Peters Opal

DAVIDO

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Was talking to one of their guys yesterday and offered my sympathies as to their predicament. However on a selfish note they have an f36 that is a stock boat and could offer a respectable amount of money for mine in p/ex. Whilst i feel i would be taking advantage of the situation what do the wise owls here think of dealing with the company in the present situation?
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Gludy

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I would support that. Its probably safer now in doing the deal BUT as regards warranty etc it is not safer. IMHO it is probable they will not survive and hence the normal warranty and legal protection that you have with a seller which in the UK can stretch to 6 years on many things will probably not be there. So you must factor in a zero after sales/warranty support in doing the initial deal.
 

Nick_H

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It's not taking advantage at all. The alternative (assuming no recovery plan is reached) is the boats will be auctioned off for a lower value and the creditors get less, so you're doing them a favour. The employees are top of the pile for being paid, so highly unlikely they'll lose out.
 

MedDreamer

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I don't think you are right about the Employees are top of the pile for being pad out.

at the very top are the Administrators themselves followed by Secured and preferential creditors (usually the Banks, Finance companies and I think the Inland Revenue). The wages owed to employees are just unsecured creditors who get any scraps that are left ie probably nothing.

Those made redundant will get statutory redundancy pay from the Government I believe but that is a pittance.

I may have got this wrong but that is as I remember it.
 

fireball

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Those that have been made redundant should go and sign on straight away - any statutory redundancy pay will be reduced by the amount they could've claimed .... well - thats what I was told 6 years ago.
 

MedDreamer

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You shouldn't feel guilty, you didn't create the situation.

You should be safe now as the Administrators effectively underwrite any trading post administration. I doubt that they are prepared to sanction p/x though.
 

grumpy_o_g

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According to our trainers here (an Investment Bank) it's Taxman first (no surprise, but an absolute disgrace), then banks, etc. (i.e. preferential creditors), after that other creditors and then the employees absolute last. The administrators effectively sit "outside" the pecking order as, unlike all the others, their debts are incurred with the company after it's in administration. If there's security on a loan and the loan is defaulted on you won't be any better off as the asset used for security will be a PetersOpal asset anyway. If the loan is guaranteed or the transaction factored then you will be okay. That's how one of them explained it to me anyway.

One question regarding Gludy's comment around escrow, etc. I understand it would be specific to the terms of the escrow agreement but surely , in a brokerage deal, the only asset the broker would ever have would be his fees (and even those are only due if the boat has been sold)? The boat is never owned by the broker and any money in a "client account" is never an asset of brokers. It should be very easy to prove that - if the administrators tried to appropriate that money to use for any other purpose it would be at best fraud, or even theft surely?

Can anyone explain what happens in reality - I suspect the adminstrators just get away with it 'cos the whole situation is a mess.
 

benjenbav

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An administrator tends to want to know two things about any deal: "where does it say that I am not personally liable?" and "where does it say that I am not personally liable?"

You will need to accept that the trade off for a keen price is likely to be nil aftercare - at least from the company in administration.
 

jfm

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Grumpy, your statement "any money in a "client account" is never an asset of brokers" is absolutely not always correct. Unless you do the trust thing described in the Gludy thread, the money from selling a boat belongs to the broker and he owes a corresponding amount as a debt to the boat seller.

Client account is a misnomer - it sort of implies protection of the money but in fact it does nothing of the sort. It's just the same as any other bank account that the broker has. Gludy has (correctly) explained that at length. Same with a solicitor client account by the way, it's just that in that case the Law Society underwrites the client's credit exposure. The protection that the client has does not exist becuase it is a client account, it exists becuase the Law Society have underwritten it. There's no equivalent to the Law Society in the yacht broker industry.

So a boat seller has credit exposure (for a few days only, hopefully) to the broker and would lose money if broker was insolvent, unless you establish the trust (which is easy to do - a few sentences and make the document a deed) mentioned in the other thread
 

grumpy_o_g

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OK, thanks, that's the bit I've missed. I assumed that, as the broker only brokers the deal, the actual transaction would be between buyer and seller.
 

jfm

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The buy-sell transaction is indeed between buyer and seller. But buyer normally hands over the purchase money to broker, not to seller. At that point the broker owes (as an unsecured debt) the purchse price money to the seller and that's where the seller's credit exposure to the broker commences... But you can write a trust whereby the broker holds the money as trustee for the seller, not as a debtor of the seller, and that will save seller's bacon if broker goes insolvent while in possession of the money. Money held on trust would escape the clutches of a liquidator and would belong to seller. It would even rank ahead of HMRC and secured lenders to the broker in an insolvency
 
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