Within weeks of going into voluntary liquidation, Aslib, the London-based LIS association offering recruitment, training, and information services, is to be reborn as a private company.
While at the time of writing it had not been officially announced, a spokesperson for the liquidators confirmed that, “subject to legals,” Aslib’s own CEO, Roger Bowes, has bought the assets. These assets are expected to form the basis of a new company that will operate from the same building, with the same staff and the same CEO, and will trade under the same name.
Founded in 1924, Aslib was once a widely regarded international LIS organization. During the last war it was also an influential voice in industry and government circles. In recent years, however, it has struggled to make ends meet and has had to sell off most of its assets—including its journals to Emerald in 2001 and its book publishing business to Taylor & Francis in 2002. Membership plummeted from 1,600 3 years ago to 600 today, and over time staff numbers have fallen from around 40 to 10.
Finally succumbing to voluntary liquidation last November—when its bank refused to extend its £195,000 overdraft—Aslib was placed in the hands of U.K. liquidator Begbies Traynor on Dec. 22.
A Statement of Affairs presented at the liquidator’s meeting revealed that Aslib’s debts had grown to more than £830,000—the result, explained Aslib director Christopher Turner, of “wholesale closure of libraries and information departments” and the impact of 9/11. The latter, he added, meant that over the past 12 months “Aslib lost almost £250,000.”
Speaking to Information Today, Turner explained that after being alerted to the problem by the bank, Aslib’s directors spent the summer exploring a number of different strategies, including the option of selling Aslib to Emerald. The latter plan failed, however, as a result of Aslib’s charitable status. “As a charity, we couldn’t be bought.”
With annual membership revenues still running at £230,000, the directors believed that Aslib remained a potentially viable business. However, it was clear, said Turner, that the bank was no longer prepared to support a charity. “So we had to effectively privatize Aslib. And the only way we could do that was to do what we have done: to close it down by making it insolvent, and then let someone else buy it.”
That the purchaser of Aslib is its own CEO, however, has proved controversial, particularly given the timing and the manner in which the ownership change was effected.
The first issue of contention flows from the problems that confronted other industry players who were interested in acquiring Aslib’s assets. When, for instance, Nigel Oxbrow (managing director of the London-based recruitment, training, and advisory services company TFPL) heard of Aslib’s insolvency, he wrote to the liquidator expressing an interest. Eight days later, at 12:04 p.m. on Dec. 23, he received an e-mail out of the blue from the liquidators telling him that he had until noon the next day, Christmas Eve, to make a final offer. “It was a totally unrealistic deadline and very unprofessional,” said Oxbrow.
Roger Bilboul, chairman of Information Today, Inc. (which publishes Information Today), also expressed an interest in Aslib. He too was given the same 24-hour deadline. “I am angry at the speed with which the whole operation was handled,” said Bilboul. “How could anyone provide a fair market value for the assets of Aslib in the space of 24 hours on Christmas Eve?”
As a consequence, neither Oxbrow nor Bilboul felt able to make an offer for Aslib. Said Oxbrow: “I find it very hard to understand how it could possibly be in the best interests of the creditors or the members.”
Under these circumstances, it appears that anyone from Aslib’s management would be at a significant advantage, since he/she would be able to prepare a bid before the company even went into liquidation. As Bilboul pointed out, “the time scale and procedure used by the liquidator placed Roger Bowes in a very strong position.”
A spokesperson for the liquidator, however, denies any impropriety, insisting that, since Aslib membership fell due on Dec. 31, it was vital to act with the utmost speed. Unless the sale was completed by that date, he explained, there would be no business left to save. “Begbies Traynor [gave] other potential owners a short amount of time to come up with offers because of the tight deadline caused by the Christmas holiday and the need to have the sale concluded before 31 December.”
But why was the liquidation of Aslib timed to take place at Christmas, a week before membership subscriptions were due? “That is a question for Roger Bowes,” replied the Begbies Traynor spokesperson.
Unfortunately, Information Today was unable to put that question to Bowes, who declined to give an interview—on the grounds that he was not empowered to discuss the matter until the liquidation process was fully completed.
Turner, however, could comment. Vigorously rejecting any suggestion that the liquidation timetable was engineered, he insisted that the entire process was subject to the legal constraints imposed by Aslib’s charitable status. “We had to have a board meeting within a certain period of time, which took place in September. We then had to have a meeting of our executive and finance committee, and, as our chair was abroad, the first date we could hold that meeting was on 2nd December. We then had to have a fixed period of time before the liquidators meeting, which took place on 22nd December.”
The priority throughout, added Pam Mayorcas, another Aslib director, had been to protect Aslib employees. “Council’s wish and intention was that Aslib would continue to operate exactly as it was—from the same premises, with the same staff, and providing services much along the lines of those it has been providing until now.” The primary objective, she added, was to facilitate a “seamless” transition from Aslib as charity to Aslib as private entity.
It is this seamlessness, however, that has most concerned observers, particularly in light of the high level of confidence displayed by Aslib’s management that their desired solution would occur. In early December, for instance, Bowes wrote to members informing them that Aslib was to be liquidated. He added that “immediately following the [liquidator’s] meeting Aslib will be bought and services at least comparable to those that you currently receive will be offered.”
Turner, who knew about the letter, disagreed that the outcome of Aslib’s liquidation does not sit comfortably with the normally unpredictable process of insolvency. “Roger [Bowes] was signalling that our conversations with the liquidators meant that we were confident there would be some solution for Aslib. It did not mean, however, that he was certain it would be his solution. What he was saying was: ‘We’re trying hard here to come up with a solution, and if you remain members all should be well.’”
The second issue of contention stems from the fact that the solution for Aslib was achieved at the cost of innocent creditors.
As co-owner of Expert Information, Bilboul is also a creditor. Pointing out that he is unlikely to recover a cent of the £24,000 Aslib owes his company, Bilboul said: “Expert Information is a very small company, and £24,000 represents an important percentage of our turnover. It will most certainly wipe out all of our profits, and we will have to probably dig into our personal resources to make up for the loss and avoid affecting our relationship with our employees and suppliers.”
In short, Aslib directors have saved the jobs of 10 people at the expense of 81 creditors, many of whom are small businesses and individuals who will struggle to absorb their losses. Does Turner regret that? “We moved as quickly as we could in order to try to minimize the level of debt,” he replied.
But perhaps the most puzzling question surrounding Aslib’s insolvency relates not to the past, but to the future. If, despite selling most of its assets and enjoying the tax status of a charity, Aslib nevertheless accrued debts of more than £830,000, how will it fare as a private company without those advantages?
Not very well, suggested a former Aslib journal editor. “Aslib made a great and useful contribution to the profession in the past. But today members get so little for their money, and CILIP offers so much more.”
Moreover, said a long-standing Aslib member, in acting in the way it has, Aslib has poisoned its own well. “This sort of action, although not illegal, always leaves a bad taste in the mouth. I do not think Aslib has a viable future any more.”
Turner disagreed, arguing that there remains room in the marketplace for a “very small, very focused, fleet-of-foot niche player.” As a charity, he said, Aslib could not fill that niche; but as a born again private enterprise, it can.