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Meta, links to the Supreme Court case were posted on here a week ago.
"the Supreme Court Ruling"
"the Supreme Court Ruling"
"the Supreme Court Ruling"
WHAT SUPREME COURT RULING?!?!?!
You are literally making something up that doesn't exist and then talking about it as though it is a matter of fact!
Or maybe you really mean "possible Supreme Court Ruling" in which case this is just the whole "SPD have made an offer" nonsense all over again.
..will happen because behind all the rush to pre pack and the unwillingness to take MAs money something definitely stinks. I cannot state what that is since I was not privy to what went on outside of RNS releases, however the smoke signals are there, the biggest of which being that no rights issue, never mind how diluting, was ever put before shareholders. Why was this, because the plan was imo to shut shareholders out, even if it meant breaking the rules. I believe the hope was that the existing laws around insolvency would prevent and case ever being brought, but that could all change if the Supreme Court ruling goes our way.
''a simple lack of judgement by directors" isn't a breach of fudiciary duties.“
That I suppose sums up much of the debate on here. Many of us contend that the BOD did not have an innocent lack of judgement. It was a deliberate concerted attempt to not act in shareholders best interests and to try their utmost to keep their own jobs at the expense of everyone else including their own staff. Its completely disgraceful.
You even had MA advising publicly that he had no intention of closing any DEB store, now the administrators are closing 22 of them. Added to which staff's shareholdings are now worthless, and they were not paid Director's level salaries. If I was DEB's insurer for professional indemnity I'd be concerned - the class lawsuits on this are going to be pretty unpalatable and hard to defend.
Still, like MA I am happy to see the Supreme Court ruling come through before we all seek retribution for the BOD's and administrator's behaviour.
"I would have never invested in this company." Every day we make some progress here.
So lets do what investors do all the time and distil the company down:
"EBITDA collapsed"
"huge debts"
"fend off a takeover"
“redesign”
You give intent to the Directors actions. I dont. I don't believe you can at this distance and so I see:
A company with collapsing profits, taking on huge debts, with a falling strategy and management distracted by a hostile takeover.
A company at a critical point of make it ot break it.
When you look at it like that, can you reallly say you blame the lenders for taking this over an wiping out the equity?
I can't.
So, it's been obvious for a time this was an short and there might be, just might be, value in the bonds if the business went private. Ultimately with new managemet.
You call them crooks. I just call them beseiged.
Either way, I agree with you "I would have never invested in this company."
“but maybe it's also investors jobs to avoid highly geared buisnesses with wafer thin margins and poor management. if they don't undersatnd or can't live with the risk."I don’t have a problem with the risks, and I am ok with my loss here. Never complained about it. My problem is with the crooks who brought the company to its knees deliberately while making false statements.The company was not highly geared when in invested. They took huge debts afterwards, while their EBITDA collapsed. They spent the company’s money to “redesign” some of the stores so that the lenders will have some good stores to keep. Instead of focusing on cutting debt, they took more debt to avoid a takeover by MA. Their job was to reduce debt and keep the company viable, not to fend off a takeover attempt.It is obvious that they didn’t act in the interest of shareholders for a lot of time, but they lied and presented falsehoods in their reports.If they were honest about the situation and their plans, I would have never invested in this company.
Mr Peacock, I can well believe that you work in retail, (haberdashery department?). It goes a long way towards explaining you clueless ness when it comes to investing.
LOL since you have been following me around the threads insufgesr it's you acting like PC Plod. When you are not logged in the filtered posts are readable. When you are logged in, it states X message has been filtered. Since I have only filtered the three sad shorters who keep posting on here I don't need to pretend anything. I knew who had posted and my " can't move on" comment was spot on. Since I work in retail and what happens to Debenhams matters to me (for various reasons( I will keep posting. Not sure why shorters need to keep posting but I stated a reason why. Pearls - keep it up - what happen here was bad especially when the directors still have their jobs!
"
It may seem to you that it's the job of Directors to load companies with debt, but maybe it's also investors jobs to avoid highly geared buisnesses with wafer thin margins and poor management. if they don't undersatnd or can't live with the risk."
This post. Really should be the last word on this sorry state of affairs.
It won't be.
The prevailing attitude amongst some seems to be
"I've made a terrible decision and its everybody elses fault."
And based on your logic any company that fails because of decisions made by a Board would warrant shareholder compensation.
Just think about it for a moment. Think that's practical?
Who in their right mind would then want to be a company Director in those circumstances?
Who would you then expect to be running the buisnesses you invest in?
By the way it's not my logic, it's the way it works. Poor commercial judgement isn't a crime.
It may seem to you that it's the job of Directors to load companies with debt, but maybe it's also investors jobs to avoid highly geared buisnesses with wafer thin margins and poor management. if they don't undersatnd or can't live with the risk.
It still stands: ''a simple lack of judgement by directors isn't a breach of fudiciary duties.“
I don't really know what to say about your examlpe. I cant see how having a car cleaned relates to running a mutlti-billion pound business. if you think it's the same thing, that's your buisness.
