Member Info for Franalex

Must have been much worse than people were being told.

I am sure the auditors will try and hide behind the directors Letter of Representation but this is not a case of sudden downturn in business or collapse of say commodity price, to me it looks like poor controls and overstated profit in prior years therefore why no auditor comments.

And where are the auditors in all this? So far their role in auditing and signing off the accounts as a going concern has been barely mentioned on this site.

Can I remind you that you were the one who responded in capital letters, to a post of mine that debt for equity won�t work (why capitals?) and that recovery had to come first (again using capitals). My only response was that time will tell. I have no problem with anyone having an opinion but statements are being made that are factually incorrect that should have been checked out before posting them as if they were correct.

No I didn�t I was correcting someone who seemed not to understand the difference between liquidation and administration and said liquidation was very unlikely for reasons I clarified.

Nothing to do with the auditors to start with and even the insolvency practicioners who will be advising simply can�t just �slice it up and hand it out�. Too many comments being made by individuals with almost zero practical experience or even theoretical knowledge.

Customs and excise has not existed since 2005 when they were merged with the inland revenue to form HMRC.

Juno11. Sorry but you are wrong. There is a massive difference between administatration and liquidation and trade Creditors do not necessarily lose out, in an administration. If you look at the administration report of AEA PLC for example, most trade Creditors were paid in full by the acquirer (Ricardo PLC) not because they had to but because the continuing business relation and service provision was key. Secondly, HMRCs priority position as a creditor ended years ago. Banks are not necessarily second as Creditors with specific security, eg asset finance rank ahead. Please do not mislead people.

I am afraid many of them are, as the meeting will be pack with insolvency practicioners and lawyers, many of whom will be senior and cost over �600/hour!

Illbetabuck, I think you have missed something, there is a rule of thumb that in businesses where the sales ledger is relating to the provision of services on long term contracts rather than the sale of widgets, then in a liquidation (not necessarily in an administration) then only 25% to 30% of debts are recoverable, due to clients claiming that the contract was not fully performed. I think you would find any experienced insolvency practitioner would concur with this based on experience. The owners of debt will be fully aware of these stats and will try and avoid liquidation. The recovery rate in an administration is much higher, generally 80%+ if someone takes over the contract supply.