Here Comes The Next Stage, Credit Burn!

[Mega]

http://www.independent.co.uk/news/business...es-1766561.html

Oh Yes, these Brillant Capts of Industry..........wasn't their fault they went bust, Oh NO!

Back in the early 90's i worked for a guy whom went bust 3 times, 1st time it was not his fault, 2nd time it was......3rd time the thing was simple fraud.............then he ran out of fools willing to give him credit.

Whats the betting that under "Zu-labour".......all the banks are told to refund these supercharged Range Rover driving a*seholes with OUR money..........AGAIN!!!!

Mike

[Chest Rockwell]

http://www.independent.co.uk/news/business...es-1766561.html

Oh Yes, these Brillant Capts of Industry..........wasn't their fault they went bust, Oh NO!

Back in the early 90's i worked for a guy whom went bust 3 times, 1st time it was not his fault, 2nd time it was......3rd time the thing was simple fraud.............then he ran out of fools willing to give him credit.

Whats the betting that under "Zu-labour".......all the banks are told to refund these supercharged Range Rover driving a*seholes with OUR money..........AGAIN!!!!

Mike

A f*cking disgrace!

[Fudge]

So a bad business could survive by being a bit ruthless and ruining several good businesses in the process.

Nice.

[porca misèria]

Isn't it basically like personal bankruptcy with limited liability thrown in?

For it to work smells of administrators failing to do very much to try and realise best value for the assets of a bust business.

[Mr Yogi]

There's nothing particularly new here - the assets of insolvent companies have always been sold on by liquidators enabling a new company to carry on where the old one left off, but without the debts.

I can't see how or why anyone would want to change things. The whole point of limited companies is that the shareholders and directors are not personally liable for the debts of the company. To restrict the advantages of limited liability would be to constrain entrepreneurship and the creation of employment opportunities.

When a small company loses money due to a customer going bust they need to accept a large proportion of the blame for allowing themselves to get into such a vulnerable position.

I don't really understand the culture of trade credit. Why do suppliers lend money to their customers? My own business has thrived since I stopped taking or extending credit.

[porca misèria]

There's nothing particularly new here - the assets of insolvent companies have always been sold on by liquidators enabling a new company to carry on where the old one left off, but without the debts.

In which case assets should be sold to the highest bidder. The problem with pre-pack is that noone appears to be taking bids. What would you say of a bank that repossessed a house and just sold it on privately without advertising it for sale?

[Rockape]

Perhaps businesses should just run themselves propery, i.e manage your cash flow, stop living on debt. We have had terrible business models for years, living in debt in the good times and totally boloxed in the bad. Good knows what their business plans looked like, full of "fingers crossed" and "with a bit of luck",, rubbish, let them go to the wall.

[SNACR]

There's nothing particularly new here - the assets of insolvent companies have always been sold on by liquidators enabling a new company to carry on where the old one left off, but without the debts.

I can't see how or why anyone would want to change things. The whole point of limited companies is that the shareholders and directors are not personally liable for the debts of the company. To restrict the advantages of limited liability would be to constrain entrepreneurship and the creation of employment opportunities.

When a small company loses money due to a customer going bust they need to accept a large proportion of the blame for allowing themselves to get into such a vulnerable position.

I don't really understand the culture of trade credit. Why do suppliers lend money to their customers? My own business has thrived since I stopped taking or extending credit.

I do myself kind of side with the view that if you're a business and by one customer going bust forces you to go bust you're not a business you're a parasite.

For those creditors moaning how little they get they should look at how much Zavvi creditors got from full blown administration. At least with prepack they might be able to do business with the compant in future.

The problem people have with prepacks is not that any other process will actually raise any more funds for them but that someone else might be getting a free lunch.

I don't like serial shysters like Grant Bovey and he gives entrepreneurs a bad name. However, whether his house and car are seized and sold off at auction doesn't alter my life in any way.

[SNACR]

Isn't it basically like personal bankruptcy with limited liability thrown in?

For it to work smells of administrators failing to do very much to try and realise best value for the assets of a bust business.

Administrators do a sh1t job anyway. All they'll do is cover their own fees as number one priority and then if there's anything over give creditors back 10p in the pound if they're lucky.

A firm I know that went into liquidation had loads of laser measuring equipment that was worth about £250k. They sold it all at a public auction for £40.

[SNACR]

Perhaps businesses should just run themselves propery, i.e manage your cash flow, stop living on debt. We have had terrible business models for years, living in debt in the good times and totally boloxed in the bad. Good knows what their business plans looked like, full of "fingers crossed" and "with a bit of luck",, rubbish, let them go to the wall.

