The Full Story - Enduro2 2017 Cancellation and the Liquidation of trailAddiction and Trans-Savoie Ltd
Why was the Les Arcs Enduro2 cancelled in 2017?
In simple terms, trailaddiction Ltd and its sister company Trans-Savoie Ltd, were placed into administration in March 2017, as a result of 6-figure fines imposed trailAddiction Ltd by French Authorities, regarding historical discrepancies of social security payments in France for UK staff that worked on secondment. The administrators failed to rescue either company and therefore, despite the director’s best efforts and intentions, the event could not legally take place (all company funds and assets were frozen - at the sole discretion of the administrators, who did not allow the event to go ahead). The full background on all that, is below.
What is the connection with Davos Enduro2?
Ali (Director of Trans-Savoie Ltd) planned the Davos Enduro2 in collaboration with the good people of Bike Academy Davos. Ali made several scouting and planning trips to Davos between 2014 and 2016 and everything was in place to run the first Davos Enduro2 in 2017. Trans-Savoie Ltd promoted and sold-out the first Davos Enduro2 early in 2017 - a few months before trailAddiction’s difficulties noted above, came to light. During the administration, a deal was made to “save” the Davos Enduro2 event so that Bike Academy Davos agreed with Ali and the Administrators that they would press on with the event on their own, since all the arrangements were already in place. From that point onwards, Davos Enduro2 has been run as an event fully independently of Trans-Savoie Ltd. Today, Bike Academy Davos owns and runs Enduro2 Davos independently to the Les Arcs Enduro2 - although of course the shared “connection” and “spirit” still remains since both events were originally planned and conceived by the same person!
Who is Behind Les Arcs Enduro2 in 2019?
Geoff Hazouard of the long-established French MTB events organiser 4EventSport, approached Ali in 2018, to propose bringing back the Enduro2 to its rightful home - Les Arcs. A new collaboration was quickly agreed, based on a shared passion for the superb riding on offer in this region. The 2019 Enduro2 is organised and directed by 4EventSport, with Ali acting as a consultant to their team. Net result? We hope; the best of all worlds! French-led organisation on-the-ground (ideal for smoothing over local politics as well as being unaffected by any Brexit-related problems) with the vast international experience and passion of Ali’s 15+ years of bringing riders from outside of France, to enjoy MTB in the region.
What can I expect from the all-new Enduro2?
Basically, its a near-identical re-run of the 2016 event….with the addition of one or two new “extra secret” stages that we didn’t get local permission to ride, last time around. Good times! :-)
The team-on-the-ground will be a mixture of some of the old trailAddiction guides/crew, and the established team of staff and volunteers at 4EventsSport. Charly’s Factory Bar/Cafe, The Bistrot Restaurant in Vallandry, and the other key associates will of course, all play a big part of the event yet again.
With the above history, how can I be sure the event will go ahead? Is my money safe?
Its taken a full three years to pick up the pieces and get this show on the road again - we wanted to be 100% sure not to let people down. All of the local authorities are already on board and in full support. However, you don’t need to take our word for it. We’ve gone for a new online entry system through Engage-Sport.com (a well-known French-based online entries company). All fees paid upfront are held at Engage-Sport until after the Enduro2 is completed. Only then, does the organiser (4EventSport) get a single cent of it. So, if the worst or unexpected happens and the event is cancelled (but we really don’t see that happening!), Engage-Sport would simply refund everyone directly since they are holding the money in a protected fund.
Taking that a step further, if the world ends and Engage-Sport was also to fail as a company at the same time (note that they are entirely independent from 4EventSport, so this would be extremely unlikely), then all advance payments made by debit/credit card are automatically protected by your card issuer. In other words, your bank/card issuer is obliged to refund you in full, by law, in the event that you don’t get a full refund from Engage-Sport. (This is part of the reason why there’s always a small admin fee for signing up to events online - its basically the bank’s insurance policy just in case this were to happen).
I was entered into Enduro2 in 2017 when it was cancelled - what about me?
All riders who had a confirmed entry to 2017 Enduro2 will be given a special privileged access on entry to the 2019 Enduro2, ahead of the general public. A special link / voucher code will be emailed to all 2017 entrants 72 hours before public entries are available. We would be absolutely stoked to see you on the start line in 2019 and finally deliver the superb event that we had planned for you all along.
