Some detail on the demise of Sealine

[Twister_Ken]

http://www.insidermedia.com/insider...ate-sale?goback=.gde_2828157_member_253094621

 

[Kurrawong_Kid]

Further information on BBC "Midlands Today" tonight. Sealine has been bought by a foreign company and the plant is being shipped abroad and the premises sold. There were pictures of boats being finished as well as plant packed up in crates. Apparently the boats will now be made overseas. Sad end to a company that started when a caravan builder/repairer couldn't find a boat to the specification he wanted and built his own craft! And was then asked to build another, and another and another. Like topsy it just grew.

 

[Norman_E]

I noticed this "Sealine International traded for about 40 years and was considered one of the 'big four' UK boat manufacturers. It was purchased from Brunswick Group by Oxford Investment Group in 2011."

Was the 2011 purchase a leveraged buyout, in which the assets of the company were mortgaged to secure a loan for part of the purchase price? Such arrangements are often disastrous.

 

[Sans Bateau]

Sad, very very sad. Sad for British boat building and even sadder for British manufacturing.

 

[Angele]

From the article in the link posted by the OP:

Unsecured creditors of Sealine and SSC are not expected to see any of the £11.8m owed, which includes more than £8.6m to trade, £1m to employees and about £400,000 to HM Revenue & Customs.

Another £7.9m is outstanding to secured creditors, including £3.5m to parent Sealine Yachts Ltd.

So, of the first £7.9m of any sale proceeds, almost half will go to the company's owners. And, until that debt is paid in full, none of the unsecured creditors will see a penny. That is, sadly, the way insolvencies work - secured creditors get preference over unsecured. It does niggle a bit, though, when one of those secured creditors is the parent company.

 

[Giblets]

I thought employees & HMRC ranked above everyone else in the pecking order including secured creditors.

 

[Angele]

I thought employees & HMRC ranked above everyone else in the pecking order including secured creditors.

My understanding, from when I had dealings in such matters, is "no" if the security is a fixed charge (over something like a building), but yes if it is a floating charge (over unspecified stock in trade, for example). Things have changed a bit recently, so this may no longer be true. They do, however, rank ahead of the unsecured.

Anyhow, it is only the employees and the trade creditors I feel sorry for (and not HMRC) and, in this example, the amount owed to employees is a small proportion of the total unsecured liabilities.

 

[Norman_E]

My understanding, from when I had dealings in such matters, is "no" if the security is a fixed charge (over something like a building), but yes if it is a floating charge (over unspecified stock in trade, for example). Things have changed a bit recently, so this may no longer be true. They do, however, rank ahead of the unsecured.

Anyhow, it is only the employees and the trade creditors I feel sorry for (and not HMRC) and, in this example, the amount owed to employees is a small proportion of the total unsecured liabilities.

That is correct, or certainly was when I did my studies, and we can be pretty sure that the parent company will have a fixed charge. Banks used to have their charge forms very carefully drawn up. An all monies debenture would incorporate both fixed and floating charges, with every effort and legal nicety being used to ensure that the maximum value of assets were covered by the fixed charge whilst the floating charge mopped up the remainder.