What happened at Clerys

RainyDay

pedroeibar1 wrote: »

(ii) You're an engineer (I don't know what type) but were you to buy a machine for resale knowing that it was damaged and could be improved by repair/repaint/refurbish, would you not do all those things also? That's the equivalent to what Gordon Bros/Atrium did ('cept in retail real people are involved, not robotics).

You left out the bit about diamond in the machine, and the people who had a legal interest in the value of the diamond, but then how you pulled the diamond out and put it out of reach of those people.

OK, so it's a slightly strained metaphor but you get the point. The situation was engineered to put the value of property out of reach of the employees, who had a legal entitlement to minimum redundancy and a moral entitlement to something more than that.

pedronomix

RainyDay wrote: »

You left out the bit about diamond in the machine, and the people who had a legal interest in the value of the diamond, but then how you pulled the diamond out and put it out of reach of those people.

OK, so it's a slightly strained metaphor but you get the point. The situation was engineered to put the value of property out of reach of the employees, who had a legal entitlement to minimum redundancy and a moral entitlement to something more than that.

The game was up when Clerys went bust in 2012, the employees would have only received statutory payments then, same as now. Far too many deluded left wing conspiracy theorists around here. Commercial reality and that genre are not miscible.
That so few found alternative employment tells it's own story. I do feel sorry for them as individuals but their talents/skills/relevance to the marketplace today is without demand. The only thing special about them is that the store/business itself was iconic, clearly not something of real value.

RainyDay

pedronomix wrote: »

The game was up when Clerys went bust in 2012, the employees would have only received statutory payments then, same as now. Far too many deluded left wing conspiracy theorists around here. Commercial reality and that genre are not miscible.

And it would have been paid for from the proceeds of selling the building. Instead, Gordons / Natrium did some financial engineering to put it beyond reach of the employees, and the State was left to pick up the bill for minimum statutory redundancy payments.

pedronomix wrote: »

That so few found alternative employment tells it's own story.

How exactly did you find out that 'so few of them found alternative employment'?

pedronomix

The banks had the buildings as security so they were never available to to the employees and the other creditors had superior claims over anything above statutory redundacy. Take off the blinkers or educate yourself on the rules and regulations of business.

RainyDay

pedronomix wrote: »

The banks had the buildings as security so they were never available to to the employees and the other creditors had superior claims over anything above statutory redundacy. Take off the blinkers or educate yourself on the rules and regulations of business.

From http://www.reddycharlton.ie/news-and-publications/single-view/article/employers-insolvency-q-a/?cHash=2f52978594cd20fc5d5fe5b53eb83d8f

7. How are employees’ debts treated in the distribution of the employer’s assets?

Bankruptcy and company legislation give preferential creditor status to employees for certain debts in the distribution of the assets of the company or the bankrupt. This means that specified employee debts are given priority in the distribution of assets after the payment of the secured creditors and the liquidator’s/official assignee’s remuneration and expenses. However preferential creditor status only offers protection to the employee where there are adequate assets to discharge the debts due.

Where an employee has received a payment in respect of a debt from the Social Insurance Fund that employees rights and remedies in respect of that debt are transferred to the Minister for Enterprise, Trade and Innovation. Accordingly the Minister becomes a preferential creditor in the priorities of creditors. Furthermore the debt due to the Minister shall be paid in priority to any unsatisfied claim of the employee.

pedronomix

RainyDay wrote: »

From http://www.reddycharlton.ie/news-and-publications/single-view/article/employers-insolvency-q-a/?cHash=2f52978594cd20fc5d5fe5b53eb83d8f

7. How are employees’ debts treated in the distribution of the employer’s assets?

Applies to statutory entitlements only!

RainyDay

pedronomix wrote: »

Applies to statutory entitlements only!

Yes, I was referring to statutory entitlements in this post - but strange how you left that important point out of your earlier claim that "they were never available to to the employees ".

pedronomix

Dealt with in post #35, the secured creditors took control of them by appointing a receiver to Clerys.

TheFin

From what I read in newspapers at the time I dont thnk there is any justification for treating the Clerys employees and concession holders in the manner they were. Textbook example of how not to treat people

pedronomix

Company closures never end well, there are always losers. If laws were broken, then the perpitrators should be legally held to account. The reality is that nice/fair/reasonable/deserving etc do not have any legal standing.

