Contributed by Mr Ron Redgewell
e are all aware of the effects of the bankers’ ignorance concerning the quality of the sub-prime so called ‘bundles’ that they purchased, principally from the USA. Little is written about the persons who sold these ‘bundles’, they must have made a fortune for their employers, and large bonuses for themselves.
But what about the many organisations, who have been affected by the collapse in funding as bank loans are called in and new ones are not forthcoming (for our mid-Atlantic readers, upcoming). The result can be going into ‘Administration’, where a team of accountants take over the enterprise, attempt to raise as much money as they can to pay off the organisation’s creditors. These accountants and their staff do not work for nothing and in highly complex situations the process can take many months, entailing hundreds if not thousands of staff hours.
The Newcastle-under-Lyme Society, in our small way, has been caught up in one such Administration due to the demise of The Civic Trust established in 1957. We are unsecured creditors to the extent of £60. By law the large, national, accountancy firm dealing with this matter must keep us informed of their endeavours, showing the monies received and the payments made by them as they undertake the Administration of The Civic Trust. Furthermore, the Joint Administrators are required to provide a summary of their time costs and disbursement (incidental expenses) charges.
The relevant figures for the first six months of Administration have been sent to the Society and show that a total of 565 staff hours, across all grades from filing clerk to partner, have been charged, at a total cost of £131,273.20, giving an average hourly rate of £231.95.
Readers of the local newspaper, no payment no name, might recall the furore that was raised when hourly rates were published associated with the Administration of a well known table- and gift-ware firm (no payment etc!). Comment was made about the apparent excessive hourly rates being charged for the various grades of staff. Why was the Administration conducted from London? Thereby attracting City rates, when there were accountancy firms in the Region, let alone North Staffordshire, who could have been appointed at a lower cost, as well as providing Regional employment.
I am pleased to report that those dealing with The Civic Trust are based in the Liverpool office of the national firm. Notwithstanding this, the Society has been informed that, “The latest estimate is that it is unlikely that there will be a dividend to unsecured creditors”.
I am reminded of the comment made by the Chairperson of a national funeral company, “Ours is not a growth company, but we increase our income by others’ misfortune”. [Registered Charity No. 256384. Society founded in 1968]