Am I reading this correctly ?

Discussion in 'Economics' started by slick, Dec 17, 2012.

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  1. I heard on the news that Comet was finally going under. OpCapita bought out Comet for around a quid sometime ago but failed to make a go of it. Apparently the redundancy payments are going to cost the taxpayer via the redundancy payments scheme a cool £23 million.
    The un-secured creditors who will lose out include HMRC to the tune of £26 million, and at the lower scale totalling nearly £5 million the poor sods who bought Comet gift vouchers.
    Among the secured creditors are Hailey Acquisitions who as far as I can tell are part of OpCapita who look to pocket £50 million from the failure.
    Does the above seem correct, and if so how can a company profit from a failure and have the taxpayer fund the redundancies ?
    A bit more on skynews here Taxpayer Faces £50m Bill For Comet Collapse
  2. .......Probably, so stop rubbing your eyes.

    None of this is new anymore & is happening with increasing frequency, remember Rover in 2005. Big Household name companies with a reputation to protect, jettison subsidiaries or divisions of the company deemed to be terminal cases to what are essentially nothing more than salvage companies for a pound or such like, with a dowry of x amount of money to just keep the sinking ship afloat long enough to steer it far enough away from the original parent company for a period of a few years, before scuttling it, laden with cargo & all hands in deep water. The big household name has nicely disassociated itsself from the problem, any dirty work or responsibility for the looming disaster, with its reputation intact. The money is chicken feed to them, to just pay somebody to take the problem away off their hands & dispose of it, with a few conditions, but otherwise in whatever way they like

    Along the way, these salvors, who are often initially portrayed as saviours riding to the rescue of jobs etc, can systematically plunder in a legitimate way, whatever is left of value aboard the doomed hulk.

    There should be a law against it, but there is not, especially after what the Germans were allowed to get away with doing to Rover. They stripped out & kept the brand new product in development with potential & have been successfully selling it ever since, cashed in whatever other brands had substantial sale value to other motor companies who wanted it & cast the of rest of it, Rover, adrift with a new crew drafted in for the purpose. That whole enterprise foundered on the rocks a few years later. Conveniently or just a coincidence, make up your own mind.
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  3. It's probably a hard concept for you to grasp because you have principals and are intrinsically honest.