Duckett

while described as "clever" the reality is the actions taken lacked integrity. The practitioners behind this deal can cower behind the letter of the law but the staff and concession holders deserved better. If this is best practice we all need to hang our heads in shame - there was no need to execute the closure so brutally - the job of managers is to manage what ever mess they face and not to treat staff etc with contempt.

pedroeibar1

Duckett wrote: »

while described as "clever" the reality is the actions taken lacked integrity. The practitioners behind this deal can cower behind the letter of the law but the staff and concession holders deserved better. If this is best practice we all need to hang our heads in shame - there was no need to execute the closure so brutally - the job of managers is to manage what ever mess they face and not to treat staff etc with contempt.

The topic of the OP is the legality of the actions of the various owners of Clerys. I very much doubt if the vendors are (to use your expression) “cowering behind the letter of the law” (or even hiding behind it!) They saw a business opportunity, they took a very big risk, and they took the profit in a legal manner. The employees & concessionaires could have done an MBO had they wanted to. That is what capitalism is about. The laws in relation to Employment and corporate governance were not broken. The commercial morality and integrity of the decisions make for a separate topic.

Nobody here has said the manner of closure was “best practice”. Both the other Pedro and I (and many others) have expressed sympathy for the concessionaires also adding that the facts are not known …so conjecture by you, me, a Minister or anyone else is a waste of time.

There is no doubt the closure was mishandled from a PR perspective, but there never is an easy way. All closures are brutal, just as redundancies are. What if the owners of Clerys continued to trade at the expense of its creditors? Not only would the staff lose jobs on liquidation, the suppliers also would have been heavily hit and the domino effect would have happened (not to mention sanction of the directors). No doubt posters here would then be jumping up & down writing about “reckless trading” and lack of “best practice”.

pedronomix

Duckett wrote: »

while described as "clever" the reality is the actions taken lacked integrity. The practitioners behind this deal can cower behind the letter of the law but the staff and concession holders deserved better. If this is best practice we all need to hang our heads in shame - there was no need to execute the closure so brutally - the job of managers is to manage what ever mess they face and not to treat staff etc with contempt.

I agree but the reality of such vulture investors is that there is no God other than cash!

RainyDay

pedroeibar1 wrote: »

The topic of the OP is the legality of the actions of the various owners of Clerys. I very much doubt if the vendors are (to use your expression) “cowering behind the letter of the law” (or even hiding behind it!) They saw a business opportunity, they took a very big risk, and they took the profit in a legal manner. The employees & concessionaires could have done an MBO had they wanted to. That is what capitalism is about. The laws in relation to Employment and corporate governance were not broken. The commercial morality and integrity of the decisions make for a separate topic.

Nobody here has said the manner of closure was “best practice”. Both the other Pedro and I (and many others) have expressed sympathy for the concessionaires also adding that the facts are not known …so conjecture by you, me, a Minister or anyone else is a waste of time.

The facts are fairly clear. They took a pile of cash off the concessionaires at 5pm, and closed the business at 6pm pocketing the cash.

But keep defending....

pedronomix

RainyDay wrote: »

The facts are fairly clear. They took a pile of cash off the concessionaires at 5pm, and closed the business at 6pm pocketing the cash.

But keep defending....

Interesting that you now divert to the concession holders issues, which have been clearly and openly opined upon by both Pedros. You are a waffler sir!

pedroeibar1

RainyDay wrote: »

The facts are fairly clear. They took a pile of cash off the concessionaires at 5pm, and closed the business at 6pm pocketing the cash.

But keep defending....

