2019 Retailers in trouble thread
Discussion
hutchst said:
You're deliberately conflating putting together the pre-pack deal with selling the business.
My point is simple, that the pre-pack part of the deal is done in secrecy, by a party engaged by some, but not all, of the creditors, and when that deal has been reached, the insolvency then takes place and the 'arranger' then gets appointed formally, and then from that point on has a legal duty to all the creditors.
Who do you believe is disadvantaged versus the alternatives ?My point is simple, that the pre-pack part of the deal is done in secrecy, by a party engaged by some, but not all, of the creditors, and when that deal has been reached, the insolvency then takes place and the 'arranger' then gets appointed formally, and then from that point on has a legal duty to all the creditors.
Alpinestars said:
What you’ve observed is the continuation of the business. A key part of the administrator’s role. Otherwise there would be no need for administrations, as liquidations are there to cater for burials. Administrations revive, liquidators bury. Administrations were brought in so that business could continue. Ie, exactly what you’re describing.
Thanks, understood. I think the frustration felt by many people left as a creditor is that whilst that business can continue and its rescue is often trumpeted as “saving” x number of jobs, no attention is paid to all the other companies who have suffered as suppliers to the rescued business. How many jobs are lost down the supply chain because of the failure? They don’t get a look in. It’s ok to say ALL creditors interests are taken into consideration, but it always seems to be HMRC, the banks and the practitioner’s fees (always very reasonable
) which are paid and then anyone left might be lucky to get a penny in the pound in five years time. Not sure what an alternative system would be though! RicksAlfas said:
Thanks, understood.
I think the frustration felt by many people left as a creditor is that whilst that business can continue and its rescue is often trumpeted as “saving” x number of jobs, no attention is paid to all the other companies who have suffered as suppliers to the rescued business. How many jobs are lost down the supply chain because of the failure? They don’t get a look in. It’s ok to say ALL creditors interests are taken into consideration, but it always seems to be HMRC, the banks and the practitioner’s fees (always very reasonable ) which are paid and then anyone left might be lucky to get a penny in the pound in five years time. Not sure what an alternative system would be though!
That isn’t always the case I think the frustration felt by many people left as a creditor is that whilst that business can continue and its rescue is often trumpeted as “saving” x number of jobs, no attention is paid to all the other companies who have suffered as suppliers to the rescued business. How many jobs are lost down the supply chain because of the failure? They don’t get a look in. It’s ok to say ALL creditors interests are taken into consideration, but it always seems to be HMRC, the banks and the practitioner’s fees (always very reasonable
) which are paid and then anyone left might be lucky to get a penny in the pound in five years time. Not sure what an alternative system would be though! Suppliers are often kept whole or less compromised than others especially in businesses where continuation of supply is key
I may yet be proven to be wrong but I would guess that M&P’s supply chain has not been left high and dry in this deal
Retention of title is also key to remember
hutchst said:
Alpinestars said:
No no and no.
An administrator is appointed to make the sale. Directors no longer have control over the running of the company. And the administrator must do all the things I previously set out. An administrator is lined and, but not appointed earlier, so that there’s no damage to the business. This doesn’t change the purpose of the admin, or his role and duties.
You're deliberately conflating putting together the pre-pack deal with selling the business.An administrator is appointed to make the sale. Directors no longer have control over the running of the company. And the administrator must do all the things I previously set out. An administrator is lined and, but not appointed earlier, so that there’s no damage to the business. This doesn’t change the purpose of the admin, or his role and duties.
My point is simple, that the pre-pack part of the deal is done in secrecy, by a party engaged by some, but not all, of the creditors, and when that deal has been reached, the insolvency then takes place and the 'arranger' then gets appointed formally, and then from that point on has a legal duty to all the creditors.
Only certain people can appoint an administrator. Usually the directors if they are at risk of insolvent trading (where lots more people could lose money if they continued). So I assume you’re ok with it so far?
Or a creditor with a certain charge over assets, where there’s been a breach of the charge, much like your mortgage. Again assume you’re ok with that?
The value of the business is the open market value. No matter who appoints. Marketing is the phase of work prior to a pre pack - and it’s prior, so that it protects value. For all. The pre pack only executes the plan. The other creditors do not lose out as a result of the sale - in fact;
- they can bid for the business,
- they can challenge the valuation,
- the IP has a duty to get it right for them as well as other creditors.
