Panorama and bankruptcy

ugly

LE
Moderator
#1
On the BBC at time of typing, I was laughing at the figures involved especially where they were unpaid tax bills of £10 million. Now if you are a creditor then it sucks and can put you under but surely the exchequer can be a bit sharper than this.
Lets assume that in future all corporations with a turnover of 1/2 a million are required to have appointed a company accountant qualified and possibly licensed to operate. These company accountants could be liable in law for imprisonment if they fail to comply with corporate law regarding tax returns and companies house returns.
Perhaps this would reinforce the bankruptcy courts but would also create a level of integrity as yet unseen.
Would this have value in proposing to my local MP?
 
#2
One of my pet hates are unpaid debts so I like your thinking, although I do believe that you are a bit of a liberal. Personally I`d bring back the poor houses, if a company owes money then the director/s go into the poor house until its paid. And the same goes for individuals who declare themselves bankrupt because they`ve spent all their income on sky/mobiles/piss instead of living within their means.
Would it have value in proposing to your MP, who knows ? Having contacted mine several times I`m under the impression that their influence is more local than national, and they are no more than glorified messenger boys/girls in a lot of cases.
 
#3
Individuals who effectively hide behind the 'Ltd. Company' shield are a pain in the arrse for many small businesses and sole traders.

The BiL who was a big time partner with one of the large accounting firms. He told me that if you run a Ltd. Co. and are likely to go tits up be accident or design (which happens more than you would think) you should always keep enough in the kitty to pay for the insolvency admin. That way they will do it nicely and not drop you in it.
 
#4
On the BBC at time of typing, I was laughing at the figures involved especially where they were unpaid tax bills of £10 million. Now if you are a creditor then it sucks and can put you under but surely the exchequer can be a bit sharper than this.
Lets assume that in future all corporations with a turnover of 1/2 a million are required to have appointed a company accountant qualified and possibly licensed to operate. These company accountants could be liable in law for imprisonment if they fail to comply with corporate law regarding tax returns and companies house returns.
Perhaps this would reinforce the bankruptcy courts but would also create a level of integrity as yet unseen.
Would this have value in proposing to my local MP?
How dare you suggest that people (all genders) should be responsible for their lifestyle choices it is the duty of government to rescue idiots from their stupid descisions in life, from cradle to grave. Poor unsuspecting citizens that choose drugs, alcohol, body piercing, gender change, poor money management or anything that lures in the hard of thinking should be rescued by the state as its a human right to completely screw up with no reprocusions, how very dare you.
 
#5
One of my pet hates are unpaid debts so I like your thinking, although I do believe that you are a bit of a liberal. Personally I`d bring back the poor houses, if a company owes money then the director/s go into the poor house until its paid. And the same goes for individuals who declare themselves bankrupt because they`ve spent all their income on sky/mobiles/piss instead of living within their means.
Would it have value in proposing to your MP, who knows ? Having contacted mine several times I`m under the impression that their influence is more local than national, and they are no more than glorified messenger boys/girls in a lot of cases.
I used to think like that, but then I matured a bit, and realized that there are plenty of circumstances where the individuals that you would have in the poor house have done nothing wrong.

Let's say you're a subcontractor to Carillion. They're about to go tits up. They will be months out paying invoices right now. Do you pay your payroll or your trade invoices with what cash you have? If you go with the invoices, your blokes go unpaid. Do they then also go to the poor house?

About 5 years ago, Canada's currency fell through the floor. 30% loss of value. If you're a Canadian company buying goods and services from foreign suppliers, your bills just went up 30%. The obvious statement is "well buy Canadian then". But if you're buying something that just isn't made in Canada, e.g telecom technology, then you can't.

Now granted people do take the piss, and by all means crucify them, but it's often circumstance more than intent.
 
#6
Having been through this at work 6 months ago I am much of the view that directors should be held criminally responsible for their actions
Months of pain for everyone at management level. Shop floor blissfully unaware despite it being obvious what was going on.

We were bought out an hour after going under for a fraction of the true value but it was a distressed sale and a couple of hundred jobs were saved. The people who bought us out put their own money in to the company and its now a very different story but they could only do that because the bank sold the company off for pennies.

Many of our suppliers took a bath in a big way, some in the tens of thousands, a few in the hundreds of thousands
Most still do business with the new company and chatting to one supplier yesterday he was actually grateful that we had done our best to help him out in the aftermath. Other suppliers hold you personally responsible.

We were previously owned by private equity and personally I think their ethics and management wouldn't stand a great deal of scrutiny.
Nobody has been held accountable for the failure of a company with a turnover in the tens of millions.
 
#7
I used to think like that, but then I matured a bit, and realized that there are plenty of circumstances where the individuals that you would have in the poor house have done nothing wrong.

