Carrilion in trouble

[gooner1]

Brave Fart said:

Perhaps they suspected that Carillion wasn't viable, or maybe Carillion management convinced them otherwise, or perhaps Carillion's management lied to everyone - who knows? Certainly not me or you gooner1.
It's not relevant, because PWC's terms of engagement weren't "send up a red flare if needed!", but were "if Carillion fails, how might the pension fund be protected?" (BHS showed us how wrong it can go).
You're targeting the wrong people gooner1. Or could it be that you (like Eccles, Tonker, and Crankedup) misunderstand the role of both PWC and KPMG, and/or don't understand insolvency law, and/or are simply prejudiced against "fat cat accountants"? Probably not, you're a sharp mind I'm sure, but there is a lot of uninformed biased guff being spouted on this thread.

I freely admit that I don't understand insolvency laws, or a host of
other associated stuff. But that won't stop me asking questions and hopefully learning
from those that do understand these things.
Which leads me on to my next possibly stupid question
What was PWC's finding re Carillions possible collapse and the Pensions?

[Otispunkmeyer]

Henners said:

The average is not massively helpful.

When I’ve dealt with their ilk the bodies on the ground weren’t paid anything amazing (good but not that good), that £12.5k will be swayed by some very hefty partner fees I bet.

Eta: snap above

Yeah, when the place I worked at went down. They sent 3 senior partners over to explain stuff and then they were never seen again. A small team of graduates did all the donkey work.

Then their bill came to just about the same amount of money they could liquidate from the company. And they were, of course, first in line.

A lot of people held out for something. I knew right away we'd get zip. Just filled in the form to the government for redundancy pay and just forgot about it. I do feel for one chap though, he was owed nearly £100k for design work supplied and he got £0.

The outcome would have been identical had nothing been done and the owners were left to run away with what was left. The only difference is an accounting firm walked off with it instead! lol

Depends how well you thought of the guy running the place/owner though. I think for most, they'd have rather seen the accounting firm clean him out than let him walk off into the sunset.

[ClaphamGT3]

gooner1 said:

I freely admit that I don't understand insolvency laws, or a host of
other associated stuff. But that won't stop me asking questions and hopefully learning
from those that do understand these things.
Which leads me on to my next possibly stupid question
What was PWC's finding re Carillions possible collapse and the Pensions?

Not sure that was ever made public. Don't forget that the trustees of a company pension scheme are required to treat the pension as separate from the corporate entity(ies) and to act in the best interests of the pension fund in their direction of it. As I understand it, PWCs brief was to advise the trustees on the sufficiency of the corporate entity's contributions to the fund to meet its long-term obligations

[Alpinestars]

gooner1 said:

Brave Fart said:

Perhaps they suspected that Carillion wasn't viable, or maybe Carillion management convinced them otherwise, or perhaps Carillion's management lied to everyone - who knows? Certainly not me or you gooner1.
It's not relevant, because PWC's terms of engagement weren't "send up a red flare if needed!", but were "if Carillion fails, how might the pension fund be protected?" (BHS showed us how wrong it can go).
You're targeting the wrong people gooner1. Or could it be that you (like Eccles, Tonker, and Crankedup) misunderstand the role of both PWC and KPMG, and/or don't understand insolvency law, and/or are simply prejudiced against "fat cat accountants"? Probably not, you're a sharp mind I'm sure, but there is a lot of uninformed biased guff being spouted on this thread.

I freely admit that I don't understand insolvency laws, or a host of
other associated stuff. But that won't stop me asking questions and hopefully learning
from those that do understand these things.
Which leads me on to my next possibly stupid question
What was PWC's finding re Carillions possible collapse and the Pensions?

Still in progress but pricing and cash flow. That's not our job though. It's to liquidate the companies, with the overall objectives of realising as much as possible for creditors, but in this case, more importantly, the orderly sale of companies, especially where public services are involved.

[Alpinestars]

Otispunkmeyer said:

Henners said:

The average is not massively helpful.

When I’ve dealt with their ilk the bodies on the ground weren’t paid anything amazing (good but not that good), that £12.5k will be swayed by some very hefty partner fees I bet.

