PUNCH ‘PARTNER’ ASKS PUNCH FOR WAIVER

Ron Piper, Landlord & Licensee at The Sir John Barleycorn, Hitchin for over 11yrs has written to Punch requesting a waiver on the debt they claim he owes them and impending court action next Friday 30th May.

Punch have just been granted a waiver on its £3 billion debt by the bondholders so that they can hold more talks and Mr Piper feels it is only fair that its ‘partners’ should be awarded the same.

In a 6 page request he points out the failure of the pubco to honour its commitments to its ‘partners’ and its neglect of its estate concerning repairs/maintenance issues and claims they have breached their covenants to their ‘partners’ and also the IFC and Human rights Issues. Repairs taking over 17 months to fix including undersize Gas Pipes to the kitchen causing no use of the commercial cooker whilst having no kitchen in the residential area with a child of 4 living there, are just 2 issues mentioned.

Mr Piper was recently in London when CAMRA’s petition ‘LET’S CALL TIME ON THE GREAT BRITISH PUB SCANDAL’ was handed into Rt Hon Vince Cable MP, Secretary of State for Business with over 42,000 signatures, calling on the Government to stick to its promise to introduce a Pubs Watchdog to prevent valued pubs from being placed at risk of closure due to unfair practices in the pub sector.

Mr Piper states that as far back as 2009, the House of Commons published a report which stated: “64 per cent of lessees did not think their pub co added any value and while a fifth had had a dispute with their pub co; few (18 per cent) were satisfied with the outcome …. lessees often risk the loss of their home as well as their business if they cannot reach agreement”

Mr Piper has been under threat from Punch for years and risks losing his livelihood and the home of his Daughter and Granddaughter next Friday…..showing that in 5yrs nothing has changed!

He has written to prominent MP’s and Bondholders enclosing a copy of the letter sent to Punch showing why it’s time for immediate change in the Queens Speech, and although he fears it may be too late for his family hopes others can benefit.

http://www.pubscandal.org.uk/

http://www.fairdealforyourlocal.com/

Mr R. Piper
The Sir John Barleycorn
Hitchin
Herts
SG5 2JZ

sirjohnbarleycorn@hotmail.com

A copy of the letter sent to Punch Taverns appears below.

Stephen Billingham – Executive Chairman.
Jubilee House
Second Avenue
Burton-upon-Trent
Staffordshire
DE14 2WF

21/5/14

cc: MBIA/Deutsche Bank/ Rothschild/M&G/Barclays/Aberforth Partners /ABI/BIS/ Rt Hon D. Cameron/Rt Hon G. Osborne/Rt Hon P.Lilley/Rt Hon G.Mulholland (Save The Pub Group)

Dear Mr S. Billingham

WAIVER REQUEST

There has been much coverage in the media lately about Punch Taverns requesting a waiver on their debt which has now been granted. This is not the first time and probably not the last as Punch have been under threat of closure as far back as 2009:

Oct 2009 – Toxic pub valuations

Another set of results and another impairment charge from the heavily indebted Toxic Pub Company.

Having written down its estate by almost £600m in the past year and a half, Punch Taverns has lopped a further £638m off the value of its managed and tenanted pubs.

Nov 2010 – Toxic Pub Co. meets toxic bond insurer

You won’t find Ambac mentioned in Punch Tavern’s most recent annual report.

But it’s there. Hovering — waiting — in the background.

Dec 2010 – The estate has combined debts of £3.1bn, leading to speculation that Punch would sell off many outlets.

Aug 2011 it was reported – The heavily indebted Toxic Pub Company – aka Punch Taverns – has completed its demerger.

April 2012 – Punch Taverns sees profits slump 19pc

The group, which is in negotiations with bondholders to shrink its £2.2bn debt mountain, said net income at its 3,000 core pubs slipped 2.1pc during the 28 weeks to March 3 as cash-strapped households continue to keep a tight rein on their spending. .. The company’s disposal strategy, which will see it shrink from about 4,800 pubs to just under 3,000, was on track for this year.

April 2013 – Time called on Punch Taverns’ debt plans

Punch Taverns’ senior bondholders have cast doubt over its ability to restructure its debt mountain despite the pub operator’s claims that it was on track to have a plan in place by July.