Administration, and by extension, pre-packs, are there to realise the most money possible, and/or allow a business to continue trading. The alternative is liquidation, where creditors, especially the ones you seem to be worried about, would end up with even less money!
Which bit of all that causes you concern?
And how much experience do you have of insolvency, administration, or pre packs?
RicksAlfas said:
Thanks, understood.
I think the frustration felt by many people left as a creditor is that whilst that business can continue and its rescue is often trumpeted as “saving” x number of jobs, no attention is paid to all the other companies who have suffered as suppliers to the rescued business. How many jobs are lost down the supply chain because of the failure? They don’t get a look in. It’s ok to say ALL creditors interests are taken into consideration, but it always seems to be HMRC, the banks and the practitioner’s fees (always very reasonable ) which are paid and then anyone left might be lucky to get a penny in the pound in five years time. Not sure what an alternative system would be though!
The alternative is liquidation, unless you (one) believes the directors should be allowed to continue trading whilst insolvent, and disenfranchising even more creditors, or that someone who has lent on certain terms, can’t enforce when there’s a breach of those terms. I think the frustration felt by many people left as a creditor is that whilst that business can continue and its rescue is often trumpeted as “saving” x number of jobs, no attention is paid to all the other companies who have suffered as suppliers to the rescued business. How many jobs are lost down the supply chain because of the failure? They don’t get a look in. It’s ok to say ALL creditors interests are taken into consideration, but it always seems to be HMRC, the banks and the practitioner’s fees (always very reasonable
) which are paid and then anyone left might be lucky to get a penny in the pound in five years time. Not sure what an alternative system would be though! Of course people lose out. But the alternative of liquidation is always going to be worse. Including losing jobs for the insolvent company.
There are rules set out in the IA as to who gets paid in what order. Hence your observation;
- fixed charge holders get paid first
- fees next (although they will be underwritten where there’s no money after the above), and
- expenses, including tax incurred during the administration. You should note that tax liabilities that were there before admin, rank the same as any unsecured creditor.
Finally, to enter administration, an application has to be made to the court. So unless you’re saying, directors, banks, courts and IPs are colluding, there’s some good safeguards there.
It’s a truism to say that some people lose money because a business they “lent” to goes tits up.
Brooking10 said:
That isn’t always the case
Suppliers are often kept whole or less compromised than others especially in businesses where continuation of supply is key
I may yet be proven to be wrong but I would guess that M&P’s supply chain has not been left high and dry in this deal
Retention of title is also key to remember
Absolutely. Suppliers are often kept whole or less compromised than others especially in businesses where continuation of supply is key
I may yet be proven to be wrong but I would guess that M&P’s supply chain has not been left high and dry in this deal
Retention of title is also key to remember
But there will always be creditors that lose out. The clue is in the “insolvent” bit. People are not understanding the alternative.
Alpinestars said:
Jesus wept.
Only certain people can appoint an administrator. Usually the directors if they are at risk of insolvent trading (where lots more people could lose money if they continued). So I assume you’re ok with it so far?
Or a creditor with a certain charge over assets, where there’s been a breach of the charge, much like your mortgage. Again assume you’re ok with that?
The value of the business is the open market value. No matter who appoints. Marketing is the phase of work prior to a pre pack - and it’s prior, so that it protects value. For all. The pre pack only executes the plan. The other creditors do not lose out as a result of the sale - in fact;
- they can bid for the business,
- they can challenge the valuation,
- the IP has a duty to get it right for them as well as other creditors.
Administration, and by extension, pre-packs, are there to realise the most money possible, and/or allow a business to continue trading. The alternative is liquidation, where creditors, especially the ones you seem to be worried about, would end up with even less money!
Which bit of all that causes you concern?
And how much experience do you have of insolvency, administration, or pre packs?
None of that disproves anything that I posted, Only certain people can appoint an administrator. Usually the directors if they are at risk of insolvent trading (where lots more people could lose money if they continued). So I assume you’re ok with it so far?
Or a creditor with a certain charge over assets, where there’s been a breach of the charge, much like your mortgage. Again assume you’re ok with that?
