Dickies gone bust

[grumpy_o_g]

Having read the report, that's a f*****g stitch up. £55k for the net assets of the old company which by the administrators value in excess of that and thats without any valuation of the goodwill (in the commercial sense) associated with the Dickies brand. So the administrators walk away with £44k, the Dickie family get their company back free and clear for a paltry £55k, the secured creditors get what they are owed and the non-secured creditors effectively pay for it all. I do wonder whether this is legally challengeable on the basis that an open sale would have achieved far more than £55k

I agree totally - I'd not only question the valuations though, the company has been trading at an increasing loss for three years - I would have thought that was wrongful trading under the insolvency act anyway surely? There's an almost throwaway line in the report to justify the director's behaviour "However, the Directors felt that the business had a good chance of returning to profit in the future due to signs that economic activity was improving". With losses of 3K in the year to Feb 2012, 150K to Feb 2012 and 350K to Feb 2013? And £190K in tax arrears? That's definitely taking the Michael. I wonder what remuneration the directors took over the previous 3 years whilst trading at a loss?

 

[Deleted User YDKXO]

I agree totally - I'd not only question the valuations though, the company has been trading at an increasing loss for three years - I would have thought that was wrongful trading under the insolvency act anyway surely? There's an almost throwaway line in the report to justify the director's behaviour "However, the Directors felt that the business had a good chance of returning to profit in the future due to signs that economic activity was improving". With losses of 3K in the year to Feb 2012, 150K to Feb 2012 and 350K to Feb 2013? And £190K in tax arrears? That's definitely taking the Michael. I wonder what remuneration the directors took over the previous 3 years whilst trading at a loss?

Well there is nothing illegal about running a company at a continuing loss providing the company is solvent. If it was illegal, most directors of Premier League football clubs would be in jail! The issue is whether the company can cover it's liabilities and in the case of Dickies, it obviously couldn't

 

[volvopaul]

I agree totally - I'd not only question the valuations though, the company has been trading at an increasing loss for three years - I would have thought that was wrongful trading under the insolvency act anyway surely? There's an almost throwaway line in the report to justify the director's behaviour "However, the Directors felt that the business had a good chance of returning to profit in the future due to signs that economic activity was improving". With losses of 3K in the year to Feb 2012, 150K to Feb 2012 and 350K to Feb 2013? And £190K in tax arrears? That's definitely taking the Michael. I wonder what remuneration the directors took over the previous 3 years whilst trading at a loss?

As a sole trader how can you loose 500k in two years and still draw wages or dividends from a company that is running at a loss, simple you must have a blind accountant, or just plain oblivious to what's really happening in the real world.

 

[pks1702]

If the business was doing that poorly the directors took circa 500k in Emoluments over the 3 years to Feb 2012 (the last accounts I can access) did they take a salary also?

As a Director if you can genuinely see a future for the business what was to stop a salary/emolument sacrifice/holiday.

In the year 28th Feb 2012 the also took a 95k dividend even though shareholder funds were reducing, hardly prudence.

 

[rafiki_]

If the business was doing that poorly the directors took circa 500k in Emoluments over the 3 years to Feb 2012 (the last accounts I can access) did they take a salary also?

As a Director if you can genuinely see a future for the business what was to stop a salary/emolument sacrifice/holiday.

In the year 28th Feb 2012 the also took a 95k dividend even though shareholder funds were reducing, hardly prudence.

Normally the emolument would include the salary.

 

[Neil_Y]

Really interesting comments coming from what seem to be professionals in either accounting or law, thanks for your comments, and reading the report.

Having started H4 in a downturn, the lean years of start up meant I was careful and didn't take salary or dividends until we were securely in profit, if you run a business that you believe has a good future and there is only going to be a short term struggle, you run the business as lean as possible and try to get it to a break even, your asset is in the continued trading value and the brand awareness you are developing, so you don't take a penny out and Peter Dickie, you sell the Merc.

 

[diligaf]

Its sounds like they've been enjoying themselves even when times are tough.

It seems to me they don't have a great reputation and pre-pack administration isn't going to help that!

 

[vanoord]

The "targeted marketing campaign" is an interesting one - there are at least two companies active in the marine industry in the Menai Strait who would probably have made offers, but neither of them were contacted by Duff & Phelps.