"It seems the job of directors nowadays is to load companies with debt and enter administration with them, to prolong their jobs."
Of course that isn't there job, but this is what happens in reality on many occasions.
And yet there will still be mugs screaming "strong buy"
Easy pickings for shorters, rinse and repeat.
“That ''a simple lack of judgement by directors" isn't a breach of fudiciary duties.“
According to your logic, if you give your car to a valet parking service to park it, and instead they go for a joyride and crush it into a tree, it is only a “simple lack of judgement” on their part, not a breach of their duty. Of course, you are not entitled to any compensation for the destroyed car, because it was a “lack of judgement” on their part, and you have to foot the bill for it.
It seems the job of directors nowadays is to load companies with debt and enter administration with them, to prolong their jobs.
I think anyone who is responding to Pearls is humouring him now. Not that they have to justify their continued interest to you PC Plod or anyone else for that matter.
Only a real saddo would claim to filter people then come back to stalk them
Pearls, I have to laugh that it appears to be the shorters who "cannot move on" :-)
I have seen shareholder action groups on other threads - tbh I cannot recall any being successful but if some shareholders want to take this further (especially SPD) then it's their business if they do so - most will agree there are unanswered questions. It would have been "better" if the company had simply ceased but it continues and so do the directors in their jobs. I do wonder if any successful court case for shareholders (again I repeat it probably has literally a zero chance of success) has an impact on those with a short position?? Might explain their continued interest :-)
Pearls you do realise "what appears an appalling use of the pre-pack process" doesn't mean it's illegal.
That ''a simple lack of judgement by directors" isn't a breach of fudiciary duties.
The rules may need looking at, or not, but it still doesn't mean what's happened is illegal and so merits compensation.
Given the cost of corporate litigation, think millions, against what was a low capitalistion value at the time, unless its very clear cut it's unlikely any one will try to start litigation. It's a simple commercial judgement.
If it so obvious they wont wait for the Supreme Court, they would have started now.
I would have thought that those thinking of bringing a court case will wait for the current Supreme Court ruling as it will massively change things.
As the CityAM article pointed out the way the Board behaved was completely unacceptable, but a Supreme Court ruling allowing class action against the administrators, is now what's required.
I contend that if it had not been so easy for DEB's Board to deliberately increase their debt from £260m to £740m within a three month period in an effort to thwart MA and avoid his EGM by putting the company into administration; then they would never have pursued such a ridiculous debt loading of this company.
The directors were clearly much more interested in saving their jobs than in acting in shareholders best interests.
Any talk of compensation for shareholders due to the administration is delusional at this point. No-one wanted to buy this business at full value of the debt even with a CVA pretty much in place. That tells you everything you need to know.
If you think directors broke the law in giving public statements to shareholders (think October 2018), that's a different matter. However, I think it's very very unlikely as all directors can claim that everything was based on information at the time
"Is anyone actually bringing a case"
No sign of any case.
If it's anything like Noel's claim against Lloyds I suggest it might be worth checking in sometime after 2030.....
Is anyone actually bringing a case
Or are we all dreaming
The publicity and precidence surrounding this could well turn any legal action into a test case of significant importance in company law. Lawyers love this sort of challenge, especially the professional acknowledgement that results from having their names written into case law.
"Silver - you are one dense piece of wood"
Harsh, but funny.
We are making some real progress here. Silver has accepted there are "new owners of the new company". And, there might not be any illegality "in the event of any finding of illegality".
That's progress.
The poor bond holders don't get any compensation, it's only the shareholders apparently, All creditors can go whistle for their money.
We even have a number, 5p, for the compensation. Just for the shareholders mind, and really wont be much help to any that bought and sold above that price and weren't on the register on "A" day! I'm sure they'd do the obvious and launch their own claim.
It appears for lenders, creditors, bond holders and past shareholders common law breaks down and they don't deserve compensation.
Spoons has also pointed out that "limited companies" provide protection for shareholders.
We know that last value the market placed on the business was 0, no one wanted to buy it in the Lazards porcess.
So, I guess the most logical thing for the new owners to do, after this imaginary court case, whould be to make use of those "Shareholders have limited liability" laws and before paying any compensation pheonix it through administration.
Afterall, as shareholders they reign supreme when it comes to not taking a hit.
I guess all that explains why it's a very, very, very rare occurence for administration to be unwound in the way Spoons describes.
Silver - you are one dense piece of wood
It will be up to the court to decide who pays in the event of any finding of illegality, however if it was found that the law was broken and that the administration should have not have occurred when it did then the process will have to be unwound. Now this would obviously be prohibitively expensive and at this point the new owners of the new company would probably negotiate a settlement with the previous shareholders. IMO as a minimum this would probably equate to the offer being proposed at the time of 5p a share, though it could very well be more.
This is the last time I will post here. Its painful reading some of the brainless messages being posted here and trust me my intention is not to insult. If people think they will ever get a cent back here they are delusional. The same poor decision making illogical thinking that told them they would get rich from debs is still telling them there is hope. Sleepwalkers!