Results 1 to 5 of 5

Thread: Rogue Comapny Directors

  1. #1
    Senior Member
    Join Date
    Feb 2017
    Posts
    322
    Thanks
    107
    Thanked 402 Times in 199 Posts
    Rep Power
    4

    Default Rogue Comapny Directors

    Deleted
    Last edited by Fermata; April 17th, 2020 at 07:12 AM. Reason: Deleted because a twat apparently knows more than I do

  2. #2
    Senior Member
    Join Date
    Dec 2018
    Posts
    137
    Thanks
    27
    Thanked 49 Times in 33 Posts
    Rep Power
    2

    Default Re: Rogue Comapny Directors

    Quote Originally Posted by Fermata View Post
    Where the Law has failed the population is allowing a director of a failed company to simply and immediately restart without any requirement of clearing the money owing to the creditors.
    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.

    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.

    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
    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:

    https://en.wikipedia.org/wiki/Freddi...nd_of_Skytrain
    Last edited by ilikenails; April 16th, 2020 at 05:39 AM.

  3. #3
    Senior Member
    Join Date
    Dec 2018
    Posts
    137
    Thanks
    27
    Thanked 49 Times in 33 Posts
    Rep Power
    2

    Default Re: Rogue Comapny Directors

    Quote Originally Posted by Fermata View Post
    The current law on wrongful trading states that if you as a company director know, or ought to know, that your company is trading wrongfully and there is little prospect of being able to trade out of that situation then you must cease trading immediately. Freddie Laker knew that Skytrain was to be shut down at noon but he was still selling tickets at 11.00 knowing that he would not be able to deliver those flights. He was correct in saying 'you cannot touch me, I am a Limited Company', the Law was changed to ensure that Directors of companys have a PERSONAL liability arising out of the work that they do.
    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.Eg

    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.)

  4. #4
    Senior Member
    Join Date
    Feb 2017
    Posts
    322
    Thanks
    107
    Thanked 402 Times in 199 Posts
    Rep Power
    4

    Default Re: Rogue Comapny Directors

    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.

  5. #5
    Member
    Join Date
    Apr 2020
    Posts
    38
    Thanks
    13
    Thanked 26 Times in 16 Posts
    Rep Power
    0

    Default Re: Rogue Comapny Directors

    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'

  6. The Following User Says Thank You to Johnny_S For This Useful Post:

    Fermata (April 25th, 2020)

Tags for this Thread

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •