Major Agency Collapse
Here’s the inside story of a major agency collapse and the outcome of it.
Eight years ago there used to be company called Eurolink, who were well known in the IT recruitment market.
Eurolink then split into two companies, Aristotle Group which concentrated on recruitment and RDF Group. That went onto the Stock Market as Eurolink Managed Services.
They gave employees of the company shares when they put it on the AIM market.
In the spring of this year, Eurolink Managed Services changed its name to RDF Group.
Dave Wood, the MD of RDF Group used to work for Eurolink.
Around October of last year Aristotle Group got into financial difficulties. They started to fall behind with their payments to their contractors.
The company blamed this on IBM. They said that because IBM changed their payment dates from 30 days to 60 days this caused cash flow problems. So, everything else was a knock on from this.
However, other people I have spoken to have poured scorn on this theory. They say that they could have factored it in. They say that one company changing their payment dates couldn‘t have brought down a healthy company.
It seems, also, that the company owner, Tony Antoniades, was losing the energy and zeal that he had when he had built the company up.
He was near retirement age and he was having health problems. He had some kidney problems and was having some breathing related problems.
According to the insider he had appeared to have had enough of the business. His daughter Emma didn‘t want the business and he wouldn‘t sell it someone else. It was a pride thing with him we have been told.
RDF Group and Aristotle
RDF have distanced themselves from Aristotle. They are a stock market company and didn‘t want to be associated with a company going under.
They are, however, 95% owned by Tony Antoniades, but they are at pains to stress that he has nothing to do with the running of the company.
It seems that, of Aristotle‘s approximately 200 contractors, around 40% to 50% of those ended up with RDF Group.
In fact RDF made a Stock Market announcement on the acquisition of new assets which sent the share price up 30% in one day.
According to our source, all of the contractors on the IBM contract went across to RDF Group. It seems that this numbered 70 to 80 contractors. However, RDF have subsequently said that the number of IBM contractors that they took over was less than 30 and this was when IBM approached them.
It seems that the 25 contractors from the Scottish office transferred across to RDF. However, RDF say that this is not the case and that it was only a few.
It seems that around 10 Aristotle Staff transferred across to RDF Group. Also, 4 employees from the Scottish office moved to RDF‘s Livingstone office Again, RDF took over 6 employees from the Brighton office.
RDF say it was only a few employees and that they headhunted them in the normal way rather than moving them across.
Hitting the Skids
The payments to contractors worsened at the end of last year plunging Aritsotle into crisis and they were finally liquidated last week.
There appear to be few assets in the company with which to pay contractors who are severely out of pocket.
Contractors are asking about what happened to two major properties that were assets of Aristotle, i.e. Marlborough House in Brighton and Deakes Manor in the country.
Both houses were re-mortgaged using Aristotle assets. They paid for the refurbishment out of Aristotle Assets. There is a sum in the accounts of 150K for the upkeep of Marlborough House.
Indeed Marlborough House is now reckoned to be worth somewhere between 4 and 6 million pounds.
That would be plenty of money to pay the contractors with.
However, it seems that those two properties are no longer assets of Aristotle. What happened to them is currently being investigated.
This major agency collapse has had major repercussions for contractors.