We understand from the administrators (still awaiting final detailed confirmation from them) that almost all riders were reimbursed their entry fee either directly by the administrators or via the additional securities and insurances that trailAddiction Ltd had in place to protect its customers against such a cancellation failure - namely ABTOT failure insurance (trailAddiction), and a large cash bond held at the Merchant Bank (Trans-Savoie Ltd). However it is with the deepest shock and regret that Ali has since learned that a small proportion (up to 40 teams) of 2017 Enduro2’s entrants may have been refunded only 40p in the £ (I.e on the team entry fee of 325 GBP, they were only refunded only 158 GBP by the administrators). Why this happened, is explained in detail below. It must be stated plainly that this went against the best assurances given to trailAddiction’s directors, at the time of entering the administration. Note also that once a company has entered administration, the former Directors have no control over what happens next with all company assets. Ali would like it to be openly stated that 100% of all entry fees, PLUS an extra surplus of cash and assets in excess of 100,000 GBP, were handed over to the administrators on the understanding that they would ensure a full refund to ALL of trailAddiction & Trans-Savoie's customers, including those signed up for Enduro2.
Ali has lost literally months of sleepless nights over this ‘moral injustice’ and what he feels as a personal failure against his customers - many whom he considered personal friends. Ali would be delighted to take the opportunity to finally put this one right. Ali would like to reach out to any riders who did not receive a full refund on their Enduro2 2017 entry, and ask them to contact him personally on email@example.com. He hopes to make individual arrangements with all of these riders, to make up the difference of monies lost, against the cost of an entry to the 2019 Enduro2 paid to 4EventSport.
More information about the why trailAddiction Ltd was fined, and why this led to administration; event cancellations, and subsequent Liqudation
trailAddiction Ltd was suddenly and unexpectedly served with 400,000+ Euro fines and back-charges from French authorities, following a lengthy administrative battle lasting several years. A number of infractions were alleged by the French Authorities; specifically - Employing MTB guides without the correct qualifications as required in France; and employing British nationals on UK PAYE contracts, (sent on secondment to France), without obtaining all of the correct documentation in advance from UK authorities (namely E101/A1 forms - a document issued free of charge by the UK authorities which confirms that social security payments have been kept current by UK employees sent temporarily to France nd therefore the employer is not required to pay those contributions a second time, in France). trailAddiction employed the services of professional Chartered accountants in both the UK and France to deal with all payroll matters for the business. Unfortunately they omitted to obtain these A1 forms from HMRC nor advise the directors that they were needed. On a visit from French inspectors, the presentation of full payroll records of staff employed through the UK PAYE system was considered as insufficient evidence that all payroll obligations had been met in France. (Without A1 forms for every staff member employed historically looking back 5 years, the French government argued that all National Insurance payments made to the UK, should actually have been made in France). It should then have been a simple matter of trailAddiction to obtain any missing A1 forms from HMRC in retrospect - however since some forms were from periods from over 2 years ago, HMRC would not agree to immediately re-issue them, being so far into the past. Therefore the French authorities accused trailAddiction of the offence of 'concealed employment' (on the grounds of employing staff without paying the necessary social contributions in France - it was not relevant to them that contributions had already been paid in full, in the UK).
At this point it should be noted that secondment of UK staff to France is standard practice in the seasonal ski and MTB industry and is a big part of the freedom of movement laws surrounding the European Union. It benefits the employees since they can maintain a UK pension and UK social security (healthcare, unemployment benefit etc) rather than having to leave the UK system entirely, for the sake of a short and temporary period working abroad. It should also be noted that this action by the French authorities followed a lengthy legal battle regarding the French authorities’s refusal to recognize UK guiding qualifications as valid in France. A very similar case was fought by UK ski instructor Simon Butler who was convicted in French court of various offences, fined heavily and even jailed for his “crimes” - however his convictions were eventually quashed on appeal to a higher court. Story here:
’Redressements’ (French social security back-charges and penalty fines) were imposed on trailAddiction Ltd unilaterally by the French administration without a court hearing, and the directors of trailAddiction strenuously denied all alleged infractions. Quite simply it was an administrative delay at HMRC that prevented trailAddiction from presenting A1 forms to the French authorities - which would have immediately caused them to drop the charges and fines.
However, professional advice taken at the time left the Directors with no alternative option but to place the company into administration - primarily to “protect” the creditors best interests. The intention was to protect all the advance payments on events and holidays from further aggressive French action, until the case could be resolved in court. The Directors were instructed that they were prohibited from refunding any entry fees to customers themselves, but that the Administrators would ensure that this happened through the proper legal channels, if indeed that was necessary at all. Entering administration was a way to protect against the event of aggressive French authorities from demanding immediate payment of the above mentioned fines - thereby immediately bankrupting the company and preventing refunds from being made in full.