Except, the businesses that are surviving at the moment aren't necessarily the well run ones they're mostly the ones that can most easily access debt.

Some sectors like pubs and hospitality have seen such fierce demand drop that even the most savage stress test wouldn't have factored it in. Businesses with high fixed costs simply can't withstand significant falls in sales for any prolonged period.

[Mr Yogi]

In which case assets should be sold to the highest bidder. The problem with pre-pack is that noone appears to be taking bids. What would you say of a bank that repossessed a house and just sold it on privately without advertising it for sale?

Not a good analogy.

A house is a house; it has pretty well the same value to whoever buys it.

The assets of a company however, can be valued very differently according to circumstance. Sold off piecemeal they are normally worth very little. Kept in place though, with experienced staff still in position, they can be worth far more - particularly if historical debts are wiped out.

I would agree that the process should be more open to potential third party buyers who plan to carry on running the business, but in many cases it is only the existing management who has the required specific knowledge and experience.

When a company's assets are sold in a firesale the creditors rarely get anything anyway. AS SNACR points out, if the company carries on, at least they have the opportunity of ongoing business.

[Rockape]

Except, the businesses that are surviving at the moment aren't necessarily the well run ones they're mostly the ones that can most easily access debt.

Some sectors like pubs and hospitality have seen such fierce demand drop that even the most savage stress test wouldn't have factored it in. Businesses with high fixed costs simply can't withstand significant falls in sales for any prolonged period.

I agree with you, I only have a problem with too many chancers out there, they give business a bad name. An accountant told me that I was his only client that was in the black, the rest were all in debt and increasing it, this made the banks stick with them as they didn't have the collateral to cover the debt.

[shindigger]

Im an Audio Visual Tech.I work freelance. I know of one company in the London area that have liquidated themselves 3 times owing hard working friends of mine thousands of pounds. I nearly got burnt myself 10 years ago.

The guy who does this seems to regard it as viable business practice.

He's walking scum as far as im concerned.

Good luck finding your next crew, you twisting ****!!! :angry:

[VacantPossession]

I do myself kind of side with the view that if you're a business and by one customer going bust forces you to go bust you're not a business you're a parasite.

It depends on the circumstances. Some small businesses which are perfectly viable are going under not as a result of failing to get trade credit, or even failure to gather in money owed to them from normal trading, but in situations where cash owed to them is held in trust by for example e-commerce agents or affiliate sellers who are meant to be the temporary guardians of their rightful assets held in the same way that solicitors hold clients' cash in a client account, such cash or assets being strictly untouchable but ending up being used to bail out the trustee who is going through hard times.

Edited August 3, 2009 by VacantPossession

[Confounded]

This is an interesting thread, I was talking to my Dad yesterday saying how if they get this sh!t heap of a system going again I was going to emulate Grant Bovey, he has had several failed business in the lead up to Imagine Homes that went bust leaving £50 million of debt to HBOS (UK Taxpayer). In the 2 years he ran his "entrepreneurial business" he paid himself and Anthea £4.3 Million. This is fraud on a grand scale and he has already gone into a new business.

I also told my Dad about Anatomy Worrelthomson who went bust closing a number of restaurants and leaving his meat/food suppliers with £thousands of unpaid bills. He has gone back to these business asking them to continue to supply his new business and to suck up the losses because his future business will make them good on the long run. AWT did not want to keep the previous business running by using his house as collateral for new loans.

We now have a system that is so easy to scam you would be a fool to work for a living. You have to start your business (fraud) slowly then start milking it for the lifestyle you want then go bust, the next business you go bigger, as is often the case with the progression of fraud, by the third you can go mega and set yourself up for life, you are unlikely to get a fourth chance.

My Dad was pretty quiet after I ran through my plan, however I said it system will survive so not to worry about me being a criminal, he was then even more quiet. He knows several friends who have done this trough their life and obviously felt it was a little suspect but never realised how deliberate some of these failures are.

[expatowner]

I was going to emulate Grant Bovey

Dont do it.

You woudn't think much of yourself.

Play with a straight bat.

[@contradevian]

Henry Ford, Abraham Lincoln, HJ Heinz and Milton Hershey (hershey bars) all survived bankruptcy.

An entrepreneur, is obviously at higher risk of bankruptcy.

The fact is we need more entrepreneurs.

People that sit on funds in the bank, earning interest (haha) don't create the jobs or businesses of the future, though their savings obviously lent to these people.

