The Failure of Challenger
The recent (2008) announcement that Challenger Syndicates had called in the receivers is, of course, very bad news for all those connected with the company. It is not good for those in their employ, the proprietors, the customers and, of course, those who find themselves owed money by the company and, presumably now will not be paid. I guess that the exact breakdown of these figures will come out in the end, but right now I would suggest it runs in to many thousands of pounds.
If one takes a step back from the make-up of the personalities involved one can only say that Ed and Gill Rimmer tried, and tried very hard with their business. They were regulars at more or less every national trade show within the waterways industry manning one stand or another. The cost of appearing at these shows is considerable, and I would suspect on occasions the return was negligible, nevertheless they always came back for more. Also they had their own open days which were generally held outside, often in quite inhospitable weather and, having done similar events, I can tell you that when you are freezing to death and looking at a handful of visitors it can be most soul destroying. Yet, you dust yourself down (or warm yourself up) (or, in the case of Gill Rimmer, who was unfortunate to fall in the canal at one such event, dry yourself off (the rumours that for months she was called Gill Swimmer were never founded)) and get up and go back to fight the good fight again.
Then of course there were their glossy brochures, and their mailings and their adverts in the magazines. All of these have costs that need to be paid, all of these show a level of commitment. A full page in most of the Waterways magazines is around £600.00 per month.
So, whilst one might now look back and say they got it wrong, they certainly showed a level of commitment that perhaps cannot be faulted.
Of course there were those, myself included, that felt that the way they tried to hold their cards very close to their chest regarding their company was close to paranoia. Stories about of people being told to remove web sites they had written, and not post to any message boards for fear of recriminations, abound. I guess if they (the Rimmers) themselves felt more comfortable with that and that was their way then so be it. Of course as an outsider, after seeing the way it was run, you did not have to join, but then I guess that was not always made apparent until you had handed over you money.
If one looks at the business as a whole, there would have been two forms of income. The first would be the income from managing the boats. Lets say this was £250 per share over 12.5 owners per boat times 27 boats, or say £84,000 per year. Out of this comes all the overheads in running the business. Items such as post, telephone, staff costs, web sites (they did not write their own) heating, advertising, general office overheads, lighting etc. etc. etc, (and I appreciate they ran it from their home) Quite simply it probably was not enough.
BUT there is another side to this business, the sales of the shares. THAT is where you CAN make some money and use the profit from that to keep the other side going (and growing) until it breaks even. Lets make no mistake about it, the mark up on Challengerís shares was substantial, and let me also be the first to say that I do not see anything necessarily wrong in that, if the customers were prepared to pay it then so be it. The customers, at the end of the day, DID have a choice.
My guess is that the sale of shares slowed down to such an extent that the revenue it generated dwindled away and as such the company ceased to be solvent anymore. Equally I would suspect that certain boats may well not have been paid for (or at least the purchase was funded by third parties who needed to be paid), and the company could not meet its commitments.
But, all of the above is my reading between various lines, and NONE of it should be considered as fact.
POST SCRIPT - and the facts did come out and it seems the company were using old syndicate boats to try to form a hire company and these boats were then being sold to "investors" more than once - in one case the same boat is thought to have been "owned" by three people...
Some people have made comments about my views and these may be found here
Footnote (1) - from Narrowboatworld
Challenger director faces criminal charges
Wednesday, 29 September 2010 08:15
CHALLENGER'S Ed Rimmer appeared in court yesterday (Tuesday 28th September) to face 35 fraud-related charges, writes Allan Richards.
Charles Edward Stuart Rimmer (known as Ed Rimmer), aged 65, of Sheriffs Lench near Evesham, appeared before Worcester Magistrates to face:
8 counts of fraud by abuse of position of trust
9 counts of obtaining a money transfer by deception
11 counts of fraud by false representation
4 counts of false accounting
4 counts of theft
Ed Rimmer owned and ran two boating businesses. He was a partner at Challenger Syndicateships and a director of Challenger Syndicateships Ltd, until January 2008 when both businesses fell into administration.
Rimmer was arrested on 2nd June 2010 and questioned by West Mercia Police in relation to his business activities, charged on Tuesday 14th September and bailed to appear at court.
He was released on court bail until 23rd November when he will again appear before Worcester Magistrates where the matter will then be committed to the Crown Court.
It is understood that his wife and fellow director, Gill Rimmer was too ill to be questioned by police.
Gill Rimmer died in June 2011
Ed Rimmer was sentenced to 2 1/2 years in prison for fraud in September 2011, and is now out of prison.