Eta: snap above

Yeah, when the place I worked at went down. They sent 3 senior partners over to explain stuff and then they were never seen again. A small team of graduates did all the donkey work.

Then their bill came to just about the same amount of money they could liquidate from the company. And they were, of course, first in line.

A lot of people held out for something. I knew right away we'd get zip. Just filled in the form to the government for redundancy pay and just forgot about it. I do feel for one chap though, he was owed nearly £100k for design work supplied and he got £0.

The outcome would have been identical had nothing been done and the owners were left to run away with what was left. The only difference is an accounting firm walked off with it instead! lol

Depends how well you thought of the guy running the place/owner though. I think for most, they'd have rather seen the accounting firm clean him out than let him walk off into the sunset.

Are you sure you understood the position? Insolvency practitioners are not first in line. There's a waterfall, broadly;

Fixed charge - most senior lenders
Expenses - to run the process, including IP fees
Prescribes part - certain creditors
Floating charge
All other creditors - usually the pence in the pound description.
Shareholders.

[crankedup]

Brave Fart said:

crankedup said:

Another swift kick in the bks for the small people owed money by Carillion. Shareholders sucked in with the lure of big divi’s, still that’s all part of the game, it’s the small businesses that are hit hardest. Carillion, st from end to end.

Hold on a minute, it's the shareholders who have seen their shares become worthless! Yes there is pain for creditor suppliers, but they could have taken out insurance against default if they were that worried. If you're going to feel sorry for anyone, it should not be investors or businesses that knowingly took risks, it should be the employees who've lost their jobs.

Yes shareholders obviously have lost thier cash value in thier shares, what I was trying to express was that Carillion were paying out large dividends to shareholders prior to the collapse of the Company. Akin to a fat juicy early morning worm to a bird. I have no sympathy for shareholders, as I said in my post that you have responded to ‘ it’s all part of the game’.
Shareholders win some/ lose some.
Employees I mentioned much earlier in the thread and yes I do have sympathy for them.

[crankedup]

anonymous said:

[redacted]

aka Tesco.

[crankedup]

FN2TypeR said:

crankedup said:

Another swift kick in the bks for the small people owed money by Carillion. Shareholders sucked in with the lure of big divi’s, still that’s all part of the game, it’s the small businesses that are hit hardest. Carillion, st from end to end.

How many of them were sucked in by promises of guaranteed returns?

There might be a case to answer if that happened, if not, it's tough titty really isn't it?

It most certainly is and I have no sympathy for shareholders, as I continue to mention, it’s all part of the game being a shareholder. You take the risks.
Good dividends are always a draw of course for longer term shareholders, any shareholder would have relied upon the Companies books and forecasts before buying in, or should have!
No such thing as promises when it comes to share price and dividends other than the here and now.

[Henners]

Where do you draw the line in responsibility? I'm thinking of those paying into pension funds which are known to not be so tip top and in the black?

[sidicks]

Henners said:

Where do you draw the line in responsibility? I'm thinking of those paying into pension funds which are known to not be so tip top and in the black?

Eh?

[crankedup]

Government Select com’ report out today. No surprises involved within the report regarding the Senior Management of the Company. Another SME owner lost 200k after working for Carillion, talks on the BBC news.
Auditors also received negative comment with strong suggestions that the ‘Big Four’ are to cosy within the corporation world and spitting the businesses should be considered.

[chunder27]

Some of the things I have read about this company beggar belief.

Literally bidding on stuff without a hope in hell of having the budget or staff to complete the jobs.

Using money received for one job to bid for other jobs before the original job has even been started!

Massive questions need asking about the way this company was run!

[Derek Smith]

crankedup said:

Government Select com’ report out today. No surprises involved within the report regarding the Senior Management of the Company. Another SME owner lost 200k after working for Carillion, talks on the BBC news.
Auditors also received negative comment with strong suggestions that the ‘Big Four’ are to cosy within the corporation world and spitting the businesses should be considered.

There's a fair bit in The Times on the matter. It's a shambles.

[Rovinghawk]

Has it been mentioned that PWC's new £500M building in Birmingham was being built by Carillion?

[crankedup]

chunder27 said:

Some of the things I have read about this company beggar belief.

