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No. That's what a limited company is FOR. This protection is for a purpose and without modern business would collapse. Actual fraud is addressed by laws against... wait for it... fraud.Quote:
Originally Posted by Fermata
Anyway: the directors of a company are, contrary to what you seem to think, rarely its owners, especially for larger ones. They may own no equity at all! So making them automatically responsible for the debt associated with that equity is unfair and silly. To give an especially strong example: Company X is having problems but is probably saveable. Saving it requires new directors to run it. Should the new directors be responsible for the debt if it goes bankrupt? No one would take the job under those circumstances. The company would go broke, people would lose jobs, suppliers and customers would be owed money they'd never receive.
Laker wasn't "a rogue director": he was operating in good faith and driven out of business by very nasty tactics from BA combined with bad luck in purchasing a fleet of DC10s just when they were involved in a string of crashes:Quote:
Back in the 1980s there was an airline company called Skytrain, owned by Freddie Laker, it went bankrupt in the mid 80s. Skytrain was still taking money for future flights on the morning of the day it went bankrupt, knowing that there was no prospect of delivering those flights. When asked if this was fair and proper, Freddie Laker said 'You cannot touch me, this a Limited Liability Company'. He was right but further improvements to the Companies Acts are still allowing rogue directors to behave with impunity
https://en.wikipedia.org/wiki/Freddi...nd_of_Skytrain
Firstly, you're making a claim re. Laker without a source. In fact, everything I can find seems to indicate he was operating in good faith expecting a rescue.EgQuote:
Originally Posted by Fermata
https://en.wikipedia.org/wiki/Laker_Airways
The final blow came when British Caledonian (BCal) found out about a £5 million rescue package that McDonnell Douglas[120] and General Electric (GE), the suppliers of DC-10 widebodied aircraft and its CF6 engines to Laker as well as BCal, had put together.[nb 25][96][111] BCal wrote to other operators of the DC-10/CF6 in Europe saying that BCal on behalf of all European operators warned McDonnell Douglas and GE that in the event of the rescue for Laker being approved, none of these airlines would do business with those companies. McDonnell Douglas and GE did not go ahead. Laker Airways collapsed during the early morning of 5 February 1982 with debts of £270 million, the biggest corporate failure in Britain.
Secondly, you seem to be claiming that an unspecified change to the law was made as a result. I can't find any evidence on articles on Skytrain to suggest this.
I think you're confused and, honestly, don't know what you're talking about. To an EXTREME degree actually - because for Laker to say his personal assets were untouchable would have been idiotic, given that he had actually used them to secure the business!!!!
https://en.wikipedia.org/wiki/Laker_Airways
In addition to undercapitalisation, unsustainably high debts and weak finances, Laker Airways was not backed by any significant assets. The bulk of its fleet[nb 23] was leased, as was the maintenance hangar at Gatwick that also housed the airline's offices. The only financial backup that Laker Airways had was Sir Freddie's stud farm and his personal wealth... In July 1985, BA agreed to contribute an additional $35 million on top of its earlier out-of-court agreement with Sir Freddie and the $50 million other airlines named in the lawsuit Sir Freddie had filed in the US under that country's antitrust laws had collectively offered Sir Freddie in an earlier out-of-court settlement. The total amount contributed by all parties enabled Sir Freddie to pay off his outstanding debts of $69 million, permitted BA to proceed with its own privatisation and saved the other airlines from potential bankruptcy[106]
So the idea that Laker claimed to be protected from debt in this instance is just silly. Yes, you believe it - but people often believe things that are wrong. (Hint: any time you can't find respectable sources for your beliefs you should assume that you're wrong.)
Yes you are perfectly right, you have explained it perfectly.
Nothing more to be said on the subject.
The fact that I was there at the time is just crap isnt it.
I will delete my two posts because you know better than I do.
I remember Freddie Laker being interviewed on the TV news. the interviewer asked him
'Do you feel you have any personal responsibility to the people who bought tickets for your flights this morning when you knew that you would not be providing those flights'
Laker replied, 'You cannot touch me, this is a Limited Liability company'
This topic can be discussed for a long time, but without knowledge of the company's microenvironment, it is difficult to form a clear point of view. Sometimes, directors participate in the company's activities very actively and determine the course of development. There are cases when the powers of the director or manager are limited.
It is important to maintain a balance between financial objectives and success so as not to go over the side of scammers. This requires strict and responsible leaders who will clearly define the company's goals.
It is easy to condemn a person's choice, but it is harder to make the right choice yourself.