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[STMO123]

What if's do not answer the question about who gets what in what priority, Share holders, employees, administrators, tax man, property rental ETC ETC

Deloites is an accounting business which takes on all kinds of financial work and pays it employees just like any other business, some contracts are more profitable than others. One of my questions is who pays them for winding up a company that has no assets, and in debt ike Comet

Surely they have stock which is worth something? 

[johnnybbad]

<snip>

Absolutely not, but if a company is bankrupt I.E no money how come the adminstrators get first dips at what is left, not the  employees who have gone unpaid for a period.
Who actually gets what and who pays the outstanding debts 

<snip>

I would never expect anyone to do something for nothing.

The main problem with them was the lack of communication, the way WE had to chase THEM up to find out what was going on and as said previously they help themselves to whats left before any of the redundant staff get a penny

Obviously you have never had any first hand experience of them

OK .. lets have a few "what ifs"

What if ....  I'm an administrator hired to sort out a companies financial problems

What if.... that company is so far in the clag it cannot continue trading

What if .. it's assets exceed its debts by a long mile

What if ... as the administrator I actually have a few functioning brain cells

What if ... I take steps to ensure I get paid for the work I'm going to have to do BEFORE I start doing it

What if ... that is called "common sense"

What if .. I fail to do the above and lose money .. my company goes bust and all my employees  lose money .....

Yup .. I totally understand why they get paid first ....  it's the law of "supply and demand" 

Like i said in my previous post obviously you have never been in that situation, i totally understand that they need to get paid for the work ( whatever that may be ), and i myself would want to secure my payment if i were them.

Maybe im just being bitter towards them, but i suppose its just another case of the little man losing out 

[Lizzie_Zoom]

What if's do not answer the question about who gets what in what priority, Share holders, employees, administrators, tax man, property rental ETC ETC

Deloites is an accounting business which takes on all kinds of financial work and pays it employees just like any other business, some contracts are more profitable than others. One of my questions is who pays them for winding up a company that has no assets, and in debt ike Comet

Surely they have stock which is worth something?

Not much Steve.

Remember the suppliers had stopped supplying Comet with any news stock some weeks ago, so stock levels will be low.  What there is will be liquidated for whatever value the administrators can raise for it, but with much ex-display product and the fact it is "bankrupt" stock, it will raise very little in the scheme of things.  What is raised must be paid to the priority creditors, such as the Inland Revenue and the banks. It just will not go that far!!

[STMO123]

Inland revenue are, apparently, not a priority creditor in this case. That's the reason its costing so much.

[sassanach]

<snip>

Absolutely not, but if a company is bankrupt I.E no money how come the adminstrators get first dips at what is left, not the  employees who have gone unpaid for a period.
Who actually gets what and who pays the outstanding debts 

<snip>

I would never expect anyone to do something for nothing.

The main problem with them was the lack of communication, the way WE had to chase THEM up to find out what was going on and as said previously they help themselves to whats left before any of the redundant staff get a penny

Obviously you have never had any first hand experience of them

OK .. lets have a few "what ifs"

What if ....  I'm an administrator hired to sort out a companies financial problems

What if.... that company is so far in the clag it cannot continue trading

What if .. it's assets exceed its debts by a long mile

What if ... as the administrator I actually have a few functioning brain cells

What if ... I take steps to ensure I get paid for the work I'm going to have to do BEFORE I start doing it

What if ... that is called "common sense"

What if .. I fail to do the above and lose money .. my company goes bust and all my employees  lose money .....

Yup .. I totally understand why they get paid first ....  it's the law of "supply and demand" 

what i find interesting is that the "fees" to wind up a company are always 99.99% of the assets

[Lizzie_Zoom]

Inland revenue are, apparently, not a priority creditor in this case. That's the reason its costing so much.

Oh they are always a priority Steve in my experience, but Comet "assets" will never come even a fraction towards paying £26 million!

[MaxV6]

trouble is ,  when all your premises are leased, they're not actually assets.....   

[STMO123]

Inland revenue are, apparently, not a priority creditor in this case. That's the reason its costing so much.

Oh they are always a priority Steve in my experience, but Comet "assets" will never come even a fraction towards paying £26 million!

No, they're not. The creditors did some kind of deal to make sure they got paid first. It was a condition of a loan or something.

[Lizzie_Zoom]

trouble is , when all your premises are leased, they're not actually assets.....   

Exactly, and that is a key problem whenever a large national chain goes bust.

Most multiple retailers do not own any property today, although 30 years ago that was a popular choice.  Then they realised they could strike a good deal by selling the valuable asset and then leasing them back.  As my company always said, we are retailers, not property developers. The benefits of those property sales were absorbed in the accounts many years ago!

[Lizzie_Zoom]

Inland revenue are, apparently, not a priority creditor in this case. That's the reason its costing so much.

Oh they are always a priority Steve in my experience, but Comet "assets" will never come even a fraction towards paying £26 million!

No, they're not. The creditors did some kind of deal to make sure they got paid first. It was a condition of a loan or something.

Well that will be a first I think Steve.  The Inland Revenue have a legal right to any assets normally, and do not give that up lightly

STOP PRESS: Sorry, I am wrong Steve.  I am very surprised, but the Inland Revenue are classed as an "unsecured creditor". Amazing.  That is "our" money.  Something is wrong with the system

[Rods2]

A major problem these days are highly leveraged buy outs where profits (and often more) are absorbed by the large amount of debt placed on a companies books.

The company that has bought the business very often have no / very little money invested in the business, they are quite happy to asset strip to get what they can and then cast the company adrift.

Where retailing is rapidly changing at the moment into a clicks and mortar industry, those that do not have the funds or management foresight to setup and grow the potential Internet side of the business are doomed. This applies particularly to hi-tech retailing.

Buying and asset stripping of companies has been going on for as long as I can remember and is much more prevalent in the US and UK, then in Europe. But many more major businesses are still family owned in Europe, so maybe that is a key we are missing, along with their investors being prepared to take a longer term view. In the UK and US 3 monthly public company results is taken to mean long term!  This is why the Government is considering changing the law so public companies have to only report twice a year.

I understand the arguments that hedge funds etc. buy under performing / failing companies and turning them around and there have been some good examples like Boots and WH Smiths. Maybe we only hear about the bad examples where they do crash and burn, but it might also be that the current balance is incorrect. Maybe making the acquiring company having to provide say 60% of the companies acquiring capital is the answer, but that would still not them selling, leasing, borrowing and keeping as much money as possible before trashing the company.

I personally have a dislike of pre-pack administration, which seems to me to be screw the companies suppliers, lose most of the debt and carry on, with the same management to do the same again in a few years. Now surely this can't be healthy for capitalism, where suppliers, supplying goods in good faith get screwed and weakened in such a way.

[MaxV6]

Inland revenue are, apparently, not a priority creditor in this case. That's the reason its costing so much.

Oh they are always a priority Steve in my experience, but Comet "assets" will never come even a fraction towards paying £26 million!

No, they're not. The creditors did some kind of deal to make sure they got paid first. It was a condition of a loan or something.

Well that will be a first I think Steve.  The Inland Revenue have a legal right to any assets normally, and do not give that up lightly

STOP PRESS: Sorry, I am wrong Steve.  I am very surprised, but the Inland Revenue are classed as an "unsecured creditor". Amazing.  That is "our" money.  Something is wrong with the system

customs and excise on the other hand,   are a different kettle of piranhas.