May 2014 – Punch Taverns says note holders vote in favour of waiver requests

Covenant waivers will expire at latest on 29 august 2014, and it is a condition of waivers that a restructuring is launched by 30 June

For over 5yrs now Punch Taverns have been negating debt of £2/3 Billion caused by their own failed pub-co model and failed investment in their estate and yet still paying out huge  bonuses whilst it’s ‘Partners’ live from year to year not knowing where they really stand and have poor quality of life as recently reflected in surveys.

You also claim that – ‘Discussions have been ongoing between and with stakeholders with a view to reaching agreement on terms of a consensual restructuring for punch a and b securitisations.

Further time will be required to finalise proposals and to permit stakeholders and their advisers to review and comment on documentation necessary to implement them.’

As your ‘Partners’ should not the same discussions be ongoing with us?

As far back as May 2009, the House of Commons published a report. The Committee commissioned its own independent survey as part of the inquiry, to determine whether the negative evidence received from lessees was typical of feelings in the industry.

“The survey results, printed with the Committee’s evidence, underpinned the Committee’s findings. 64 per cent of lessees did not think their pub co added any value and while a fifth had had a dispute with their pub co; few (18 per cent) were satisfied with the outcome. The Committee was astonished to learn that 67 per cent of the lessees surveyed earned less than £15,000 pa and over 50 per cent of the lessees who had turnover of more than £500,000 pa earned less than £15,000 – a 3 per cent rate of return. The lessees may share the risks with their pub co but they do not appear to share the benefits. The report therefore concludes that problems which were identified by the Trade and Industry Committee four years ago remain. An imbalance of bargaining power between lessees and pubcos persists and the arrangements for assessing rents remain opaque. Rental assessment should be the basis for negotiation, but incumbent lessees often risk the loss of their home as well as their business if they cannot reach agreement, the report says.

This is true in my own case:

I have been a tenant /licensee/DPS for over 11yrs with Punch Taverns and enclose a brief scenario of my experience with you:

In 2003 I took over the Sir John Barleycorn with my daughter aged 15 (being a single dad) having taken out a loan of £15000.  I was the 4th landlord in 5yrs and was informed that this was the pubs last chance and yet 11yrs later I have become the longest serving landlord in the pubs history dating back to the 1800’s and it has been granted an ACV – the 1st pub on Hitchin – But no thanks to Punch Taverns who objected to it on the grounds:

“The various activities mentioned by the nominee (various tenants of the Sir John Barleycorn, and their like, have continued to strive to be local community hubs and viable businesses, often featuring local bands, running regular quizzes and hosting pub teams for a variety of traditional activities.) in the application are ancillary to the use of the premises as a public house….the current use of the premises as a public house i.e. a place where alcohol isconsumed and sold, does not itself further the social wellbeing or social interests of the local community and therefore is not land of community value…..The various activities set out in the nominee’s statement do not have to take place ina public house.”

This was widely published in Private Eye 21/12/13 No 1356 ‘Low Punch’ and reported by Pete Brown (journalist) and others.

This from a company who claim to be ‘Passionate about Pubs’!

We experienced heating problems which took over a year to fix with new boiler; thermostats etc except even to this day we still have the sound of Niagara Falls in the pipes & have to top-up the pressure tank.

It took 3yrs of complaints concerning the cellar to finally have all new beer lines and cooler but only when it finally broke down. We had a leak in the Gents sky-light that took 3 attempts to fix and flat roof repairs that took months to finally fix, add to that many failed promises over the years. And yet all the time we up kept the interior as per our contract.

We asked for a lease at the Barleycorn which was put on hold in March 2005 when I was asked if I would take over The Peartree at Bassingbourn on a free lease with the idea of also securing the lease for the Barleycorn and then after 2yrs sell on the Peartree at a profit.; thus securing my future at the Barleycorn for my family. The Peartree was at a high rent due to a planned refurbishment program that was supposed to be on taking over the pub but took over 9 months to happen and then was of low standard. Common practice is to only increase the rent AFTER the refurbishment – so you had over 9 months above rent!

As early as Sept 2005 I was writing to Punch stating they had broken their agreement as no work had been carried out and asking for a rent review and explained that I’d had more conversations about getting Brulines (monitoring equipment)in than trying to sort out these problems and that I was under financial strain.