Oh dear! Your comments are as clear as muddy water.
Firstly, I never defended anything, I pointed out(a) the legalities and(b) the paucity of information in the public domain on which to base comment.
Secondly, you are wrong in saying "they" pocketed the cash; "they" did no such thing.:rolleyes:
Thirdly, the liquidator has a duty of care to all the creditors, and not just the concessionaires, so his actions must abide by and reflect that. (Go look it up)
Fourthly, the concessionaires (it would seem from media comment) had a try-on with the amounts owed to them, yet the lawyers for the liquidators immediately acknowledged that the "Trust" for the concessionaires appeared valid (subject to court approval). And on that basis made an interim payment to them;)
I'l not bother to continue, you have enough. You have a chip and/or an agenda, and it is very clear that you are out of your depth.
If you want to argue come back with FACTS, sources and details, not half-a$$ed ill-informed opinion.;)

RainyDay

pedroeibar1 wrote: »

Secondly, you are wrong in saying "they" pocketed the cash; "they" did no such thing.:rolleyes:

What am I missing here? They took the cash of the concessionaires at 5pm, knowing well that they were closing down the business within the hour.

Duckett

Company Law Review Group is to review law and recommend ways to ensure better safeguards for employees and unsecured creditors. The overnight closure of Clerys was a shock to everyone, not least to the 460 workers who lost their jobs. But, what was deeply disturbing was the callous treatment of the workers, some of whom had dedicated a lifetime to Clerys. They were left high and dry by the owners and it was up to the State, to taxpayers, to fund their statutory redundancy payments. Most people were deeply disturbed by this conduct – predatory capitalism at its very worst. While employment law and company law have been devised for different purposes, the review group must examine what changes could be made to better protect employees.

Graham

RainyDay wrote: »

What am I missing here? They took the cash of the concessionaires at 5pm, knowing well that they were closing down the business within the hour.

I'm not sure there was any alternative. It's not like they could have gone around at the end of the day and handed out bundles of cash.

Weren't funds held in trust for the concessions? Wasn't that returned to them (or in the process of being returned to them)?

Duckett wrote: »

Company Law Review Group is to review law and recommend ways to ensure better safeguards for employees and unsecured creditors. The overnight closure of Clerys was a shock to everyone, not least to the 460 workers who lost their jobs. But, what was deeply disturbing was the callous treatment of the workers, some of whom had dedicated a lifetime to Clerys. They were left high and dry by the owners and it was up to the State, to taxpayers, to fund their statutory redundancy payments. Most people were deeply disturbed by this conduct – predatory capitalism at its very worst. While employment law and company law have been devised for different purposes, the review group must examine what changes could be made to better protect employees.

Increased employee protection may have done the employees more harm than good. They could have found themselves redundant during the 2012 receivership if potential buyers were put off by overly onerous 'protection'.

pedroeibar1

For starters, the statement by Rainy remains incorrect due to his/her choice of language and inability, obtuseness or unwillingness to accept the current legal position, in - FWIW- a corporate law environment that was reviewed for a decade and enacted just six months ago.

Secondly, Duckett, the Bruton/Nash comments largely are waffle, window-dressing and on a par with the "statements" and "instructions" to the insurance companies vis-a-vis flood insurance. Also, much of what they say is already covered by the new 2014 Act.

Also, it's more complex than you have outlined, as there are two reports requested.
The Company Law Review Group is to explore:
· Instances where the corporate veil should be lifted
· The strengthening of Directors’ Duties to employees
· Checks and balances to strengthen obligations to employees for better protection in company restructuring
· Circumstances in a liquidation of an insolvent company where company liabilities can be met from solvent companies in the same group or in related companies.
The second report will be from the Chirman of the Labour Court and a BL.

I cannot see much changing - maybe, possibly, a longer 'waiting period' before a company can fold, but any change there and in most of the 'notions' above would be open to challenge in Europe.

See more here

RainyDay

Graham wrote: »

I'm not sure there was any alternative. It's not like they could have gone around at the end of the day and handed out bundles of cash.

Weren't funds held in trust for the concessions? Wasn't that returned to them (or in the process of being returned to them)?

They could have closed at 4pm, and NOT taken the cash, instead of taking the cash and closing at 5pm.

pedroeibar1

Those who believe Clerys is a unique event should read up on the closure (for example) of Irish Fertilizer Industries, another dog of a company where the suppliers and employees got stuffed to the best part of €100 million. From memory the creditors got about 25% of what they were owed, and among them were the employee pension funds. The shareholders BTW were this State and ICI, who both walked, so does anyone really believe that Bruton/Nash are going to put the State on the hook by excluding this type of "cut & run" from law?

pedroeibar1

RainyDay wrote: »

They could have closed at 4pm, and NOT taken the cash, instead of taking the cash and closing at 5pm.