The value of the business is the open market value. No matter who appoints. Marketing is the phase of work prior to a pre pack - and it’s prior, so that it protects value. For all. The pre pack only executes the plan. The other creditors do not lose out as a result of the sale - in fact;
- they can bid for the business,
- they can challenge the valuation,
- the IP has a duty to get it right for them as well as other creditors.
Administration, and by extension, pre-packs, are there to realise the most money possible, and/or allow a business to continue trading. The alternative is liquidation, where creditors, especially the ones you seem to be worried about, would end up with even less money!
Which bit of all that causes you concern?
And how much experience do you have of insolvency, administration, or pre packs?
hutchst said:
None of that disproves anything that I posted,
But what point are you trying to prove ?Of course creditors en masse don’t have a say in the process.
Of course specific creditors with appropriate charges do
You seem to be looking for some malevolence or connivance that simply doesn’t exist.
If it works for deals, why not roll it out for more!
eccles said:
I recently had to buy a new suit, and in the past, Marks and Sparks has been my first port of call. Went into my local fairly large branch and the selection was a fraction of what it used to be, with very limited sizes and totally disinterested staff when asking a few questions.
I bought my last suit in the same branch 8 years ago and it was a completely different experience.
Only one place to go if you want an off the peg suit..Slaters, and they will alter it FOC if required, otherwise a MTM option down Saville Row..but that might be expensiveI bought my last suit in the same branch 8 years ago and it was a completely different experience.
ninepoint2 said:
eccles said:
I recently had to buy a new suit, and in the past, Marks and Sparks has been my first port of call. Went into my local fairly large branch and the selection was a fraction of what it used to be, with very limited sizes and totally disinterested staff when asking a few questions.
I bought my last suit in the same branch 8 years ago and it was a completely different experience.
Only one place to go if you want an off the peg suit..Slaters, and they will alter it FOC if required, otherwise a MTM option down Saville Row..but that might be expensiveI bought my last suit in the same branch 8 years ago and it was a completely different experience.
The Li-ion King said:
ninepoint2 said:
eccles said:
I recently had to buy a new suit, and in the past, Marks and Sparks has been my first port of call. Went into my local fairly large branch and the selection was a fraction of what it used to be, with very limited sizes and totally disinterested staff when asking a few questions.
I bought my last suit in the same branch 8 years ago and it was a completely different experience.
Only one place to go if you want an off the peg suit..Slaters, and they will alter it FOC if required, otherwise a MTM option down Saville Row..but that might be expensiveI bought my last suit in the same branch 8 years ago and it was a completely different experience.
Robertj21a said:
Clintons looking at a possible CVA ?
Thank youI was looking for this thread and couldn't recall its actual name so put the same thing in the High Street thread
To be blunt I'm not that surprise as they seem a bit on the expensive side when compared to other shops. There is a local shop near to us that does well just selling cards. Independent cheaper than some of Clintons stuff and opens early doors till 8 at night.
I suspect her overheads are low but her approach is fantastic. She offers a gift wrap service you take your box of chocs / whatever in, choose a sheet you like and she wraps it.
techiedave said:
She offers a gift wrap service you take your box of chocs / whatever in, choose a sheet you like and she wraps it.
And there it is - the way that the high street will survive. By offering things that set small retailers apart from purveyors of tat like Clintons, or the big online guys. techiedave said:
Robertj21a said:
Clintons looking at a possible CVA ?
Thank youI was looking for this thread and couldn't recall its actual name so put the same thing in the High Street thread
To be blunt I'm not that surprise as they seem a bit on the expensive side when compared to other shops. There is a local shop near to us that does well just selling cards. Independent cheaper than some of Clintons stuff and opens early doors till 8 at night.
I suspect her overheads are low but her approach is fantastic. She offers a gift wrap service you take your box of chocs / whatever in, choose a sheet you like and she wraps it.
The backstory behind its salvation when it went bust under the original owner (whose son is the eponymous Clinton) 10 years or so ago doesn't work in today's market.
There's a Card Factory in just about every mall or precinct location there's a Clinton's and they are struggling too but not to such an extent while independents still have a place to play on the actual high street as you highlight.
Edited by anonymous-user on Sunday 10th November 22:28
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