Again in 2006 I again asked for a rent review and to look into the quality of the refurbishment and also that Punch had sent bailiffs in without notice and at a cost of £800 and that I was on the verge of bankruptcy.

During this tile Punch offered me a 3rd pub – The Gold Crest in Baldock on cheap rent with the idea of that making money to help pay off the debts! And yet according to Punch I’m a failed publican. I’d say they are a failed pub company!

You have always relied on ‘Churning’ tenants over and in February of this year actually stated – “We’re already starting to see resistance from new tenants and the business model is critically dependent on new tenants,”

What about supporting the ones you have?

Eventually Punch said I could re-assign The Peartree at a cost of £1000 plus a penalty clause of £15,000 for selling within 2yrs. But n the end you took me to court and evicted me. I lost all my deposit, my F&F and the remaining debt of £16,878.86 was transferred to the Barleycorn account on 05/03/2007 so that I still had a home for my daughter.

As the HOC report quoted above clearly stated:  An imbalance of bargaining power between lessees and pubcos persists and the arrangements for assessing rents remain opaque. Rental assessment should be the basis for negotiation, but incumbent lessees often risk the loss of their home as well as their business’

Yes you had us over a barrel!

This obviously put a great financial burden on the pub and myself and eventually I was declared bankrupt in 2011 as the Barleycorn could not cover it’s cost and the debts especially at such high cost of beer and continued fines etc.

Punch agreed to transfer the Barleycorn into a Ltd company and AGAIN transferred the debt of £1,918.78 + admin fees of £316.25 using my daughter (22yrs on benefits as guarantor with no credit check) and changing the agreement at the same time although we were told it was a straight transfer, same conditions as I have written to you about on many occasions.

We have had continued problems with Non-Repairs and maintenance with Punch with gable end repairs where light and weather was emitting into loft which took over 17 months to get repaired and only after another piece fell off and as stated in my letter of 12/5/14 – ‘As a company responsible for structural and exterior repairs you had put people but especially Children at ’AT RISK’ for 18 months as there is a JMI School  where children walk past daily to get to school , not to mention my own Granddaughter (5) who goes there. The wood could have easily fallen down at anytime during the 18 months you did nothing.’

In Feb 2013 the Gas Service Inspection that I have to pay for via yourselves disconnected our cooker in the Kitchen which is in the commercial section of the pub.  As there is no Kitchen upstairs in the residential area we were left without means to use a cooker. This was due to ‘undersized pipes’ that was 1st reported in Sept 2011 as NCS. (There was nothing wrong with the cooker). Punch’s support & help to it’s ‘partner’ – Buy an electric cooker!

When I complained to Punch in 2013 they started legal proceedings for eviction over trespass which in our view should never have been bought as Their representative had agreed that as long as they had a guarantor it was okay. This precedent had already been set in court with in the case of Punch v Eastcote Arms. Eventually after nearly a year and at a cost of £1000 to ourselves to re-instate Ltd Co they discontinued the case in Jan 2014 – BUT then gave us a months notice to clear the rent/trade account that was in dispute anyway with PICAS hearings and complaints – or face eviction again.

In Feb of this year 2014 on the next Gas Inspection it was classed as ‘At Risk’ and we were almost cut off but allowed to keep it on due to my Granddaughter living above.  Punch have since changed all the pipe work but it has taken yrs and we still cant use the cooker as now it needs new cut-off valves and extraction. Over all this period Punch have stated that they are not prepared to pay for extraction etc for a pub that does little or no food.

Due to these problems I have withheld some rent until all work is carried out and am looking at a possible counter claim for all the stress which has taken its toll on health and quality of life not only to me but my family is immeasurable. I am a single Dad with a Daughter and now Granddaughter (5) and live day to day not knowing what is happening – how to plan ahead with functions etc and have written to Punch to no avail.

Is this really Punch putting to quote:

Partner First:  We put the Partner first in all we do, offering them the BEST possible support and the highest levels of service.

A Punch spokesman said they wanted to get away from the whole “landlord/tenant thing”, and envisioned a future where support for lessees

Nigel Turpin, corporate affairs director at Punch Taverns, said in 2008 ‘the company was responding to requests for help whenever it was asked for‘– Well it hasn’t happened!

