Originally Posted by
Sunfish
Mick, what is your background?
Contract law, supply chain management, program/project management and now in retirement, training for a not-for-profit.
Originally Posted by
Sunfish
To put that another way, Deloitte made a breathtaking irrevocable decision once it decided to burn through the provisions for employee entitlements.
That had already been done before Vaughan Strawbridge set foot in the door. Management had already ran the business's cash position down below the employee entitlement threshold before they called in the administrators. The reason that the cash that the business had left had been frozen was almost invariably because of financial covenants in their secured financing. Scurrah, Bryan and Co had already taken the business into insolvency before Deloitte was called in.
And let's be clear on the fact that employee entitlements are not 'provisioned'; they need to be 'accounted' for at the value that would accrue to the business in the event of a winding up but they do not have to be provisioned (as in, monies set aside for a specific purpose).
Originally Posted by
Sunfish
What Deloitte may have done is loosely the equivalent to the crooked bank manager who has stolen a million from his employer and lost it gambling. He steals another million, bets double or nothing, and wins. He puts the money back. Has a crime still been committed if he is discovered?
Not even vaguely close to loosely the equivalent, that's just hyperbolic nonsense. Stealing is a crime, nothing in Deloitte's administration was criminal.
And let's just draw a line under this 'it was the employees' money' nonsense. It wasn't. To the extent that the business's remaining cash was anyone's it was the secured creditors. The employees' claim on the business's money is always subordinated to the secured creditors.
You can cue the opening track off Pet Sounds and go through all the rainbow and unicorns hypotheticals until the cows come home but it does not change the fact that the best outcome for employees, both in aggregate and individually, was for the business to be sustained as a going concern and sold. The fact that the administrator needed to borrow money to pay the first fortnight's wages after they took over tells you all you need to know about the position the business was in when they took it over.