Edited August 3, 2009 by HostPaul TAFKA Rover2000

[Bloo Loo]

Henry Ford, Abraham Lincoln, HJ Heinz and Milton Hershey (hershey bars) all survived bankruptcy.

An entrepreneur, is obviously at higher risk of bankruptcy.

The fact is we need more entrepreneurs.

People that sit on funds in the bank, earning interest (haha) don't create the jobs or businesses of the future, though their savings obviously lent to these people.

none of them were bankrupt in the UK

UK bankruptcy means failure.

US bankruptcy means a lesson learned.

[Confounded]

Dont do it.

You woudn't think much of yourself.

Play with a straight bat.

That is my natural tendency, but when no one else wants to play cricket you have to play the game of the time.

[lowrentyieldmakessense(honest!)]

*Cobra Beer Earlier this year, entrepreneur Lord Bilimoria put his business, Cobra Beer, through a pre-pack administration, leaving creditors with a reported £70m of unpaid debts. He has said that he lost £20m of his own money, but he retains a 49.9 per cent stake in the company. Lord Bilimoria, a former government adviser ennobled in 2007, has also said he is committed to paying back as much of the money as possible.

you just couldnt make this up

[THE BALD MAN]

There's nothing particularly new here - the assets of insolvent companies have always been sold on by liquidators enabling a new company to carry on where the old one left off, but without the debts.

I can't see how or why anyone would want to change things. The whole point of limited companies is that the shareholders and directors are not personally liable for the debts of the company. To restrict the advantages of limited liability would be to constrain entrepreneurship and the creation of employment opportunities.

When a small company loses money due to a customer going bust they need to accept a large proportion of the blame for allowing themselves to get into such a vulnerable position.

I don't really understand the culture of trade credit. Why do suppliers lend money to their customers? My own business has thrived since I stopped taking or extending credit.

These are very close to the wire..a company is set up using creditors money...it is then run badly (or perhaps even fraudulently) it is then bought back by the bad management who now have a business with no debt...does not past the smell test for me...isnt the easy answer to disbar these cowboys from buying the assets back

[THE BALD MAN]

Henry Ford, Abraham Lincoln, HJ Heinz and Milton Hershey (hershey bars) all survived bankruptcy.

An entrepreneur, is obviously at higher risk of bankruptcy.

The fact is we need more entrepreneurs.

People that sit on funds in the bank, earning interest (haha) don't create the jobs or businesses of the future, though their savings obviously lent to these people.

WE might need entrepreneurs but not the sort who shaft creditors and then buy back asets at a bargain price...if I was a creditor I would be tempted to send round some large debt collectors

[helenreed]

Confounded - I have had similar discussions about this with my dad. I have to say that I am genuinely shocked that many more businessmen don't/haven't followed the Grant Bovey business model. Why engage in any criminal activity that could possibly land you in front of a beak when you can take as much money as you want by running a Bovey business?

I suppose I am doubly amazed that more people don't do it and by the fact that the people who do can get away with it.

[sleepwello'nights]

Back in the early 90's i worked for a guy whom went bust 3 times, 1st time it was not his fault, 2nd time it was......3rd time the thing was simple fraud.............then he ran out of fools willing to give him credit.

I was made bankrupt once. It was a rather ridiculous situation. In essence a supplier sued me, I counter sued. The case was heard and adjourned four times. The fifth hearing I had a senior moment and completely forgot about the hearing. Totally no realisation that I had to attend court, no idea why. First I knew was when I received a telephone call from the Official Receiver. In my absence a bankruptcy order was made against me.

My bank were very understanding, they let me continue paying money into my account - but wouldn't let me take any out.

I got mugged for £20k in fees to the insolvency practitioners. It still rankles 10 years after the events. If I saw a judge or insolvency practitioner on fire in the street I wouldn't spit on them.

I can quite understand why the guy who went bust 3 times played their game. If you get mugged on the street you might lose a few pounds from your wallet. These bastards take you for thousands, and it's within the law.

[Bloo Loo]

Confounded - I have had similar discussions about this with my dad. I have to say that I am genuinely shocked that many more businessmen don't/haven't followed the Grant Bovey business model. Why engage in any criminal activity that could possibly land you in front of a beak when you can take as much money as you want by running a Bovey business?

I suppose I am doubly amazed that more people don't do it and by the fact that the people who do can get away with it.

the reason is that most business men have their own skin in the game.

go bust and the bank is after you for the loans.

clearly, people like Bovey are able to hoodwink bankers for no collateral....maybe he is being given a favour from on high for some past service to her majesty, or Gordon, or Tony.