BHS 'could file for administration' threatening 11,000 jobs on Monday

Rich2808

Perhaps there should be some more scrutiny of the sums Phillip Green borrowed and the cash he took out of the company before selling it for £1.

Let's not start attacking relatively low paid shop workers and what I would expect are their relatively modest pensions.

antrobus

theblagger wrote: »

Department store is set to go into administration on Monday if £60m short-term funds are not found
...

Let's be honest about this; BHS was sold for a £1 to some corporate vehicle controlled by some bloke with a long list of prior business failures and one personal bankruptcy.

The only thing that surprises me is that it lasted as long as a year before hitting the wall.

michaels

Rich2808 wrote: »

Perhaps there should be some more scrutiny of the sums Phillip Green borrowed and the cash he took out of the company before selling it for £1.

Let's not start attacking relatively low paid shop workers and what I would expect are their relatively modest pensions.

antrobus wrote: »

Let's be honest about this; BHS was sold for a £1 to some corporate vehicle controlled by some bloke with a long list of prior business failures and one personal bankruptcy.

The only thing that surprises me is that it lasted as long as a year before hitting the wall.

Both of these, didn't Mr Green take a huge dividend from Arcadia at one point when BHSA was still part of it and then to avoid the embarrassment (and potential discussion of sharp practice) of closing it down did a Rover/BMW/Pheonix type deal so that the 'blame' was elsewhere when TSHTF.

Sadly I fear similar will happen with Port Talbot steel works

antrobus

Rich2808 wrote: »

...Let's not start attacking relatively low paid shop workers and what I would expect are their relatively modest pensions.

Just as well then that no one has actually been atacking any shop workers, low paid or otherwise.

michaels wrote: »

Both of these, didn't Mr Green take a huge dividend from Arcadia at one point ...

I don't think so. Mr Green doesn't own Arcadia. Mrs Green owns Arcadia, via some Jersey company, I think.

michaels wrote: »

...when BHSA was still part of it and then to avoid the embarrassment (and potential discussion of sharp practice) of closing it down did a Rover/BMW/Pheonix type deal so that the 'blame' was elsewhere when TSHTF...

I think it's more a question of distancing oneself from the pension deficit.

vivatifosi

stator wrote: »

How is the scheme that covers pensions when a company goes into liquidation funded? Is it from all of our pensions, they take an anual fee, or is it covered by the government directly?

Assuming it is a defined benefit scheme, they will have been paying a levy to the PPF. The size of the levy is a formula that takes into effect things like the size of the deficit and the strength of the employer covenant. The weaker a firm's position, the more it pays.

In the event that a firm goes bankrupt, existing pensioners are protected. Deferred pensioners should get 90% of what they were expecting. That's my understanding anyway.

lewisa

Rich2808 wrote: »

Perhaps there should be some more scrutiny of the sums Phillip Green borrowed and the cash he took out of the company before selling it for £1.

As a recent owner, Mr Green can still be chased for the shortfall in the pension scheme. He has offered a one off payment of £80 million, but the regulator may push for more.

kabayiri

Generali wrote: »

I don't think it is yet. I think there are some very difficult decisions that are going to have to be made ((c) T. Blair Esq) in the future regarding intergenerational transfers of cash but that is some way off from being forced on the UK. I guesstimate 20 years although immigration is delaying the day of reckoning.

It might be just my selective reading, but I believe the public narrative is used nowadays to precede policy.

Cameron and Osborne will talk about "all in it together" when it suits, but just as easily they will throw in a barbed comment about how junior doctors fare pretty well compared to the population.

If you look on DT the BHS issue got retuned to a comment over the pensions divide between public and private.

The immigration issue could be more about the uneven nature by which resources get used. We have generated our own problems by not front loading spending anywhere near enough to cater for the increased demands from larger numbers.

[As for T. Blair enterprises, I'm all out of answers on that sorry episode in our history ]

kabayiri

michaels wrote: »

Both of these, didn't Mr Green take a huge dividend from Arcadia at one point when BHSA was still part of it and then to avoid the embarrassment (and potential discussion of sharp practice) of closing it down did a Rover/BMW/Pheonix type deal so that the 'blame' was elsewhere when TSHTF.

Sadly I fear similar will happen with Port Talbot steel works

He took 2 large dividends. I believe the second was funded via a loan against the company.

To be accurate, I believe Mrs Green is often the direct beneficiary. I'm just hoping their marriage is pretty water tight!

It's easy to complain at Green, but how is Glazier/Man Utd deal any different? They leveraged debt on to the controlling company and have regulary taken 50m+ dividend out each year, for very little of their own money input.

kabayiri

vivatifosi wrote: »

Assuming it is a defined benefit scheme, they will have been paying a levy to the PPF. The size of the levy is a formula that takes into effect things like the size of the deficit and the strength of the employer covenant. The weaker a firm's position, the more it pays.
...

Thanks

Is the PPF designed to be self funding? Can it easily cope with a £500m hit?

antrobus

kabayiri wrote: »

He took 2 large dividends. I believe the second was funded via a loan against the company....

I have the FT telling me that Green acquired BHS in 2000, and received dividends of £164.5m in 2002 and £40m in 2004.

kabayiri wrote: »

...To be accurate, I believe Mrs Green is often the direct beneficiary. I'm just hoping their marriage is pretty water tight!

The biggie was the £1.2 billion in 2005. Tina got that one.

kabayiri wrote: »

.....It's easy to complain at Green, but how is Glazier/Man Utd deal any different? They leveraged debt on to the controlling company and have regulary taken 50m+ dividend out each year, for very little of their own money input.

Thames Water and Macquarie springs to mind.