Woolworths administration costs
Discussion
So it's not all doom and gloom from the Woolworths going to the wall, the administrators (Deloitte) having recently added £5.5 million to their bill bring the total to £9.3 million. Guess how much the unescured creditors get? Nothing. Preferential creditors, which includes the administrators of course, can expect full payment.
Source Here
I know that it's a job that needs to be done but this just seems excessive. Another source that I read, but is subscription only so no point linking to it, said that there was £600k that could be dished out to unsecured creditors but Deloitte have applied to the courts to get out of doing so because "the administrators consider the cost of making a distribution of the prescribed part to unsecured creditors would be disproportionate".
Having been the victim of a company going into and out of a 'prepack' administration it really pains me to get the regular reports showing how much the administrators are getting whilst in the same report telling me I can expect to receive 1% of the money owed.
Source Here
I know that it's a job that needs to be done but this just seems excessive. Another source that I read, but is subscription only so no point linking to it, said that there was £600k that could be dished out to unsecured creditors but Deloitte have applied to the courts to get out of doing so because "the administrators consider the cost of making a distribution of the prescribed part to unsecured creditors would be disproportionate".
Having been the victim of a company going into and out of a 'prepack' administration it really pains me to get the regular reports showing how much the administrators are getting whilst in the same report telling me I can expect to receive 1% of the money owed.
OUr company is victim to bad debt a couple of times each month.
Weekly I get reports from liquidators concerning previously bust companies and weekly I get that sickening feeling and anger that it just isnt right.
I have never managed to get used to it and can never stop that feeling that there must be a better way to do it.
Weekly I get reports from liquidators concerning previously bust companies and weekly I get that sickening feeling and anger that it just isnt right.
I have never managed to get used to it and can never stop that feeling that there must be a better way to do it.
Come up with a better way then.
The liquidators/administrators/receivers actually have a very difficult job to do which - because of teh complex legislation involved (which they didn't create), takes time and specialist knowlesge - both of which are expensive.
Most of the legilstion surounding wind ups of companies is there to try and protect as manty of the creditors as possible.
The only alternative is to go for the European model - where the taxpayer pays for the winding up costs.
The liquidators/administrators/receivers actually have a very difficult job to do which - because of teh complex legislation involved (which they didn't create), takes time and specialist knowlesge - both of which are expensive.
Most of the legilstion surounding wind ups of companies is there to try and protect as manty of the creditors as possible.
The only alternative is to go for the European model - where the taxpayer pays for the winding up costs.
Eric Mc said:
Come up with a better way then.
The liquidators/administrators/receivers actually have a very difficult job to do which - because of teh complex legislation involved (which they didn't create), takes time and specialist knowlesge - both of which are expensive.
Most of the legilstion surounding wind ups of companies is there to try and protect as manty of the creditors as possible.
The only alternative is to go for the European model - where the taxpayer pays for the winding up costs.
Well the legislation should be simplified then because at the moment the only people protected are the staff (fair enough), the bank and the administrators. The liquidators/administrators/receivers actually have a very difficult job to do which - because of teh complex legislation involved (which they didn't create), takes time and specialist knowlesge - both of which are expensive.
Most of the legilstion surounding wind ups of companies is there to try and protect as manty of the creditors as possible.
The only alternative is to go for the European model - where the taxpayer pays for the winding up costs.
I know it's a difficult job but it just seems strange to me that the administrators fees always seem to be around 99% of the money in the company.
£8.4 million also went to 'Retail Consultants', I'd love to know what they advised, "er, yeah, shut it all down. That'll be 8 million please"
Eric Mc said:
Come up with a better way then.
The liquidators/administrators/receivers actually have a very difficult job to do which - because of teh complex legislation involved (which they didn't create), takes time and specialist knowlesge - both of which are expensive.
Most of the legilstion surounding wind ups of companies is there to try and protect as manty of the creditors as possible.
The only alternative is to go for the European model - where the taxpayer pays for the winding up costs.
Ive long thought the taxpayer should pay the administration costs. A lot of it would come back via corporation tax of the creditors, plus the economic benefit of saving the number of creditors going bust themselves.The liquidators/administrators/receivers actually have a very difficult job to do which - because of teh complex legislation involved (which they didn't create), takes time and specialist knowlesge - both of which are expensive.
Most of the legilstion surounding wind ups of companies is there to try and protect as manty of the creditors as possible.
The only alternative is to go for the European model - where the taxpayer pays for the winding up costs.
Plus my opinion is that accountants bills for liqudation are simply extortionate.
Understand you will disagree, but I believe it firmly. I think both the number of hours they seem to spend achieving nothing, combined with the amount charged for largely unskilled employees is scandalous.
PLus, and this is my experience of hundreds of them, it seems to be uncanny how often the total liquidation bill is more or less identical to the total amount recovered.
Of course its a couple of percent either way so they can say "Look at us- we got you some money" or conversely "look at us-we lost out too".
CYnical view I know, but its born of bitter experience.
mouseymousey said:
Having been the victim of a company going into and out of a 'prepack' administration it really pains me to get the regular reports showing how much the administrators are getting whilst in the same report telling me I can expect to receive 1% of the money owed.
Agree completely.
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