Not legally possible.Go read the law and stop digging:rolleyes:

RainyDay

pedroeibar1 wrote: »

Not legally possible.Go read the law and stop digging:rolleyes:

So there is legislation around what time you notify people about the time of company closures? Sure thing....

Oh hold on - I forgot the most important bit: :rolleyes:

pedronomix

RainyDay wrote: »

So there is legislation around what time you notify people about the time of company closures? Sure thing....

Oh hold on - I forgot the most important bit: :rolleyes:

And there I was thinking this post was about timing and how the cash on hand should be dealt with!! Sharp as a marble is me.

RainyDay

pedronomix wrote: »

And there I was thinking this post was about timing and how the cash on hand should be dealt with!! Sharp as a marble is me.

Vague as a mirage is you. Claiming that a timing issue is against the law but no detail of what particular law you are referring to - the FUD approach?

pedroeibar1

RainyDay wrote: »

So there is legislation around what time you notify people about the time of company closures? Sure thing...

Nobody said or hinted at that, so stop dreaming and clutching at straws that do not exist.

From the limited amount of information we do know, there is a trust agreement between the store operators and the concessionaires. It is obvious to anyone who has even a remote idea of how a trust receipt operates and how these agreements are drafted that the funds in the tills are held by Clerys. That is for a very good reason – Clerys deducts from those funds whatever concession fees are due. There are several possibilities as to why it should not be done, least of all is a general one - allowing the concessionaires to take the cash in the till could be construed as fraudulent preference, as there would be no hope of recovering the sums due from the concessionaires to distribute to the other creditors.

pedronomix

RainyDay wrote: »

Vague as a mirage is you. Claiming that a timing issue is against the law but no detail of what particular law you are referring to - the FUD approach?

This refers to nothing I posted, you are more than a bit confused, on several fronts. Every time your points get exposed as waffle, you raise one of equal quality.

newacc2015

Duckett wrote: »

Company Law Review Group is to review law and recommend ways to ensure better safeguards for employees and unsecured creditors. The overnight closure of Clerys was a shock to everyone, not least to the 460 workers who lost their jobs. But, what was deeply disturbing was the callous treatment of the workers, some of whom had dedicated a lifetime to Clerys. They were left high and dry by the owners and it was up to the State, to taxpayers, to fund their statutory redundancy payments. Most people were deeply disturbed by this conduct – predatory capitalism at its very worst. While employment law and company law have been devised for different purposes, the review group must examine what changes could be made to better protect employees.

Anyone who didnt see the closing of Clearys eventually was extremely naive. If you read the Business section of any paper you could see Clearys was doomed. They failed to have a niche or anything unique about the Business. It was like stepping in 1989 when you went into the store and not in a good way. While Arnotts and BT were getting the latest brands and concessions. Cleary's was adding a low value sweet shop or a bad line of electrical goods. There was nothing unique or enjoyable visiting Cleary's.

Cleary's killed itself. If you arent following market trends or setting them. You will go out of Business eventually. There is no exception to this rule. Cleary's will be replaced by a more modern Business, that people actually want and need. It will hire probably more people did Cleary's ever did as it is supplying what people want.

RainyDay

pedroeibar1 wrote: »

From the limited amount of information we do know, there is a trust agreement between the store operators and the concessionaires. It is obvious to anyone who has even a remote idea of how a trust receipt operates and how these agreements are drafted that the funds in the tills are held by Clerys. That is for a very good reason – Clerys deducts from those funds whatever concession fees are due. There are several possibilities as to why it should not be done, least of all is a general one - allowing the concessionaires to take the cash in the till could be construed as fraudulent preference, as there would be no hope of recovering the sums due from the concessionaires to distribute to the other creditors.

How would closing at a particular time be considered 'allowing the concessionaires to take the case' when closing at a different time is NOT considered to be 'pocketing the cash'? You can't have it both ways. THis was clearly orchestrated to take money that was due to the concessionaires into the receivership in a very sneaky and underhand way.