Let's say you're a subcontractor to Carillion. They're about to go tits up. They will be months out paying invoices right now. Do you pay your payroll or your trade invoices with what cash you have? If you go with the invoices, your blokes go unpaid. Do they then also go to the poor house?

About 5 years ago, Canada's currency fell through the floor. 30% loss of value. If you're a Canadian company buying goods and services from foreign suppliers, your bills just went up 30%. The obvious statement is "well buy Canadian then". But if you're buying something that just isn't made in Canada, e.g telecom technology, then you can't.

Now granted people do take the piss, and by all means crucify them, but it's often circumstance more than intent.
Nothing to do with maturity but all to do with responsibility. 30 days credit should mean 30 days, not 60 or 90 or 120. There should be procedures in place where a company will suffer if their debts aren`t paid within the time period required. Your blokes wouldn`t have to go to the poor house because like all responsible people they would keep some funds in reserve for a rainy day.
 
#8
Your blokes wouldn`t have to go to the poor house because like all responsible people they would keep some funds in reserve for a rainy day.
Congratulations, you've just won the Arrse "Buffoonish statement of the day" prize, against some stiff opposition.

Fortunately from the content of your post, I surmise that you'll never be in a position of power or responsibility, and so I won't have to lay awake at night worrying about what a cluster you're going to make of things.

Toodles.
 
#9
Individuals who effectively hide behind the 'Ltd. Company' shield are a pain in the arrse for many small businesses and sole traders.

The BiL who was a big time partner with one of the large accounting firms. He told me that if you run a Ltd. Co. and are likely to go tits up be accident or design (which happens more than you would think) you should always keep enough in the kitty to pay for the insolvency admin. That way they will do it nicely and not drop you in it.
Dont give them credit is the answer alternatively get PG`s off the directors .
 
#10
Nothing to do with maturity but all to do with responsibility. 30 days credit should mean 30 days, not 60 or 90 or 120. There should be procedures in place where a company will suffer if their debts aren`t paid within the time period required. Your blokes wouldn`t have to go to the poor house because like all responsible people they would keep some funds in reserve for a rainy day.
Never owned and run a medium sized business have you?
 
#11
On the BBC at time of typing, I was laughing at the figures involved especially where they were unpaid tax bills of £10 million. Now if you are a creditor then it sucks and can put you under but surely the exchequer can be a bit sharper than this.
Lets assume that in future all corporations with a turnover of 1/2 a million are required to have appointed a company accountant qualified and possibly licensed to operate. These company accountants could be liable in law for imprisonment if they fail to comply with corporate law regarding tax returns and companies house returns.
Perhaps this would reinforce the bankruptcy courts but would also create a level of integrity as yet unseen.
Would this have value in proposing to my local MP?
Most would agree that starting any business is a risk , Limited companies are a legal entity and they carry the can if things go wrong, not the directors or shareholders , generally this works and creates more business for the UK , many individuals would not take risks and invest in start up new businesses if they could possibly lose everything they own.
Of course there are always those who take the piss and are out and out crooks but being a director of a limited company does not protect you from criminal prosecution for say fraud , owing money is a civil matter .
 
#12
Dont give them credit is the answer alternatively get PG`s off the directors .
Newly established Ltd's, from my own experience, need to have the money to get anything and will not get lines of credit anyway.

The problem is the more established firms; if someone buys in, inherits, or the long time owner goes rogue. Build up bigger and bigger lines of credit, slowly, not quickly, give huge dividends and bonus' to the directors, buy office furniture and decorations that fit quite nnicely into the family home, pass of holiday travel as business trips, use corporate fuel cards for he family. Without painting the full picture you get the idea.

Even at a personal level for myself if we retire in Euro-land we have credit cards from US banks with a combined credit limit of well over 100K. And they have no power to do anything other than write us snotty letters in europe. I know of at least one bloke who pissed off to the US from he UK with a couple of million of 'assets'. UK investigators flew out to speak with him and asked him to return he money - he told them to pi55 oph, end of. By the by, he wasn't a mate I used to know some on the investigation team.
 

Grownup_Rafbrat

LE
Book Reviewer
#13
Having been through this at work 6 months ago I am much of the view that directors should be held criminally responsible for their actions
Months of pain for everyone at management level. Shop floor blissfully unaware despite it being obvious what was going on.

We were bought out an hour after going under for a fraction of the true value but it was a distressed sale and a couple of hundred jobs were saved. The people who bought us out put their own money in to the company and its now a very different story but they could only do that because the bank sold the company off for pennies.

Many of our suppliers took a bath in a big way, some in the tens of thousands, a few in the hundreds of thousands
Most still do business with the new company and chatting to one supplier yesterday he was actually grateful that we had done our best to help him out in the aftermath. Other suppliers hold you personally responsible.

