Klempka’s retirement marks end of an era

AFTER more than 30 years in the business, Edward Klempka, insolvency partner at the Leeds office of accountants PricewaterhouseCoopers, is to retire.

His departure will mark the end of an era for the city as the Keighley-born chartered accountant is attributed to bringing significant changes to the role.

Speaking to TheBusinessDesk.com the day before his official leaving party Mr Klempka looked back on a career that has seen him run an impossibly diverse number of companies and put him in some distinctly “volatile” environments.

During our interview I quickly began to understand why he is much admired by colleagues (although he admits at times to upsetting the profession with his radical ideas and cutting-edge approach to administration). For Mr Klempka is somewhat of a maverick.

He’s also a risk-taker, creative thinker and a pioneer. Not attributes normally associated with insolvency practitioners but characteristics that those rising up the ranks aspire to thanks to his trail-blazing.

During a lengthy and highly successful career Mr Klempka has saved thousands of jobs, successfully sold hundreds of businesses out of administration and transformed a traditionally dull role into something altogether more “racy”.

“We are not a dirty word, but you only call an insolvency partner when you come unstuck. I’ve heard us called gravediggers before, but there’s so much more to the job than people think,” he says.

“We re-circulate opportunities by keeping businesses alive and moving assets to someone who can make more of them.

“No one ever talks about the businesses that have been rescued. You never read a headline saying 150 jobs saved in Huddersfield. But that’s what the job is about.”

Mr Klempka may have only been able to save one job out of 90 at his first insolvency appointment – a civil engineering firm in Bingley – but he remembers it fondly.

“It might have only been one job but he went on to build his business and employ others,” he recalls.

But the 58-year-old admits that he was frustrated with the more traditional approach to insolvency and decided to change it – radically.

“I thought it made sense to introduce some corporate finance activities into insolvency. At the time the focus was all on the creditors and getting debts paid off. No one looked at value or the cost saving that could be made by keeping the business going,” he explains.

“So we created a mergers and acquisition pre-pack and looked at preserving value. The basic principle was to look at finding a potential buyer and sorting out the finances several weeks before officially going into administration. If assets are not preserved you damage value, which makes a company very difficult to sell.

“The employees loved it, the banks loved it. There was some criticism from more traditional insolvency practices but it’s now a standard procedure.”

Mr Klempka is used to raising eyebrows. Although he trained as an accountant he didn’t think it was exciting enough. Insolvency proved to be quite different.

“You never know what to expect apart from poor or weak management and little or no paper work,” he laughs.

“It’s never boring saving a business.”

His anecdotes range from the sad to the bizarre and sometimes to the blatantly dangerous. He readily admits to enjoying stepping into hostile corporate environments where tempers are frayed, insults are flying, and the paper is literally peeling off the walls.

“I can remember going to one farm and asking the police if they could remove the farmer’s 23 shotguns,” he tells me.

“I was lucky as his gun licence had expired. He wasn’t exactly happy to see administrators at his door!”

The tale of the Costa Classica is even more esoteric.

“I was called in to a ship builder in Liverpool. I went there knowing that there were around 3,000 workers who knew that as soon as they stopped building the ship their jobs were gone.

“The firm had been contracted to build the middle of an ocean-going liner, but the two ends never turned up and they were left with what was effectively a tin can. It was ridiculous. We looked at a number of solutions including using it as a bombing practice target but in the end it went for scrap.”

When asked what skills make for a good insolvency partner Mr Klempka, who is of Polish descent, is unreserved in his response.

“Tenacity, you need that to find a solution, gut instinct and good luck. The job also requires creativity.”

His proudest moment is when he got Leeds United chairman Ken Bates to agree to give 500 season tickets to the children of Leeds for life as part of the deal to rescue the club.
“It’s one of the best legacies I’ve brokered,” he smiles.

But Mr Klempka is leaving his own legacy. It’s not without irony that the insolvency partner is retiring at what is fast proving a golden age for administrators. Indeed, he reveals that the department’s workload has increased between 20% and 30%. 

He is typically ebullient about the economic downturn believing that recovery will be swift so long as the media change their negative tact.

“The media talked us into recession and they can talk us out of it,” he says.

“It’s all about confidence now. If we can’t get the economy to recover with such a low rate of interest and inflation, then heaven help us.”

He’s also proud of the city’s reputation – deserved he says because of the wealth of talent it harbours.

Although his career will officially end in December, traditional retirement is out of the question. As well as focusing on his other passion – collecting stamps and letters containing snatches of recent history – he has two or three “irons in the fire”.

“I am looking at starting my third career,” Klempka laughs (he initially trained as a radiographer before becoming an accountant).

“I can’t say more than that but it will be in a growth business. It’s something I’ve always wanted to do.”

Do you have any memories or stories of Edward Klempka’s work? Add them below.