John Brazier talks to John Alexander on retirement, fake jewel heists, and rewriting the rulebooks.
There’s no doubt that the UK’s insolvency profession is full of characters, but how many can claim to have had a lasting and tangible influence on the culture of the industry?
One who can is John Alexander, who at the end of March officially retired from both the firm Carter Backer Winter and formal insolvency work in general, after more than 30 years working across a broad spectrum of assignments.
Up close and personal
Alexander is never short of anecdotes, and some of the most arresting come from his experience in dealing with personal insolvency.
Take for example the bankruptcy of Darius Guppy, a former Bullingdon Club member who infamously attempted to defraud Lloyds of London through a fake jewel heist, as revenge for his father’s losses after the crisis at Lloyds in the early 1990s.
“He had allegedly taken some insured stones to New York, staged a robbery and claimed the insurance” Alexander recalls.
“Having been found guilty it was a case of ‘pay up or go to jail’, and he didn’t pay so of course he went to jail. As his trustee in bankruptcy, I negotiated a payment to cover the balance of time that got him out of jail. He kindly offered to give me an acknowledgement in his book, but I said ‘thank you very much but I’m not sure that’s the kind of publicity I want!’”
Fraud involving jewellery seems to be something of a speciality for Alexander, as he was also the trustee in bankruptcy for ‘Lady’ Rosemary Aberdour – who was jailed for using a fake title to obtain credit from several Bond Street jewellers, as well as stealing several million pounds from a charitable fund, in the early 90s.
Yet although these stories certainly make for good conversation, Alexander’s corporate insolvency history shows serious pedigree in both dealing with the complexities arising from large-scale business failure, and in leading the way for others to do the same.
A good example is the case of Arc Capital & Income, an investment firm which went into administration due to its exposure to Lehman Brothers-backed products. Alexander was appointed as an administrator to Arc in October 2009 and, after a prolong period of negotiation with the Financial Services Authority, proposed a solution that would allow Arc’s investors a better return than was at first hoped for.
“When Lehman Brothers collapsed, the FSA said the company had to cease trading and all investments be liquidated, as the investors in those particular bonds were only going to receive an estimated 25p in the pound. More importantly though, it was alleged there was mis-selling involved”, Alexander recalls.
“We managed to persuade the FSA that we could sell the business as a going concern, preserving the full value of the non-Lehman Brothers’ investments and ring-fencing the toxic products – which we did, so I think that was an unprecedented success. Until then they had no concept of how to deal with these kinds of financial services administrations, so we led the way and helped them rewrite the rulebook.”
The end result was the introduction of the Special Administration Regulations by the FSA in February 2011, which has since been deployed in the administrations of MF Global UK, Worldspreads, Pritchard Stockbrokers and Hartmann Capital.
Further back, Alexander was also appointed as receiver to the Rosehaugh Group, the property development company responsible for the Broadgate complex by London’s Liverpool Street station, when it fell into administration in 1992. The case was one of the largest property development administrations in UK history, to the extent that the Bank of England got involved in its unravelling.
“It was a very large company with major strategic property holdings in The City, so much so that when Barclays was considering appointing me as receiver they had to get permission from the Bank of England and write a paper to justify it” Alexander says.
“The Bank thought that if the world saw the story in the headlines there would be a run on the City – of course that never happened, but it was rather significant as it was the largest property collapse until that date.”
Behind the scenes
But it’s not just through casework that Alexander has made his mark. As well as formal appointment-taking, he has over 30 years of involvement with industry associations. Alexander has previously spent time as the chairman of the London region for R3, where he edited what is now the Recovery magazine and established the event that later evolved into the ‘Ladies Lunch’ – one of the most successful annual social events in the insolvency industry.
He was also on the ICAEW review committee for 12 years, taking the vice-chairman position for the last four. “We sat as a tribunal, and if it was an insolvency-related matter I would be chairing those hearings, so I got to see the other side of the insolvency profession, which had been criticised.
“We overturned some of the disciplinary committee’s decisions, we changed some of the rulings and we upheld some of them – but it was interesting to see the underbelly of the profession.”
Alexander is still heavily involved in regulatory and tribunal matters. He has been appointed to the Financial Reporting Council’s (FRC) Panel of Tribunal members who form the FRC Disciplinary Tribunals – setting up tribunals over audit work that throws up matters of public interest – and has been appointed by the ICAEW to a new committee regulating probate work.
As if that wasn’t enough, he has been accepted by the Cabinet Office to its panel of individuals approved to be considered suitable to sit as a Non-Executive Member on government Enhanced Departmental Boards.
While Alexander has decided to move on, he will have no shortage of opportunities to put his extensive knowledge to use.
By establishing the consultancy John Alexander Advisory, he will be able to put in practise the industry experience he has accumulated with companies such as CBW, PKF and KPMG, without taking on formal insolvency work.
“I have set up the new consultancy to advise professionals whose clients are in financial difficulties and who may be considering insolvency,” he says. “I’m not looking to make a big business out of it but a number of solicitors and accountants have said over the years that it would be really useful if they could call on me.”
Looking back on his career to date, Alexander reflects: “It’s been a lot of fun and very stimulating. I’ve enjoyed a lot of success and seen a lot of tears, as sadly that can be part of the process, but I have also worked with a huge number of really talented people and watched them develop, many of whom have become partners of the firms I have been with.
“So I believe I have, in what may be a very small field, had a significant influence and I am very proud of that.”
John Alexander CV
1984: Appointed partner at Thompson McLintock
1987: Present for the merger resulting in the creation of KPMG
1993: Joins PKF as head of insolvency
2002: Joins Carter Back Winter (CBW) as partner
2014: Retires from formal insolvency work and establishes John Alexander Advisory