We were previously owned by private equity and personally I think their ethics and management wouldn't stand a great deal of scrutiny.
Nobody has been held accountable for the failure of a company with a turnover in the tens of millions.
Private Equity, Hedge Funds, Asset Strippers, reducing thriving companies near you to the poor house. That's where the law needs serious amendment.
 
#14
I apologise as it is digressing a tad from the original thread title and theme, but it all costs us money indirectly.

With the Mrs working mainly for banks during her career I hear all the dirt that does not make it to the customers ear. We whinge and complain about banks making money hand over fist, but....what you do not hear about is how much they have to absorb as losses.

Creditcard fraud alone costs them a fortune and I don't mean 5 or 6 million quid a year, not even 10 or 20 million quid a year. The Mrs has been head of HR for the credit card divisions of two banks and in both cases losses just from fraud were in excess of 100 million a year, that is card cloning fraud. Then you add on deliberate non-payment by people who take a card with no intention of ever paying it back - saw a few students at uni doing that and then suddenly realising their credit rating would be dinged forever unless they became sensible.

Then on top of creditcards there are car loans, in store loans, etc, etc, etc,.... their abuse and misuse all affects the wider population, regarding them as cheeky chappies and clever crafty beggars is not doing anyone any favours.
 
#15
Having been through this at work 6 months ago I am much of the view that directors should be held criminally responsible for their actions
Months of pain for everyone at management level. Shop floor blissfully unaware despite it being obvious what was going on.

.............

We were previously owned by private equity and personally I think their ethics and management wouldn't stand a great deal of scrutiny.
Nobody has been held accountable for the failure of a company with a turnover in the tens of millions.
I have previously had the benefits of various corporate structures and off shore registrations explained to me in great detail by the BiL - as he implemented a few over his career. If you can pay for the expert advice a company can be structured in such a way that you can make millions, or strip millions, and never pay tax on it.
 

Grownup_Rafbrat

LE
Book Reviewer
#16
Ha Ha Ha. Reminds me of a day when a certain Mr. Fayed, owner of Harrods and some other shady businesses at the time, took a director of the Bank that employed me to lunch and dropped him back at Head Office having secured a massive loan at low rates.

Said Director's team blenched when informed, and spent the rest of the afternoon mitigating the disaster by sharing the loan around other lenders so that when, not if, it was not repaid, no single one would take the massive hit, which would affect share price, customer confidence etc.

Said Director retired not many months later, comfortable Pension intact.

Dunno what happened to Fayed, still selling Egyptian cotton, I think?
 
#17
Nothing to do with maturity but all to do with responsibility. 30 days credit should mean 30 days, not 60 or 90 or 120. There should be procedures in place where a company will suffer if their debts aren`t paid within the time period required. Your blokes wouldn`t have to go to the poor house because like all responsible people they would keep some funds in reserve for a rainy day.
The rainy day happens, someone in the household is out of work and searching for new employment and the house needs major work. The savings cover half of the cost but they need to take out a loan to cover the rest. They are able to pay all the bills but don't have much left at the end of the month without banging in some overtime.

One more major outgoing could put a serious issue in their outgoing finances. So they have saved resonsibly for the rainy day, the rainy day happens and you still bitch and whinge.
 

monkey123

On ROPS
On ROPs
#18
Business is business, you can be ethical & have great morals... or do things differently.

Debts are best avoided by not giving or taking credit

Receivership... there's no money for the creditors when the receiver is charging a few hundred quid an hr for partners down to £70 an hr for a tart do photocopys...
 
#19
Nothing to do with maturity but all to do with responsibility. 30 days credit should mean 30 days, not 60 or 90 or 120. There should be procedures in place where a company will suffer if their debts aren`t paid within the time period required. Your blokes wouldn`t have to go to the poor house because like all responsible people they would keep some funds in reserve for a rainy day.
They have a process in Germany called MAHNUNG. A mahnung is meant to be a sort of reminder that you have an unpaid bill. It has been a long time and I cannot remember the full intricacies, but suffice to say that in JHQ they used to pay my departments bill's quickly as a]the legalities behind a mahnung allowed the supplier to add to the bill for you having the benefit of their money. All very civilised I thought......you buy, you pay.
 
#20
"If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem."

Creditors are often not proactive enough in recovering hidden assets post bankruptcy because of the effort involved and just write the money off. Unless they are a small business they are unlikely to have suffered personally so aren't that bothered.

If you are a supplier to a business it makes a lot of sense to keep up to date with their actions. Any indication of them stretching their cash position (changing invoice payment periods, late payments etc.) should be dealt with immediately. Likewise if they are late in filing accounts and returns. There is so much information available on people and companies now that there is really no excuse to be caught with your trousers down.

"Bentley in the carpark, accounts in the gutter" as the saying goes.

 

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