Tiphook
Encyclopedia
Tiphook plc was a United Kingdom
headquartered transport
services company, registered on the London
and New York
stock market
s, which became the world’s second largest marine container leasing business in the 1990s. The Company was once a constituent of the FTSE 100 Index
.
After a debt-fuelled buying spree in the late 1980s, it crashed in the early 1990s after accounting changes brought about by its expansion into North America
brought about a technical and then actual default in its debt coverage.
from school, and then ran his father's transport business.
ised based transportation systems. This resulted in customers and transport companies requiring more flexible business solutions, resulting in Tiphook having two basic service offerings:
They supplemented this initial model with value-added services including maintenance and trans-border clearance.
Tiphook grew quickly by acquisition, buying companies by issuing new shares and taking on their existing debt. Such purchases included that of Barclays Bank owned Trailerent Ltd in 1989, which was referred to the Competition Commission
. This method of expansion resulted in high levels of debt, assured to lenders through assets on Tiphook's balance sheet.
by US-based shareholders, as the published accounts were now in doubt.
There also followed revelations about Montague's lifestyle, including the fact that as well as buying company shares using loans from the company itself, he had 24-hour access to both a chauffeur-driven Bentley
and a Hawker Siddley HS124
corporate jet.
Tiphook and its directors, which included Charles Powell
, came under severe shareholder pressure. The company resultantly agreed to reduce its debts by selling off its profitable containers business, eventually to Transamerica Corporation
in February 1994 for $1.1Bn/£700M. It appointed former BOC finance director Ian Clubb as its new chairman in mid-1994 to bring stabalisation and renamed itself Central Transport Rental plc. Montague was forced to resign in December 1994, which resolved the class action.
and renamed International Wagon Services Ltd. In 1998 it was purchased by GE Equipment Services
to form part of its pan-European rail services business Cargowaggon
.
The residual company branded as Tiphook Trailers, which by 1997 operated a fleet of 22,500 trailers at 132 depots in nine European countries, was sold in 1997 to GE Capital
, merged with its existing TIP Trailer Services rental and leasing company.
Montague was declared bankrupt. After release from his legal obligation, in 1995 he started pan-European transport equipment leasing company Axis, which he folded in 2004 into the later AIM-listed Intermodal Resources. This company is now known as Sea-Axis.
In light of Tiphook and the Robert Maxwell
scandal at the Daily Mirror, the UK Government introduced the earliest stages of legislation covering corporate governance
.
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
headquartered transport
Transport
Transport or transportation is the movement of people, cattle, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The field can be divided into infrastructure, vehicles, and operations...
services company, registered on the London
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
and New York
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
stock market
Stock market
A stock market or equity market is a public entity for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.The size of the world stock market was estimated at about $36.6 trillion...
s, which became the world’s second largest marine container leasing business in the 1990s. The Company was once a constituent of the FTSE 100 Index
FTSE 100 Index
The FTSE 100 Index, also called FTSE 100, FTSE, or, informally, the footsie , is a share index of the 100 most highly capitalised UK companies listed on the London Stock Exchange....
.
After a debt-fuelled buying spree in the late 1980s, it crashed in the early 1990s after accounting changes brought about by its expansion into North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...
brought about a technical and then actual default in its debt coverage.
Background
Born in 1948, Robert Montague joined EssoEsso
Esso is an international trade name for ExxonMobil and its related companies. Pronounced , it is derived from the initials of the pre-1911 Standard Oil, and as such became the focus of much litigation and regulatory restriction in the United States. In 1972, it was largely replaced in the U.S. by...
from school, and then ran his father's transport business.
Business model
Montague founded Tiphook in 1975, and later became company chairman. It took advantage of the change in global transport practises, from the 1960s of loose cargo, to the 1980s of ISO-based intermodal containerIntermodal container
An intermodal container is a standardized reusable steel box used for the safe, efficient and secure storage and movement of materials and products within a global containerized intermodal freight transport system...
ised based transportation systems. This resulted in customers and transport companies requiring more flexible business solutions, resulting in Tiphook having two basic service offerings:
- Supply of leased ISO containers
- Supply of leased trailers, both road and railway
They supplemented this initial model with value-added services including maintenance and trans-border clearance.
