Social housing servicing group Connaught 'nears administration'

cavework

dylanwing wrote: »

i would just like to point out that my mother & father-in-law are not scum, nor are my many friends in social housing, most of whom work. May i respectfully suggest that you remove your head from your anal passage and try reading something more grown-up than the daily mail. Maybe then you will be less of an anally-!!!!!! bigot.

love it!
:T

Really2

3 of their 4 companies are going to carry on trading according to the administrators.

Thrugelmir

lemonjelly wrote: »

The contracts will be cancelled as a result of going into admin. As the company effectively ceases trading, they are unable to keep their side, therefore the contract expires.

The HA's will put new contracts out for tender. Alternative companies (like connaughts) will bid for the contracts.

When a Company enters administration. The appointed administrators will keep the business running whilst they attempt to find a buyer for the business. During the period of administration they may cut staff, sell assets with the aim of making the core business financially stable and securing employment for as many employees as possible.

The Company does not stop trading. A company which goes into liquidation ceases to trade. As there is no possibility of the business being able to continue to trade.

The fact that Connaught has plenty of contract work guarantees the administrator revenue ( and therefore income) to maintain the business.

Really2

Thrugelmir wrote: »

When a Company enters administration. The appointed administrators will keep the business running whilst they attempt to find a buyer for the business. During the period of administration they may cut staff, sell assets with the aim of making the core business financially stable and securing employment for as many employees as possible.

The Company does not stop trading. A company which goes into liquidation ceases to trade. As there is no possibility of the business being able to continue to trade.

The fact that Connaught has plenty of contract work guarantees the administrator revenue ( and therefore income) to maintain the business.

I agree with all the above, but going in to administration could cause some public sector/ HA body's to cancel contracts. (they usually have clause relating to liquidity/ administration)
I should say some of the body's that have had poor service could look at reviewing service.
Not saying many will though as half the time it can leave them without cover and end up costing them more.

Keeping 3 of the 4 businesses operating means they are confident of turning them round and selling them.

Thrugelmir

Really2 wrote: »

I agree with all the above, but going in to administration could cause some public sector/ HA body's to cancel contracts. (they usually have clause relating to liquidity/ administration)

Most local authorities like to contract out on the basis of 3 year terms. As they are obliged to go through a tender process to appoint new contractors whatever the service. This takes time. So immediate cancellation is not an option.

Whilst the senior management may have failed. Many companies have good line managers who rise to the challenge when the going gets tough. Nothing like saving your job to incentivise you! Adiministration also offers the opportunity to radically restructure a Company. Clear out dead wood and departments. Often whats left is a far leaner and fitter organisation. Though far smaller.

Really2

Thrugelmir wrote: »

Most local authorities like to contract out on the basis of 3 year terms. As they are obliged to go through a tender process to appoint new contractors whatever the service. This takes time. So immediate cancellation is not an option.

I agree on all but the bold bit, I supply to the public sector and see a lot of tenders. A lot have clauses for options to break in cases of administration / insolvency.
Not saying it is going to be exercised, but a lot do have such clauses.
For obvious reasons they are there, they could have no service should the contractor be wound up.
I agree imediate break is not an option as I said before it would leave them without provision of service. But you could give notice and go through a new process in less than a month.

Thrugelmir

Really2 wrote: »

I agree imediate break is not an option as I said before it would leave them without provision of service. But you could give notice and go through a new process in less than a month.

When a Company the size of Connaught hits trouble. There are few businessess that could gear up and offer a service in a time frame in as short as a month.

Really2

Thrugelmir wrote: »

When a Company the size of Connaught hits trouble. There are few businessess that could gear up and offer a service in a time frame in as short as a month.

Contracts are individual, (EG housing maintainence for XYZ HA in smallville, or samllville council) they will have 100's/1000's of contracts of varying size.
I presume they were not the only bidders when councils and HA's tendered for them originally so there have got to be people who can take on the work.
Not many companies would get the decision if they did not have provisions in place to currently undertake the work, gearing up to fulfil on the basis of award is fround upon in many cases (as proof of delivery is not there).
One month from submission to decision is not a short time for public tenders.

Degenerate

Really2 wrote: »

I agree on all but the bold bit, I supply to the public sector and see a lot of tenders. A lot have clauses for options to break in cases of administration / insolvency.

I may stand to be corrected, but as I understand it, they don't even need such clauses. On entering administration, the company is effectively frozen in time, with all it's legal liabilities left suspended in the old company, the assets of the going concern are then immediately transferred into a new company (Which would generally be called "Connaught (in administration) Ltd"), to be managed by the administrators to run/break-up/sell-off in whatever way generates the maximum value to return to the creditors. It has to be done this way to create a fire-break between the entity that continues to trade and the liabilities of the insolvent company, otherwise their suppliers will refuse do further business with them as they would have no assurance of getting paid.

I believe the effect of this is that is to leave all contractual obligations and entitlements behind too. The new company may continue to fulfill the pre-existing contracts, but is free to walk away from any loss-making ones, and likewise the customers may opt to end the relationship at any time. So any HAs that were unhappy with the service they were getting may take the opportunity to put contracts back out to tender, regardless of the remaining term.

Generali

Degenerate wrote: »

I may stand to be corrected, but as I understand it, they don't even need such clauses. On entering administration, the company is effectively frozen in time, with all it's legal liabilities left suspended in the old company, the assets of the going concern are then immediately transferred into a new company (Which would generally be called "Connaught (in administration) Ltd"), to be managed by the administrators to run/break-up/sell-off in whatever way generates the maximum value to return to the creditors. It has to be done this way to create a fire-break between the entity that continues to trade and the liabilities of the insolvent company, otherwise their suppliers will refuse do further business with them as they would have no assurance of getting paid.

I believe the effect of this is that is to leave all contractual obligations and entitlements behind too. The new company may continue to fulfill the pre-existing contracts, but is free to walk away from any loss-making ones, and likewise the customers may opt to end the relationship at any time. So any HAs that were unhappy with the service they were getting may take the opportunity to put contracts back out to tender, regardless of the remaining term.

My understanding of administration is slightly different.

If a company wants to enter administration they have to apply to the High Court to be able to do so. If they get permission then an administrator (generally a specialist accountant) is appointed.

Whilst a company is in administration, creditors can't sue the company to force it to pay its debts without the permission of the court.

The administrator's job is to try to negotiate with all creditors in order to try to rescue the company as a going concern and that will include people with whom the company has contracts running into the future. At this point a creditor would be unable to rip up a contract without the agreement of the High Court.

If the company is to come out of administration, all creditors including people with contracts with the company must agree to new terms. If they are unable to do so (the most likely outcome of administration) the company will be declared insolvent and wound up by selling assets. At this point, people that have contracts with the company being wound up can invoke clauses in those contracts that cancel the contract at that point. As a previous poster stated (and as these guys also state) most local Government bodies have a clause that terminates contracts upon insolvency.