Unfortunately. handing full control (and all funds) to the administrators precipitated an irreversible sequence of events that led to the Administrators; Begbies-Traynor Ltd, immediately choosing to cancel all of the companies’ events and holidays (excepting Davos Enduro2); take their own fees (90,000+ GBP in total!) from company funds; chose not to attempt to defend the company against the above allegations in France; sell off all company assets, and only then, distribute any remaining funds leftover, back to the customers. The directors had no control or influence over any of these actions taken by Begbies-Traynor.
For the record, yes, retrospectively this was obviously a huge mistake - but one taken in the best of faith - and resulted in the loss of a lifetime’s passionate work and personal reputation, for myself - Ali Jamieson. The personal tole that this took, as well as the knowledge that I had let down hundreds of loyal customers, most whom I considered as personal friends, was unimaginable. For what its worth, I lost a lifetime's worth of time and personal financial investment and savings in the company (but what was most heartbreaking was no longer being able to share the passion of what I have always believed to be the best mountain bike trails and adventures, in the whole world, with my friends; my customers).
Why was Trans-Savoie and Enduro2 affected by trailAddiction's problems?
trailAddiction Ltd was a UK company with a French Branch, that provided all-inclusive mountain biking holidays (including guiding) in France, as well as providing event management services for the Les Arcs Enduro2 and the Trans-Savoie Enduro2. This company was forced into administration early in 2017.
Trans-Savoie Ltd was a UK company that was completely independent of trailAddiction Ltd, with different managers and shareholders. Trans-Savoie Ltd was a UK company (with no French branch) that specialised in promoting, marketing, and developing MTB-related holidays and events. All trailaddiction-branded guided holidays, Davos /& Les Arcs Enduro2 and Trans-Savoie Enduro2 events were marketed and sold from the UK by Trans-Savoie Ltd.
The two companies traded together on a regular basis, with trailAddiction Ltd being the primary sub-contractor of Trans-Savoie Ltd that provided all on-the-ground services in France in order to deliver events and holidays that were sold from the UK by Trans-Savoie Ltd.
In March 2017 the directors were advised to seek the advice of a UK-based Insolvency Practitioner with respect to ensuring they continued to meet all their legal and financial responsibilities in the UK, whilst defending the case/charges brought in France. The advice received during this meeting was wholly unexpected and terminally catastrophic. Whilst the arguments were complex, the overriding advice was that trailAddiction must be placed immediately into Administration until such time as the legal case above could be resolved - in order to protect the interests of all creditors to that company. It was verbally agreed with the directors that the administrators would continue to defend the case on the company’s behalf. Furthermore, the advice was - contrary to previous advice - that Trans-Savoie Ltd might also be affected and in the interest of meeting all legal obligations of the directors and to best protect all creditors, that Trans-Savoie Ltd should also be placed into Administration until such time as Trans-Savoie Ltd’s trading position could be clarified by the administrators.
On entering administration, all assets of both companies were transferred into the full control of the Administrators.
They then immediately proceeded to cancel all events and holidays of trailAddiction and liquidate all company assets. They decided not to attempt to defend against the fines and charges of the French authorities. After about 3 months of “investigation” they concluded that, as the Directors had assumed and indeed insisted during the initial visit, in fact Trans-Savoie Ltd was not insolvent and therefore there was no reason that it could not be reinstated from administration and returned to the full control of the directors. However before they did this, they applied an inter-company charge between trailAddiction and Trans-Savoie (for undisclosed / unjustifiable reasons) that allowed the them to transfer a 5-figure sum from the healthy bank balance of Trans-Savoie Ltd, to the now-insolvent trailAddiction Ltd. (Note - trailAddiction was only insolvent because they decided not to defend the case against the French authorities, in other words they accepted the fines and charges set against trailAddiction as being valid. The directors have never accepted this and two years on, the directors are still waiting for an appeal to be heard in France with the expectation to finally clear the name and reputation of all involved).
The administrators charged a combined total for all of their “work” of approx 90,000 GBP - the directors had no influence or right to veto this fee and they absolutely refused to endorse it when asked to do so. This fee was taken from the cash funds in the businesses. They then proceeded to distribute whatever was left, between the customers who had paid their entry fees up front, the French authorities, and any other creditors.
If you are still following - what this meant in practical terms was that both trailAddiction AND Trans-Savoie Ltd had been left decimated by the actions of the administrators. They maintain that due process was followed and that all their actions were only in the best interests of the creditors.
Even though Trans-Savoie could have been, on paper at least, returned to the control of the directors since it was never insolvent in the first place - by that point its cash reserves had been emptied by the administrators themselves, and the company through which it arranged all its holidays and events in France (trailAddiction Ltd) had been liquidated and all staff had been laid off, assets and equipment liquidated, customers let down, reputation ruined, etc. It was simply not possible to revive the company in practical terms, from this derelict position, at this time.