Farepak & Administrators

[jonny72]

So the people that lost out when Farepak went tits up were due £5.7m back (about a 1/7th of what was owed) but the costs of winding the company up have now reached £8.2m. Which I guess means they now won't get anything?

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8919297/Farepak-fees-reach-8.2m.html

What I don't get is how the fuck the administrators and other similar groups (lawyers, insurers, media relations etc) are allowed to earn so much money from bankrupt companies. You see the same with football clubs and it appears to be little more than them lining their own pockets and being allowed to get away with it.

Why can't the Official Receiver or another government body be put in sole charge of winding up companies with a mandate of doing it as cheaply as possible to get as much money back to those that deserve it rather than the fucking fat cats.

[THE FLASH]

Bust? I'm still paying a woman down the road £15 a week!?

[leefer]

Thats for a different kind of hamper though Flash.

[nevillew]

So the people that lost out when Farepak went tits up were due £5.7m back (about a 1/7th of what was owed) but the costs of winding the company up have now reached £8.2m. Which I guess means they now won't get anything?

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8919297/Farepak-fees-reach-8.2m.html

Nowhere in that article does it suggest that the agreed amount of 15p in the pound won't be paid does it ?

[Bob's Orange]

That's going to 'hamper' their Xmas spending. Ho Ho

[Phil_S]

What I don't understand is the sheer cost of these things. How does it cost over £8,000,000 to wind up a company.? Surely it's a case of selling the assets & dividing the money raised between the creditors.
Same thing applies to a lot of public spending. eg Cost per mile of rail electrification, cost of building roads, money overspent by the MoD  etc. I recall reading that putting cables underground rather than on pylons would cost £40,000,000 per mile. My reaction was I would dig the trenches myself by hand for less than 10% of that.   

[Batch]

I guess some of it is tied to the number of creditors. They were speculating on the radio that the cost of sending a letter to everyone was £40K in first class stamps alone.

Plus - administrators are expensive. Solicitors are expensive. I doubt anything is done for free.

[horlock07]

Just remember what Andronikou has done here and elsewhere in the past.... then it all makes sense.

[jonny72]

Nowhere in that article does it suggest that the agreed amount of 15p in the pound won't be paid does it ?

It doesn't say they will and it doesn't say they won't, hence me posing the point as a question rather than a statement. Though it does infer that the money put aside to pay out is going to be used up by the professional fees.

[Phil_S]

I guess some of it is tied to the number of creditors. They were speculating on the radio that the cost of sending a letter to everyone was £40K in first class stamps alone.

Plus - administrators are expensive. Solicitors are expensive. I doubt anything is done for free.

Expensive yes, but if each set of letters cost say £50,000 at £8,000,000 thats a hell of a lot of letters, surely you would only need 2 or 3 mail outs.

[Batch]

Expensive yes, but if each set of letters cost say £50,000 at £8,000,000 thats a hell of a lot of letters, surely you would only need 2 or 3 mail outs.

You'd think so. It just seems the norm that these bills come out as massive amounts. Andronikou has already been mentioned, and Plymouth's administrators had to cut for the takeover to go through after they racked up a mountain of fees.

You may think the creditors are being fleeced, I couldn't possibly comment.

[jonny72]

They've got a license to print money and they use it. If there were more controls, they were made to justify their bills and if they weren't first in line to get paid with what is left then I'm sure things would be different. Same thing with divorce, no benefit to the solicitors in reaching a speedy conclusion, the longer they can drag it out the more they get paid.

Its crazy that Farepak owed £38m and the winding up fees are going to be 25% of that. Even more crazy that it's taken the equivalent of 16 people working full time for 5 years getting paid £100k each a year to wind it up and they still haven't finished the job. Someone is taking the piss.

[Simon Pieman]

I bet a government body would probably of spent the same. The difference would be that the taxpayer stumped up to pay their 'fees'.

An absolutely phenomenal amount though.

[THE FLASH]

Thats for a different kind of hamper though Flash.

yeah, a humper!