Curiously, the "new" Dickies seems to be paying off the accounts of some of the creditors of the "old" Dickies - either they've not noticed; or they're trying to engender some goodwill?

It doesn't really help the staff who got jettisoned though - the government redundancy scheme isn't rapid and the autumn certainly isn't the time to be looking for a new job in the marine industry.

 

[Deleted User YDKXO]

Curiously, the "new" Dickies seems to be paying off the accounts of some of the creditors of the "old" Dickies - either they've not noticed; or they're trying to engender some goodwill?
.

It won't be out of altruism. They will have calculated which key suppliers they need for the phoenix business to continue to operate and then negotiated payment of all or part of the previous debt in return for future supplies and credit.

 

[C08]

Just received a mailshot from the "new" Dickies International Co about lift out and storage facilities continuing at Porth Penrhyn.

 

[mil1194]

It won't be out of altruism. They will have calculated which key suppliers they need for the phoenix business to continue to operate and then negotiated payment of all or part of the previous debt in return for future supplies and credit.

I can understand why it's done - and we've been paid in the past to ensure networks/websites/email etc are kept up and running but doesn't this technically come back to 'preffered creditors' which technically isn't allowed?

 

[Doug Edwards Yachts]

This is an interesting thread. I was one of the many employees who found themselves suddenly out of a job after many years loyal service.
It was a great shock to us all and not nice to discover that the few who were to be kept on at the 'Phoenix Company' had received advance notice of the impending administration.
Anyway, a 'lesson in life' and it has given me the opportunity to set up my own Yacht Brokerage in Beaumaris as www.dougedwardsyachts.com.

 

[pks1702]

Out of adversity comes opportunity (sometimes).

I wish you every success in your new venture.

 

[volvopaul]

This is an interesting thread. I was one of the many employees who found themselves suddenly out of a job after many years loyal service.
It was a great shock to us all and not nice to discover that the few who were to be kept on at the 'Phoenix Company' had received advance notice of the impending administration.
Anyway, a 'lesson in life' and it has given me the opportunity to set up my own Yacht Brokerage in Beaumaris as www.dougedwardsyachts.com.

Well done Doug, I wish you every success in your new venture.

 

[Jonmendez]

Good to hear, like many 'phoenix' companies it hurts many people, hope it all goes well!

 

[Deleted User YDKXO]

This is an interesting thread. I was one of the many employees who found themselves suddenly out of a job after many years loyal service.
It was a great shock to us all and not nice to discover that the few who were to be kept on at the 'Phoenix Company' had received advance notice of the impending administration.
Anyway, a 'lesson in life' and it has given me the opportunity to set up my own Yacht Brokerage in Beaumaris as www.dougedwardsyachts.com.

So it was a 'prepack' administration? I hate that. Best of luck with the new venture

 

[TSB240]

This is an interesting thread. I was one of the many employees who found themselves suddenly out of a job after many years loyal service.
It was a great shock to us all and not nice to discover that the few who were to be kept on at the 'Phoenix Company' had received advance notice of the impending administration.
Anyway, a 'lesson in life' and it has given me the opportunity to set up my own Yacht Brokerage in Beaumaris as www.dougedwardsyachts.com.

Hope the new venture works out for you Doug.

I might be a requiring your services to sell our little un.....
See below...

Steve

 

[Doug Edwards Yachts]

Hope the new venture works out for you Doug.

I might be a requiring your services to sell our little un.....
See below...

Steve

Hi Steve,
Thank you for your kind words of support.
Your boat looks very nice, I would be happy to help.
I live in Port Dinorwic, my office is in Beaumaris.
The best number to get me on is 07747034300.
Kind Regards
Doug

 

[Seastoke]

This is an interesting thread. I was one of the many employees who found themselves suddenly out of a job after many years loyal service.
It was a great shock to us all and not nice to discover that the few who were to be kept on at the 'Phoenix Company' had received advance notice of the impending administration.
Anyway, a 'lesson in life' and it has given me the opportunity to set up my own Yacht Brokerage in Beaumaris as www.dougedwardsyachts.com.

hope you dint teach kwackers too sail

 

[Kawasaki]

hope you dint teach kwackers too sail

Been 'sailing' close to the wind all me life Stokey!
Doug- good luck with the Biz
Our paths will cross no doubt, if they haven't already!