Red Driving school for sale as it goes into administration!

Finally after many weeks/months of rumours flying about, it has been confirmed by the BBC, that red driving school has gone into administration, and the business is now up for sale due to lack of funding and investments.



LVG Ltd which is the parent company and has many divisions including instructor college, FTBC accountants, ADI news and red driving school was placed into administration yesterday and MCR the administration company says it is confident a buyer will be found.

Well with the recent bad publicity that the red driving instructor training operation which accounts for more than 80% of LVG's annual turn over, and the fact that their business model is fundamentally flawed and the recession bubble which they have been capitalising on has burst, I'm not very optimistic this will be the case, and my thoughts are with the many hundreds of people who have taken out barclays loans for training which they might never get!

I also wonder what will become of the instructors who have taken out driving school franchises on training, and the future of the fully qualified ADI's who might now have to start looking for a new school!

Then there are the many people who left comments on my becoming a driving instructor post who are trying to get out of a financial contract because they were mislead into ADI training either by the £30,000 carrot or a pussy salesperson.

I will be following the LVG ltd situation closely over the coming weeks, but I'm not very hopeful for the 400 plus employees, as when I first posted about the red driving school back in june 2006, I never thought that it will all be ending this way with administrations being called in!

Latest Update: Buyer found for red driving school

Red on BBC one programme.

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13 comments:

  1. This comment has been removed by the author.

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  3. Wide Dave3:46 pm

    The real tragedy of all this is that it was entirely, completely foreseeable.

    You take a lot of money from a lot of wide eyed innocents who don't know what they are getting into, hand it to the TV companies and directors,then pull a face when those people you've taken the money from start complaining about the training you can't afford to give them or the fact that they weren't told even a reasonable amount of the truth about what it takes to qualify.

    There should be a system in cases like this where a company is set up specifically in order to rip off a high percentage of customers whereby the directors are made to pay and not just financially either.

    The amount of harm those people have done to a large proportion of their customers in terms of financial hardship should really warrant a prison sentence. On one forum I described them as 'scum in suits'.

    I stand by those words.

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  4. Anonymous3:46 pm

    Without the instant close No-money-needed facility (i.e. the Barclays online point of sale buy-now-pay-later loan option) the company probably found it was more difficult to sell every man and his dog a driving instructor training course as before and so sales rapidly died away. No doubt this facility was probably withdrawn for very good reason following a lot of complaints of alledged mis-selling.

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  5. Anonymous3:55 pm

    Its starting to look more like a phoenix operation where all the assets have been transferred to Driving Results limited and most of the £ million's pounds worth of debts have been left behind in LVG limited which may now gradually go into liquidation. A very smart approach; as to rescue Red/LVG limited with all its liabilities would have taken a lot more money. It also protects anyone paying money into Red as it will now go to this new company and not to the creditors of the old one. What a great way to write off a lot of debt! Potentially bad news though if you are a creditor of LVG. If my assumptions are correct hopefully as part of this move the ten of thousands of Red driving instructor training students who have paid but not received training will have been seen as preferred creditors and also transferred into this new company.

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  6. My wife to be opened a barclays account for me to start training as an ADI, red did not come up with the goods, barclays still want their money, cos they paid red immediately for the course, and now barclays have put red in administration as well! don't think barclays are getting any money out of us!!

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  7. Anonymous9:32 pm

    It's up to you what you do about your training and the finance but it wouldn't be a good idea to just ignore it if that is what you are planning to do.

    Red have now been brought out of administration so you might need to talk to them about what will happen next. If Barclays still want the money then it might be a good idea to see Citizen's Advice or a solicitor if only to see where you stand legally.

    Best of luck.

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  8. Anonymous9:32 am

    Red a trading name of LVG limited haven't been brough out of Administration as such the company LVG limited is still in Administartion and will no doubt move into liquidation at some point following a £2.2 million pound loss and a drop of about £4 million in driving instructor course sales in the last 16 weeks of trading. The Red operation accounted for over 96% of LVGs business (based on the last published accounts) and the assets of this operation (i.e. not the liabilities) have been bought by Kelso and put into Driving Results limited to start afresh without any debt to now hinder them.

