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Company in trouble? Administrators coming in? Comet show you how to make things a little bit worse.


Sync

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Joined
Aug 27, 2009
Messages
28,845
When you call administrators in, one of the first things they do is put a pause on payments to creditors so that a thorough check on where the money's going can take place and first preference creditors can be identified. Now when you have a voucher or gift card or credit note to that company, you are in fact a creditor, and a creditor on a very low rung of the ladder. So it means that you can't use these vouchers in the initial stage of administration, and possibly never in the event of liquidation.

It's something that happens everyone, it hit Game recently enough as well. People will complain, but ultimately if it's just faceless spods, no one really cares. Unless you get a photogenic child with disabilities who's education is being impacted by the move. Like if that happens it'll cause significant negative publicity. But that won't happen right. Right?

Oops.



A mother whose son has cerebral palsy has spoken of her anger after struggling electrical retailer Comet refused to accept a £500 gift card.

Maria Horton was given the card by the charity Family Fund to buy an iPad to help her son Sam, four, with his school work.

But when she visited a Comet story in Plymouth, staff refused to accept it.

Administrators for the retail store say the use of gift cards and vouchers has been temporarily suspended.

"I spoke to the manager and he said the same thing, that I would have to go away without the goods.
Now this KILLS Comet. Not just in terms of good will, but it's the sort of story that makes people realise "Hm. If I buy something from these guys tomorrow and it goes wrong, it's pretty likely I'm stuffed." So people won't shop there. At all.

It's something Administrators need to stop doing. If you move into a business that has a chance of recovery, the most important thing is to provide BAU to the public. The second the façade slips, the mask crashes to the floor and cracks into pieces.
 

CookieMonster

Well-known member
Joined
Feb 19, 2005
Messages
34,801
When you call administrators in, one of the first things they do is put a pause on payments to creditors so that a thorough check on where the money's going can take place and first preference creditors can be identified. Now when you have a voucher or gift card or credit note to that company, you are in fact a creditor, and a creditor on a very low rung of the ladder. So it means that you can't use these vouchers in the initial stage of administration, and possibly never in the event of liquidation.

It's something that happens everyone, it hit Game recently enough as well. People will complain, but ultimately if it's just faceless spods, no one really cares. Unless you get a photogenic child with disabilities who's education is being impacted by the move. Like if that happens it'll cause significant negative publicity. But that won't happen right. Right?

Oops.





Now this KILLS Comet. Not just in terms of good will, but it's the sort of story that makes people realise "Hm. If I buy something from these guys tomorrow and it goes wrong, it's pretty likely I'm stuffed." So people won't shop there. At all.

It's something Administrators need to stop doing. If you move into a business that has a chance of recovery, the most important thing is to provide BAU to the public. The second the façade slips, the mask crashes to the floor and cracks into pieces.
Not much they can do though. It's not like one could expect the staff/managers to club together to buy the kid his iPad what with them facing possible unemployment and Christmas on the way.
 

Sync

Well-known member
Joined
Aug 27, 2009
Messages
28,845
What you need is for the Administrators to realise what a negative effect not paying out on these leads to for the business you're meant to be trying to save and just pay out on vouchers/cards etc etc. They shouldn't need to be told this but evidently they do.
 

feargach

Well-known member
Joined
Dec 11, 2006
Messages
4,995
The second the façade slips, the mask crashes to the floor and cracks into pieces.
I love how capitalism does this: mere changes of opinion transform things from valuable to worthless in an instant. See Google shares and Greek bonds and any currency. I hope we start work on evolving past this stage soon
 

Mitsui2

Well-known member
Joined
Nov 13, 2009
Messages
33,382
Not much they can do though. It's not like one could expect the staff/managers to club together to buy the kid his iPad what with them facing possible unemployment and Christmas on the way.
Perefectly true in fact, perhaps, but that won't cut any ice at all in the PR stakes when there's a child and an illness concerned. I believe the correct technical term for their predicament in this instance involves the words "rock" and "hard place."
 

Glenshane4

Well-known member
Joined
Sep 5, 2012
Messages
9,639
When you call administrators in, one of the first things they do is put a pause on payments to creditors so that a thorough check on where the money's going can take place and first preference creditors can be identified. Now when you have a voucher or gift card or credit note to that company, you are in fact a creditor, and a creditor on a very low rung of the ladder. So it means that you can't use these vouchers in the initial stage of administration, and possibly never in the event of liquidation.

It's something that happens everyone, it hit Game recently enough as well. People will complain, but ultimately if it's just faceless spods, no one really cares. Unless you get a photogenic child with disabilities who's education is being impacted by the move. Like if that happens it'll cause significant negative publicity. But that won't happen right. Right?

Oops.





