Ernst & Young sheds staff at fit-out firm while negotiating buyout deal with management of furniture subsidiary
The receiver of insolvent fit-out group Curzon Holdings has made 86 people redundant and agreed to sell a subsidiary to its management.
Only 28 of the original 114 employees remain at the group's main company, Curzon Interiors, after receiver Ernst & Young decided last Friday to retain a skeleton staff to work on remaining contracts.
Curzon Holdings, which went into administrative receivership on 7 March as a result of cash flow problems, has two other companies that continue to trade: furniture firm Task Systems, which is the subject of the buyout, and building maintenance outfit TCL Granby.
A source close to Curzon said Ernst & Young had agreed a deal with Task. A price is still being negotiated. It is understood that management will carry out the purchase using money in the £12m-turnover business.
Tony Daltrey, Task's joint managing director, declined to comment on the deal but said: "It is business as usual. The Curzon problems have not harmed us."
A deal for TCL Granby, which Curzon bought in September 2001, is also expected next week, but it is unclear what form this will take.
At Curzon Interiors, an Ernst & Young spokesperson said the receiver had installed a team to begin talks about transferring a number of contracts to other fit-out firms.
Curzon Holdings has had its problems but the future was very rosy
Curzon boss David Freeborn
However, a senior source at Curzon said that this might prove difficult as all but one of its "substantial" contracts were frameworks.
This means that the client would have at least two or three more fit-out firms as part of the framework, and could pass on Curzon's workload to one of them. The contract that is not a framework is the £25m Hotel Intercontinental in Mayfair, central London.
David Freeborn, chief executive of Curzon Holdings, declined to comment on Ernst & Young's plans but hinted that he believed that Lloyds TSB, Curzon's bank, had pulled the plug on what was essentially a successful business.
He said: "Obviously the company has had its problems, but the future was looking very rosy indeed."
Freeborn and finance director Simon Charlick have been at the helm since 1999 when they led a £20.5m buyout from Jarvis.
It was then called Jarvis Newman but was subsequently renamed Curzon Holdings. It posted a pre-tax profit of £650,000 in 2004.