    What a great way to write off a lot of debt and obtain the benefit of million pounds of effectively free advertising! Potentially bad news though if you are a creditor of LVG/Red. Unfortunately this puts the 10,000 or so active driving instructor training course students of Red at the mercy of the new Company and the transfer of any legal rights in respect to the orginal promises made or the training offered is now solely down to the discretion of new Red company Driving Results Limited. Unfortunately, those on the Anti Red Facebook group seeking refunds and in some cases facing crippling debt as a result of buying into the become a Red driving instructor dream are now in an even weaker position as the new company has no legal responisibiliies in regards to the old company.

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  9. Anonymous8:41 am

    The information fed to the BBC about the Administration of LVG/Red now appears to have been mostly spin. This is what I think.

    The first BBC article that appeared on 18th February entitled “Red Driving School's parent firm in administration” gives the impression that Red was profitable and it was the parent company LVG that was in difficulty. However, as Red makes up 96% of the business of LVG (according to its last published accounts 90% driving instructor course sales and 6% driving school sales) it is far more likely that the Red operations was to blame. The company had lost £2.2 million pounds in the last 16 weeks of trading and when you compare the sales from the previous year you can see they were down by about £5 million for an identical period, hence it is quite likely it was this massive drop in Red driving instructor course sales that resulted in this lose and ultimately the real demise of the Company.

    I would also like to comment upon the inaccuracies of the following two statements published by the BBC when it reported the company had been bought out of administration on Monday 22 February 2010.

    “LVG, the parent company of driving instructor business Red Driving School, has been bought just days after going into administration.”

    LVG was not bough out of administration. It is in fact still in receivership owing over £6 million to its creditors (source LVG creditor). The company wasn’t rescued as such the directors/shareholders planned for the assets only to be on sold. These assets were purchased by Kelso Place and put into a new company called Driving Results limited with most of the liabilities being left behind in LVG in what is known in the insolvency world as a Pre-Pack sale. See link below for full explanation.

    http://www.lindermyers.co.uk/article.asp?id=846

    It is a pity when the BBC first published a story about this on the 18th February the true nature of the proposed transaction wasn’t accurately reported (i.e. that the assets of LVG, 96% of which was Red was for sale and that offers had to be made to MCR by 12 noon Friday 19th February at the latest). Had this occurred other interested parties within the industry may have been able to bid a higher and a fairer price for the assets and therefore may have achieved a better outcome for the creditors.

    “The firm told the BBC it had full confidence in LVG's management and had no plans for any redundancies.”

    On the same day that the deal was concluded (i.e. 19th February) LVG issued 80 redundancy notices and because the company had no money the 80 people also became creditors of the company. Source Anti-Red driving school Facebook group and Reds own trade magazine ADI News in the March issue.

    Well if Red fails again the management could definitely find jobs in politics with their ability to spin a story.

    The future for the tens of thousands of students who have bought Red driving instructor training courses is still not clear. Neither the receivers of Red/LVG or indeed the new company have contacted the students to officially explain in writing what rights they now have, if any. Although unofficially the new Red company are still providing training to students of the old Red company if you contact them.

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  10. Not all driving schools are heavily reliant on driving instructor training to be sucessful.

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  11. Anonymous5:01 pm

    red driving school only care about ££££,s and not anything else . They are heavily involved in using sales people after making most of staff redundant.....shame on them..The person selling the job probably is not and has never been a driving instructor...strange if its such a good job

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  12. Anonymous5:06 pm

    -Red, driving results whatever you call them are owned by Kelso place asset management and are a ruthless company +wielding+ the axe and making the driving school attratctive to sell on.Sales force are shocking with their inflated potential earnings and expectations

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  13. Hi i am not here to go into right or wrongs of red , i would just like to point out that at the end of 2007 i paid in full for a instructor course at the instructor college in Bristol , i was only able to attend 2 half days then due to personal circumstances i was not able to carry on until now (feb 2012) after trying to contact the college i found out red had taken the students so i rang them to explain i had paid and wished to complete the course and to my shock it was reactivated immediatly with no hesitation and i have my 1st driving session this sunday, as said im not defending but also i am not condeming as so far so good !
    regards David

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