 July 2003 | News
Following a meeting about its company voluntary agreement (CVA), Open Air Fundraising has been purchased by Open Air Global Ltd. There was no interruption in the direct dialogue company’s business.
Both Open Air Fundraising and Open Air Global Ltd are principally owned by Fruitful Fundraising LLP, the incubator for new fundraising companies.
The company says that the restructuring has saved 570 jobs.
Advertisement
Chris Coleridge, CEO of Fruitful Fundraising, said: “The new company carried on fundraising this morning with no interruption where Open Air Fundraising Ltd left off yesterday. All staff and directors have transferred across, client and supplier contracts are unaffected.”
He stressed that charities will benefit from the move. “The first act of the new company will be to establish a charitable trust, the ‘Open Air Trust’, into which Open Air Global will pay 50% of its profits. These profits will then be distributed to a range of charities. The first beneficiaries from the Trust will be charities who were owed money by Open Air Fundraising Ltd. This will continue until the charities benefiting from the Trust have received amounts from the trust equivalent to the amount they were owed by Open Air Fundraising Ltd. At that point, Open Air Global will continue to pay 25% of its profits into the trust in perpetuity, and the decision as to which charities will benefit will be made by Open Air Global’s staff.”
The transfer of Open Air Fundraising’s business was made “at real value”. It followed the failure of Open Air’s Company Voluntary Arrangement (CVA) which mandated minimum payments of £600,000 a year. The company notified creditors that it would be unable to meet its first payment due on 30 June 2003.
The Inland Revenue, the preferential creditor, did not agree to Open Air’s proposed amendments to the CVA, so Open Air Fundraising itself has applied for an administration order.
Andy Holliday, Chairman of Fruitful Fundraising, said: “In all likelihood Open Air Fundraising will now be wound up by the administrator. If this happens then the assets of that company will be paid to the Inland Revenue as they have preferential status over the other creditors.
He added: “e will make the first distribution to charities from the Trust, of about £125,000, within five business days of the Trust being formally set up which we hope will be by 15 August. We hope that all charities benefiting from the Trust will receive full compensation for Open Air Fundraising Ltd’s debts by December 2005, about two and a half years earlier than they were likely to under the old company’s CVA arrangement, where the Inland Revenue was first in line to be paid.”
Chris Coleridge said: “While there is still some hard work to do, the turnaround of a company that was in deep trouble 15 months ago is nearly complete.”
About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.