As quoted to yourself and previous CEO’s life with Punch is akin to ‘The Sword of Damocles’- where a sharp sword hovered over his head suspended from the ceiling by a horse hair.

This is an allusion to imminent and ever-present peril and a sense of foreboding engendered by a precarious situation.

I am not alone as just a few of these comments from the ‘Buyers Club’ forum show:

(1) there is no transparency anywhere in all the dealings, peoples lifes and livelihoods are on the line, and I’m not talking about the ones with handsome pensions and have been getting bonuses to boot. all well and good saying T’s & C’S will continue but can’t see how when i signed my agreement with punch and they sell it on !!

(2) The Pubco “Model” has never worked. punch taverns has sold many pubs off to “drive down” debt but the debt has not been reduced. We hear spin spin spin ( lies lies lies? ) Will the truth ever be told? My lovely village pub has been robbed blind by punch taverns with no real return whatsoever. Whether restructuring will go ahead or not there is not life left in the old dog I feel. We have heard it all before and we will no doubt hear it all again. Empty promises. punch taverns have felt that it is all right to churn pubs. Why should they care the tiniest bit about our deposits. Stephen Billingham I challenge you to an open forum with your tenants. The truth of our feelings is deep.

(3) it’s a shame the partners? are not thought of the same as the share holders

(4) It is all very well to constantly talk about hypothetical situations I bet that way back in 2006 the situation of Punch desperately negotiating with bondholders to stave off default having already breached its covenant would have been brushed off as hypothetical.

Your answers to these points thus far have convinced me that the suggestion that Punch is “passionate about Pubs” is an illusion you are in no position to be passionate about anything apart from avoiding bankruptcy. This is why we are hearing nothing from Punch about strategy and future plans.

The situation if Punch sells a pub to a new freeholder – not the tenant is not hypothetical it is happening all the time.

When new tenants join Punch you are very keen to tell them all about the wide range of beers you can supply and how they can run their own businesses, but it now seems that this, to be charitable, a little economical with the truth. Your tenants are never in control of their own businesses because you choose, in a broad sense, which beers they can stock and you control their businesses through the entirely unfettered mechanism by which you decide the prices tenants must pay for tied product despite the fact that the purchasing power we tenants create means you are buying these products at a cheaper rate than anyone – or so you say.

(5) My beer Bill last week was £2680.00.

I could have bought the same in Bookers for £1900.00.

As already stated I have written many times over the years asking for rent reviews, discounted beers as I’m on the highest level possible (Carlsberg £149.26) and complaints about agreements, repairs etc but I’m afraid you are NOT listening to your partners.

BUT if you truly value us as your ‘Partner’ I trust that you will offer me the same courtesy that Bondholders have offered you for the last 5yrs for YOUR breech of agreements to them and as such:

I request that a waiver also be granted to myself to allow time to conclude the disputes already logged and to your other partners who too may to be in dispute.

 I believe you are in breach of ‘Code of Practice’ on many counts as reported to PICAS, BBPA, BIS, NHDC Environmental Health & HSE, MP’s etc and are in breach of the Human Rights Act sections 4 & 8 with regard to quality of life.

I do not believe that is ethically, morally right to not offer us the same and to continue with an eviction when over the last year you have sent us 3 renewal notices and there are on-going disputes logged with PICAS and governed by the IFC.

Also there is no clarity on the actual debt as £16,878.86 was transferred to the Barleycorn account on 05/03/2007 – another £1,918.78 transferred to Ltd Co – What is the breakdown- what is the debt made up from. An opening balance must be clear and proved + £1000’s of legal fees over the years some without notification – all complained about and awaiting clarification.

But instead of working with your partners you have taken the easy route of not listening and evict another tenant and find another tenant as – ‘the business model is critically dependent on new tenants’  or simply close the pub and sell as a building site as you have done with so many over the years.

Perhaps the Bondholders should do the same and not work with you to resolve the problems?

Yours Sincerely

Mr R. Piper – Miss E. Piper

Sir John Barleycorn

Oughtonhead Way

Hitchin

Herts

SG5 2JZ

 

Email – sirjohnbarleycorn@hotmail.com

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One comment on “PUNCH ‘PARTNER’ ASKS PUNCH FOR WAIVER
  1. Angie Sofia Ryan says:

    Very well done Ron! Wishing you all the best mate! Top man!

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