David Lock

It struck me that if Corillion had gotten away with it for a few more months they would probably have been the preferred contractor to rebuild the House of Commons. Doubtless HMG would have continued to ignore financial warning signs and collapse of share price and given them the job.


Then the proverbial really would have hit the fan as Corillion ruined the lives of many more small contractors by forgetting the minor details like paying them


So looks like HMG got lucky on this one.


The whole Corillion story is an absolute disgrace IMHO.


David

Dr Hu

I reckon the reason they got all the contracts anyway was that the Govt. were propping them up! Too big to fail...... until......

dpb

Built on brexit 'confidence' ?

jason7579

Lots of people looking for jobs now (20,000+) and looking at LinkedIn and similar the vultures are circling.


They have been in trouble for a while now though so it's no surprise. Disgrace is the right word, or maybe not quite strong enough.

ALi-B

iTrader: (1)

I find it odd that this is such big news.

This has been going on since the 1990s (when they de-merged from Tarmac), and infact one can probably trace a part of the debt capital back to when the defined benefit pension deficits became a burden (Brown). This is not a new thing nor a unique one; Take BHS, Toys are us, TATA, Hoover, Balfore Beatty, BT, Tesco, BA, GKN the list goes on...and that's just the big boys, the list is endless for smaller companies.

madscoob

iTrader: (3)

parasite company, doing work for people to lazy to do the work themselves but prepared to pay over the odds to get someone else to do it for them, carrillion then tell their suppliers when they will be payed (take it or leave it) they also tell you how much profit they will allow you to make from them, oh and if you want paying before 100days you have to pay a percentage of your invoice yourself, whilst almost all the time being paid themselves within 30days, nothing more than a precurement company for people with to much taxpayers money to spend

njkmrs

But it has disappeared ..oops

That pic did make me chuckle although as has been said here it is an absolute disgrace that it was allowed to happen

legb4rsk

But the thing that really pi$$es me off is that all the people in charge ,public or private,will walk away scot free & with payoffs.

It has been happening for years.Why if we give out enormous sums of public money are we not protecting ourselves in these contracts?

jason7579

They won't pay the price they should for what has been done but I have read that...


"the Insolvency Service has suspended payments to Carillion Executives who have rewarded themselves very handsomely for spectacular failure and astonishing incompetence.

Howson has resigned as a non-executive director at oilfield services company John Wood Group so hopefully he will feel some consequences of his ineptness however he will never be in the same boat as the thousands of people who could be left with no income and bills to pay."

Devildog

Don't believe al the media pish about "massive payoffs". It simply cannot happen.

The maximum Carillion execs will receive is the same as any other employee (subject to the suspension stated above) which is currently capped at £489 per week for the standard statutory sums which they may be due.

Devildog

Whilst I agree the practices are unacceptable, no one was forced to work wth Carillion and accept those terms.

And incidentally, HM Government is one of the worst payers out there.

madscoob

iTrader: (3)

do you actually believe the above applies to people at the top ?
they will have in their contracts that they will be paid in full if let go for any reason, remember the term GOLDEN HANDSHAKES oh and they all write each other glowing references

Devildog

I know for a fact that it applies to the people at the top.

Carillion is in insolvent liquidation. All payment obligations to any creditor, be that a trade supplier, a bank or an employee, contractual or otherwise are now governed by a piece of legislation called The Insolvency Act 1986. This statute takes absolute priority over anything any contract may say.

The people at the top have the same legal rights afforded by this legislation as the bloke who was employed to clean the toilets. Just because they have a contract which affords them a golden handshake does not give them any priority.

They will have a claim in the liquidation for anything their contract provides for, but that claim will a) rank equally with every other unsecured creditors (which will total £millions) and b) be paid whatever pence in the £ is available after the prior ranking chargeholders are paid, if anything.

As an example, if the CEO is due £500k golden handshake, and Carillion owes £100m in unpaid debt, the CEO will be entitled to recieve 0.5% of whatever is left to pay unsecured creditors.

But thats irrelevant as there is no chance whatsoever of there being anything left to distribute to unsecured creditors - hence why the official receiver has been appointed liquidator rather than an independent firm dealing with this as an administration. They looked at it and declined to act as there wasnt enough there to cover the fees.

ALi-B

iTrader: (1)

Of course don't forget the chunk that PwC will take to wind it all up. The FT states that they expect to earn £50million.

Devildog

They'll be working in tandem with the Official Receiver (and that amount is likely overstated)

The Official Receiver is, of course a public office staffed by civil servants and funded by the taxpayer.

PwC's involvement is simply because the OR's office has neither the manpower nor the levels of knowledge, experience or expertise to deal with Carillion's affairs.

Don't knock the professionals Ali. Thats like Jeff trying to fix his Astra himself, rather than taking it to someone like you

ALi-B

iTrader: (1)

The problem is the insolvency laws means the likes of PwC do get paid in full whilst the smaller contractors and suppliers are left out if pocket; Better known as the unsecured creditors.

Because of this one does question that do they give VFM?

Devildog

That's a tricky one Ali.

If the Insolvency Practitioners (or their appointed agents) didn't get paid first, then there would be no one to do the work. Well, there would, insofar as the OR's office would mop up the crap shutdowns, but no one would be there to deal with the jobs where businesses are saved, or sold on, or turned around. The cases where jobs are saved and creditors do actually get some money back. The ones that never make the news.

If you're doing an MOT you have to charge a fixed price. Can you imagine of the law was changed where everthing you do, from an oil change to a complete engine and gearbox rebuild had to be charged at the same fixed price. Irrespective of parts and labour costs and a price below fair market (and indeed often economically viable) rates. Rates fixed by a committee with no day to day understanding of what it is you actually do?

If the IP's don't get paid first, for dealing with someone elses mess remember (including processing employe claims to make sure emplpyees get their statutory entitlements regardless of asset cover) then the scenario above is what my profession is looking at.

And in any event, Insolvency Practitioners fees are mostly fixed by the creditors themselves. Its not the licence to print money many think it is. Its also one of the most heavily regulated of all professional services.

The laws need to change in respect of trade generally. To stop the Carillions of this world having so much clout that they can dictate payment terms with their sub contractors and suppliers. But equally those sub contractors and suppliers need to exhibit more care in advancing credit. If there really is £75 million due to subcontractors, a big chunk of that will be down to those sub contractors allowing that debt to get that high without chasing payment or witholding supply to make sure they get paid.

Poor credit control or indeed chasing turnover rather than profit is half the problem.