Now this KILLS Comet. Not just in terms of good will, but it's the sort of story that makes people realise "Hm. If I buy something from these guys tomorrow and it goes wrong, it's pretty likely I'm stuffed." So people won't shop there. At all.

It's something Administrators need to stop doing. If you move into a business that has a chance of recovery, the most important thing is to provide BAU to the public. The second the façade slips, the mask crashes to the floor and cracks into pieces.
When you write "Administrators" do you mean "Examiners"? Is "Administrators" the term used in UK law?

I did not know that a Company could "call in" Examiners or Administrators for those who prefer the UK description of such an official. I was under the impression that an Examiner (or Administrator) could be appointed only by a Court - if the Court were satisfied that the Company is in financial difficulty and that there is a realistic chance that it could be saved.

Please, someone, clarify these matters.
 

asknoquestions

Well-known member
Joined
Oct 25, 2006
Messages
2,977
but aren't there legal rules for the order of precedence of creditors? If the administrators honour a gift voucher they could get sued for damages by creditors with a stronger legal claim, right?
 

corporal punishment

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Joined
Nov 22, 2010
Messages
2,889
The administrators "real" job is to make sure the bank or banks gets it's money back.
Everyone else can go to hell.
 

CookieMonster

Well-known member
Joined
Feb 19, 2005
Messages
34,801
What you need is for the Administrators to realise what a negative effect not paying out on these leads to for the business you're meant to be trying to save and just pay out on vouchers/cards etc etc. They shouldn't need to be told this but evidently they do.
It's unlikely they were given the option of making that decision. I'd be certain the staff were informed about what to do in cases of gift cards and were applying what they were instructed to do. I'd imagine by the time this got to the administrators it was already on it's way to the papers.
 

'orebel

Well-known member
Joined
Nov 13, 2009
Messages
20,538
The administrators "real" job is to make sure the bank or banks gets it's money back.
Everyone else can go to hell.
That's part of it. They get to take a chunk of wonga for themselves first.
 

Neutron

Well-known member
Joined
Jan 6, 2012
Messages
3,980
Eh?

WTF does this have to do with Economics in Ireland?

This thread is clearly in the wrong section, perhaps a mod would like to move it, Oh Wait, its a mod who started it.

By the way, Comet is dead, another UK retailing collapse.
 

CookieMonster

Well-known member
Joined
Feb 19, 2005
Messages
34,801
Eh?

WTF does this have to do with Economics in Ireland?

This thread is clearly in the wrong section, perhaps a mod would like to move it, Oh Wait, its a mod who started it.

By the way, Comet is dead, another UK retailing collapse.
Chip much?
 

Mossy Heneberry

Well-known member
Joined
Jun 10, 2009
Messages
3,841
I love how capitalism does this: mere changes of opinion transform things from valuable to worthless in an instant. See Google shares and Greek bonds and any currency. I hope we start work on evolving past this stage soon
Capitalism doesn't do that, people do.
 
Last edited:

johnfás

Well-known member
Joined
Feb 22, 2007
Messages
2,727
What you need is for the Administrators to realise what a negative effect not paying out on these leads to for the business you're meant to be trying to save and just pay out on vouchers/cards etc etc. They shouldn't need to be told this but evidently they do.
It's a very difficult balance. The responsibility is to creditors and whilst the one off example makes the whole thing look bad, the general application would be unworkable and likely a fraudulent preference. They're the complex judgment calls that insolvency practitioners have to make and in many cases they can be liable if they make the wrong decision.
 

johnfás

Well-known member
Joined
Feb 22, 2007
Messages
2,727
When you write "Administrators" do you mean "Examiners"? Is "Administrators" the term used in UK law?

I did not know that a Company could "call in" Examiners or Administrators for those who prefer the UK description of such an official. I was under the impression that an Examiner (or Administrator) could be appointed only by a Court - if the Court were satisfied that the Company is in financial difficulty and that there is a realistic chance that it could be saved.

Please, someone, clarify these matters.
Administration (uk procedure) is similar but not analogous to examinership (Irish procedure). But yes, a company can voluntarily enter examinership. In all cases under Irish law an examiner is appointed on application to court. Not necessarily the case with administration in UK.
 

TiredOfBeingTired

Well-known member
Joined
Oct 13, 2011
Messages
3,455
Something similar to the voucher situation happened in USA regarding the Auto Bailout.
Some people had stopped buying US cars because of the guarantees.
What was the point of a 3 Year guarantee from a company that might be gone in 3 months?

Examiners/Administrators have rules on which creditors can be paid.

They also have big ideas on what they should be paid themselves.
Judge cuts insurance administrator
The president of the High Court has cut the €480 per hour fees sought by the administrator of insurance company Icarom plc and also cut the average €330 hourly fees for his staff after noting "a great deal of public disquiet at the level of fees charged for this type of work".
Any worker who sees an administrator or a "turnaround specialist" at the front door should be concerned.
 
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