Page 37 - Stakis A Case Study

In March 1991 a "bank standstill" was arranged for one year
and then for a second, whereby the banks received interest

payments but not the principal sums still owing.

From outside the business the operation of the separate

divisional offices came in for criticism. It was felt that there

was a lack of central control and it was also thought that the

new managers appointed when Andros took over never

blended with the old generation. It was rather unkindly

asserted by one financial commentator that the divisional
head offices were:

"all firing illiterate memos at each other".

The expansion programmes proved expensive and were

not well co-ordinated. Unfortunately, the Country Court

Hotels came into operation just as people stopped

travelling because of the recession. Moreover, although 16

nursing homes were open and operating this was not yet a

large enough base to justify the training programmes and

standard setting systems.

Both developments required maximum cash at a time

when the recession had deepened. Moreover, there was

less opportunity to realise assets. Debt had increased from