Tiphook grew quickly by acquisition, buying companies by issuing new shares and taking on their existing debt. Such purchases included that of Barclays Bank owned Trailerent Ltd in 1989, which was referred to the Competition Commission
Competition Commission
The Competition Commission is a non-departmental public body responsible for investigating mergers, markets and other enquiries related to regulated industries under competition law in the United Kingdom...
. This method of expansion resulted in high levels of debt, assured to lenders through assets on Tiphook's balance sheet.
Difficulties and collapse
Tiphook owned most of its assets: mainly containers and road trailers. As the popularity of containers increased, their cost of manufacture dropped to around $2,000 per 40ft ISO unit. This was below the asset value logged on Tiphook's book, which resulted in a technical default in Tiphook's loans under US Accountancy laws. This resulted in a proposed class actionClass action
In law, a class action, a class suit, or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued...
by US-based shareholders, as the published accounts were now in doubt.
There also followed revelations about Montague's lifestyle, including the fact that as well as buying company shares using loans from the company itself, he had 24-hour access to both a chauffeur-driven Bentley
Bentley
Bentley Motors Limited is a British manufacturer of automobiles founded on 18 January 1919 by Walter Owen Bentley known as W.O. Bentley or just "W O". Bentley had been previously known for his range of rotary aero-engines in World War I, the most famous being the Bentley BR1 as used in later...
and a Hawker Siddley HS124
British Aerospace BAe 125
The British Aerospace 125 is a twin-engined mid-size corporate jet, with newer variants now marketed as the Hawker 800. It was known as the Hawker Siddeley HS.125 until 1977...
corporate jet.
Tiphook and its directors, which included Charles Powell
Charles Powell
Charles Edwin Powell is an American actor, known for his roles as himself on Popular Mechanics for Kids and as President Harold Bates on 15/Love.-Biography:...
, came under severe shareholder pressure. The company resultantly agreed to reduce its debts by selling off its profitable containers business, eventually to Transamerica Corporation
Transamerica Corporation
Transamerica Corporation is a holding company for various life insurance companies and investment firms doing business primarily in the United States. It was acquired by the Dutch financial services conglomerate AEGON in 1999.-History:...
in February 1994 for $1.1Bn/£700M. It appointed former BOC finance director Ian Clubb as its new chairman in mid-1994 to bring stabalisation and renamed itself Central Transport Rental plc. Montague was forced to resign in December 1994, which resolved the class action.
Aftermath
In May 1996, Tiphook Rail was sold in a management buyoutManagement buyout
A management buyout is a form of acquisition where a company's existing managers acquire a large part or all of the company.- Overview :Management buyouts are similar in all major legal aspects to any other acquisition of a company...
and renamed International Wagon Services Ltd. In 1998 it was purchased by GE Equipment Services
GE Equipment Services
GE Equipment Services is a Stamford, Connecticut-based division of General Electric Industrial, providing transport solutions for supply chains, including equipment leasing, asset management, and logistics services....
to form part of its pan-European rail services business Cargowaggon
Cargowaggon
GE Rail Services is a European railway services company owned by GE Capital and headquartered in Amsterdam, Holland.-History:...
.
The residual company branded as Tiphook Trailers, which by 1997 operated a fleet of 22,500 trailers at 132 depots in nine European countries, was sold in 1997 to GE Capital
GE Capital
GE Capital is the financial services unit of General Electric, one of five major units. Its various divisions include GE Capital Aviation Services, GE Capital Real Estate, GE Energy Financial Services and GE Money....
, merged with its existing TIP Trailer Services rental and leasing company.
Montague was declared bankrupt. After release from his legal obligation, in 1995 he started pan-European transport equipment leasing company Axis, which he folded in 2004 into the later AIM-listed Intermodal Resources. This company is now known as Sea-Axis.
In light of Tiphook and the Robert Maxwell
Robert Maxwell
Ian Robert Maxwell MC was a Czechoslovakian-born British media proprietor and former Member of Parliament , who rose from poverty to build an extensive publishing empire...
scandal at the Daily Mirror, the UK Government introduced the earliest stages of legislation covering corporate governance
Corporate governance
Corporate governance is a number of processes, customs, policies, laws, and institutions which have impact on the way a company is controlled...
.