Literally bidding on stuff without a hope in hell of having the budget or staff to complete the jobs.

Using money received for one job to bid for other jobs before the original job has even been started!

Massive questions need asking about the way this company was run!

Former Directors and CEO are still in complete denial that they have run the company so badly that it is receiving a roasting concerning virtually all aspects. For a Government Select Committee Member to say publically that the Senior Management were more interested in thier own financial positions than the Company that they were charged with running beggars belief.
Tesco of old accounting style. Hopefully those responsible will face sanctions, throwing up thier arms saying ‘not us’ isn’t enough.

[Blue62]

Surely it's time to accept that industry needs more regulation, not less. When businesses are given too much licence this is the result, it's greed and human nature.

[V8 Fettler]

crankedup said:

chunder27 said:

Some of the things I have read about this company beggar belief.

Literally bidding on stuff without a hope in hell of having the budget or staff to complete the jobs.

Using money received for one job to bid for other jobs before the original job has even been started!

Massive questions need asking about the way this company was run!

Former Directors and CEO are still in complete denial that they have run the company so badly that it is receiving a roasting concerning virtually all aspects. For a Government Select Committee Member to say publically that the Senior Management were more interested in thier own financial positions than the Company that they were charged with running beggars belief.
Tesco of old accounting style. Hopefully those responsible will face sanctions, throwing up thier arms saying ‘not us’ isn’t enough.

It's not a surprise though, is it? Capitalism, red in tooth and claw.

[steveatesh]

V8 Fettler said:

crankedup said:

chunder27 said:

Some of the things I have read about this company beggar belief.

Literally bidding on stuff without a hope in hell of having the budget or staff to complete the jobs.

Using money received for one job to bid for other jobs before the original job has even been started!

Massive questions need asking about the way this company was run!

Former Directors and CEO are still in complete denial that they have run the company so badly that it is receiving a roasting concerning virtually all aspects. For a Government Select Committee Member to say publically that the Senior Management were more interested in thier own financial positions than the Company that they were charged with running beggars belief.
Tesco of old accounting style. Hopefully those responsible will face sanctions, throwing up thier arms saying ‘not us’ isn’t enough.

It's not a surprise though, is it? Capitalism, red in tooth and claw.

Was it capitalism or just a combination of greed, ignorance and poor skills of the management team?

Personally I’m astonished that so much tax payers money was put into this company through bids and tenders without due diligence by the “customer” eg the government, national and local.

It’s not that long since my local (Labour) council entered into a partnership with Carrillion to develop some major sites in the city, including a plum city centre site.

The whole program has come to a juddering halt leaving the city centre site with a single semi built office block surrounded by chaos.

The lack of skill and ability is not just restricted to Carillion I’m afraid.

[RammyMP]

chunder27 said:

Some of the things I have read about this company beggar belief.

Literally bidding on stuff without a hope in hell of having the budget or staff to complete the jobs.

Using money received for one job to bid for other jobs before the original job has even been started!

Massive questions need asking about the way this company was run!

That’s common, I work in construction and all companies always tender for work and not have the staff to do them, you just recruited the team for the job if necessary. Expenses for one job is moved onto another as that one is in profit and the other loosing money.

Bidding for projects costs a lot of cash. A company I worked for a few years ago decided not to bid on the Liverpool royal job (which Carillion won) because it would cost £10m and they had a 1 in 4 chance on winning it.

[Welshbeef]

RammyMP said:

That’s common, I work in construction and all companies always tender for work and not have the staff to do them, you just recruited the team for the job if necessary. Expenses for one job is moved onto another as that one is in profit and the other loosing money.

Bidding for projects costs a lot of cash. A company I worked for a few years ago decided not to bid on the Liverpool royal job (which Carillion won) because it would cost £10m and they had a 1 in 4 chance on winning it.

Moving cost/over spend from one job to another....

fk me.

Surely anyone would want to understand the profitability of each and every job. Learn from mistakes or replicate good work. Masking evidently fk ups from history - or trying to cover ones arse in reality.

Sounds like ste management accountant at all levels and/or no teeth in the control part of management accountancy. Simply roll over to the operations “oh we always do this/don’t worry we will tuck that over spend away in the other job” no no no.