City Link goes bust

The end result is that we as taxpayers get to sort out the workers one way or another...and we didn't cause the problems in the first place..As for due diligence I thought it was a crime to misrepresent how well a company is doing to any company thinking of buying it..If it isn't it's well past time it was and well past time any regulators did something about it.

Originally Posted by Taf

It looks like it'll be the taxpayer who will be responsible for the redundancy payments under the statutory redundancy payments scheme.

http://www.bbc.co.uk/news/business-30621884

Actually, the NI Fund (where the statutory redundancy payments come from in cases of insolvency) is funded by employees and employers contributions.

[Mr Angry]

Originally Posted by Maggy J

The end result is that we as taxpayers get to sort out the workers one way or another...and we didn't cause the problems in the first place..As for due diligence I thought it was a crime to misrepresent how well a company is doing to any company thinking of buying it..If it isn't it's well past time it was and well past time any regulators did something about it.

It is indeed.

Making announcements

The FSA’s Disclosure and Transparency Rules oblige directors to make certain announcements to avoid the creation of a false market in the company’s shares. Similar rules apply in the case of AIM companies. Bad news, in other words, cannot be kept hidden.

Announcing that a dividend might not be paid on a listed preference share, or that a company is in discussion with its bankers, will obviously have a marked effect on creditor confidence, and directors will need to consult their advisers about the timing of announcements.

They must, however, never lose sight of the fact that they can be guilty of a criminal offence if they:

• make any statement, promise or forecast they know to be materially misleading, false or deceptive;
• recklessly make (dishonestly or otherwise) any statement, promise or forecast that is materially misleading, false or deceptive;
• dishonestly conceal any material facts.

In each of these cases, directors will be guilty if they deliberately induced another person to deal in securities in a company on the basis of false information – or they were careless about what they said and its effect on investor behaviour. (See our series of guides on The FSA and Securities Regulation.)

From here

[Pierre]

Originally Posted by Maggy J

As for due diligence I thought it was a crime to misrepresent how well a company is doing to any company thinking of buying it.

I don't think anything was misrepresented. They knew they where being given a pup. They though they might be able to turn it around but they couldn't.

If it hadn't been for the venture capitalists, the workforce would most likely have been redundant by Easter, not christmas.

They gave it a go and failed. But they gave it a go.

Some on here would have you think they engineered the whole thing, nasty business men...

[Sephiroth]

Originally Posted by Maggy J

The end result is that we as taxpayers get to sort out the workers one way or another...and we didn't cause the problems in the first place..As for due diligence I thought it was a crime to misrepresent how well a company is doing to any company thinking of buying it..If it isn't it's well past time it was and well past time any regulators did something about it.

You are stretching things somewhat.

[Osem]

It's called enterprise and thankfully enough succeed to keep the millions they employ (the majority of the UK's workforce) in work.

[Stop It]

Originally Posted by Maggy J

The end result is that we as taxpayers get to sort out the workers one way or another...and we didn't cause the problems in the first place..As for due diligence I thought it was a crime to misrepresent how well a company is doing to any company thinking of buying it..If it isn't it's well past time it was and well past time any regulators did something about it.

That isn't what I meant.

Facts and figures only tell part of the story. You only know if a company is merely a potentially great company that has been run badly or just a company doomed to fail once you take the reins. Balance sheets, financial figures and reports can not tell you the potential of the workforce, the goodwill of a company and just how lucky they have or have not been.

Nothing was mis-represented here. City Link was sold as a "Fixer-upper" and clearly it couldn't be fixed. No need for any new regulations, just a reminder that not all companies can be turned around.

[denphone]

Three City Link directors to face criminal charges over firm's collapse.

http://www.theguardian.com/business/...livery-company