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Speedferries: notice to creditors . . . shame


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[quote user="Stan Streason"]actually I knew nothing of the facts behind speedferries before starting on this thread. Before anyone else starts bandying about blame, all the facts and reports are on the Speedferries web-site including a detailed analysis of administrators time costs. This shows that at partner/director level (£700 per hour not 900 as previously stated) only 55 hours were charged by far the largest amount on employee matters. This is out of just under 3000 hours charged in total. Reading the reports briefly it seems like the company was always undercapitalised and when fuel costs and currency costs went against them, losses spiralled. The ship was actually impounded by the French for over £1m of unpaid fees and therefore income had stopped. The bank could not stump these up as it would have been deemed to have been a preference in any case. Even some secured creditors remained unpaid. I have no idea who the purchasers of the ship were but read the reports - the company received only derisory offers to be sold as a going concern and the offer finally accepted was the biggest one available. It was still £8m. Bank of Scotland received about £6m of the £10m owed to it so they effectively funded the administrators.[/quote]

You don't read very carefully - my quotes for renumeration for administrators was circa. It is not abnormal for charges to be £900 an hour. Either figure needs some explanation - please explain why this cost can be justified especially the £200 per hour recently charged for secretarial services.

My posts if you noticed were not aimed directly at Speedferries - I was giving an overall background as to how vultures descend to scavenge at the demise of a company.

Again no explanation why it's always the big accountancy firms that do these jobs and tidy things up quietly.

 

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I'm not going to get into an argument about so called circa or "not abnormal" charges. If Ernst & Young charge £700ph for a partner I cannot see any of the competition charging nearly 30% more. Where did the £200 for secretarial services come from?

Unfortunately you gave an overall background on the vultures without actually presenting any facts on a thread where it patently is not the case.

Why do the big jobs go to the big firms? Because smaller firms dont have the skill or probably more relevant the resources. How many firms have 200 people sitting around so they can go into every Woolworths store at the drop of a hat? Administration, especially when continuing trading for a period is very labour hungry. Smaller firms just cannot cope.

You cannot say "just delay everything a couple of weeks and we will get around to it" or "it will take us a couple of months to secure the assets and deal with creditors and staff because we only have one person spare". The first couple of weeks of an administration are key with dozens of people working 15+ hour days 7 days a week.
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[quote user="Stan Streason"]I'm not going to get into an argument about so called circa or "not abnormal" charges. If Ernst & Young charge £700ph for a partner I cannot see any of the competition charging nearly 30% more. Where did the £200 for secretarial services come from? Unfortunately you gave an overall background on the vultures without actually presenting any facts on a thread where it patently is not the case. Why do the big jobs go to the big firms? Because smaller firms dont have the skill or probably more relevant the resources. How many firms have 200 people sitting around so they can go into every Woolworths store at the drop of a hat? Administration, especially when continuing trading for a period is very labour hungry. Smaller firms just cannot cope. You cannot say "just delay everything a couple of weeks and we will get around to it" or "it will take us a couple of months to secure the assets and deal with creditors and staff because we only have one person spare". The first couple of weeks of an administration are key with dozens of people working 15+ hour days 7 days a week.[/quote]

I agree that I was being vague and as I said before was not discussing directly the Speedferry case.

I really think you are pushing it to say that big firms just have people sitting around waiting for firms to go bust.

I do like the idea that the first couple of weeks are key with dozens of people working 15+ hours etc.. On principal if a company ever went into administration I would call personally as soon as possible - very often I would find the premises open but no one there and often just one person. On many occasions I could have taken other goods in lieu of the comapnies debt to me - but never did.

I would show them my terms and conditions and take my goods - ignoring legal threats and never once did they call the police or take legal action.

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6954625.ece

Seems it isn't just me that thinks the whole charade is dubious...

Turkeys don't vote for Christmas - so I can understand that insovency practitioners have no interest in offering better value and suggesting changes in law that could be better for the creditors and public. 

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I will comment about what I know.

Of course insolvency practitioners do not necessarily have 200 people sitting around doing nothing but they still have to find them if necessary.  It is easier to squeeze 200 bodies if you employ a thousand than to find one if you employ two.  Many practitioners suffer periods of redundancy themselves in their junior years when times are good for everyone else.

Austin Mitchell has been making a rent-a-quote name for 20 odd years slagging off accountants.  Any other name but his in the article would have commanded more respect.

There are some interesting comments after the article, however they seem to come down on opposite sides which will never meet.  You either believe that someone should earn what he is worth (how many people in the world could undertsand enough about Lehmann Brothers to liquidate it?) or that its not worth bothering to train, work hard and be exceptional because anything over £30,000 is crooked.  Its surprising how no one seems bothered that a nobodies like Jade Goodey or Jordan (or an x factor winner) can earn millions in a couple of years but someone exceptional in their business field working a lifetime and reaching the top of their profession somehow is not entitled.  Yet I would bet that more of the "celebrities" income is earned from the less well off sections of our society than that of a top business professional.

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I must confess to only having believed the hype and not the read the detail about the downfall of Speedferries, apologies; nonetheless, it didn't have multiple branches, with most of its capital tied up in a single asset so the number of hours and rate per hour seems a lot compared to my experience of standard accounting charges, even for the bank to pick up. The mystery of the company that bought the vessel and its fate remains ?
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I wont try to justify the charges because I dont know. I just start from the basis that most people are actually honorable and do a good job, that they would only bill what they have done and their charges have been agreed with whichever creditor was charged with the task of agreeing them. If one starts from the opposite position then there will never be reconciliation.
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I would suggest to anyone reading this thread that they read the comments after the article - and make up their own minds- it gives a very good insight into the abuses of Insolvency Practioners.

Who is asking for reconciliation changing the way insolvency is undertaken, and making the obscene fees subject to check as with solicitiors charges. With such lax legislation it is no wonder the abuses continue.

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