Flyglobespan into administration

[VOM1T]

Points well made, Skyman and here is a well written article which contributes to your argument ,

Travel-payment woes: E-Clear as mud | The Economist

but if it is an un-disclosed clearing bank that is holding the money, rather than the technical front-man e-clear, I think that the situation is even more complicated than currently being presented.

Is perhaps Mr Elias between a rock (spelt PwC) and a hard place ?

[skyman771]

Thanks VOM1T, very interesting article which upon reading, then one can not fail to have grave concerns insofar as to the recoverability of £35M. In simply extracting info such as

So the unprofitable bank is not much use to E-Clear; last year it even had to increase the bank’s capital, putting in €3m (£2.7m).

then such sums are unlikely to have come from company profits / accumulated reserves more likely "borrowed" from working capital & unlikely to be recoverable.
No doubt when eventually full information is obtained, then there may be many other such "appropriations"

[GS John]

And the wrigling continues:

http://edinburghnews.scotsman.com/br...r-a.5973893.jp

And a very frightning article in VOM1T's link

[El Grifo]

Heat is on

A High Court judge today ordered credit card payment processing company E-Clear to produce evidence that it has up to £35 million that administrators say is owed to failed airline Globespan.

Mr Justice Floyd rejected an application from PricewaterhouseCoopers to wind up E-Clear today, adjourning the hearing until next Tuesday.

But he ordered that E-Clear produce bank statements detailing the extent of funds it holds that were due to Globespan or its customers by noon on Friday.

He also accepted an undertaking offered by the counsel for E-Clear that the company would not pay any money out of its accounts in the meantime.

In making the adjournment and order, Mr Justice Floyd said it was possible that the application for an adjournment “is an attempt to put off the evil day”.

Courtesy TTG

[mary_hinge]

No comment from E-Clear as £35m deadline passes

There has been no official confirmation as to whether E-Clear met its noon deadline on Friday to prove it has the £35 million owed to Globespan, but new administrators are understood to have been lined up.

The credit-card processing firm will face a winding up order in the High Court on Tuesday after PricewaterhouseCoopers (PwC), the administrator for Globespan, claimed it had been unable to verify if E-Clear still had £35 million it owed the Scottish operator.

No comment from E-Clear as £35m deadline passes

[san diego]

The only reason any company, travel or otherwise, deals with a business such as this is because no reputable bank is prepared to process credit cards for them. E Clear allegedly not only kept hold of the money for a long time but charged many times more in processing fees than any mainstream bank. It appears they were acting as lenders of last resort, when your credit is poor, you pay a heck of a lot more interest to the doorstep lender, even the legitimate ones, than if you go down to your local High Street branch of HSBC. Once you are caught in the spiral it seems very, very difficult to get out of it and any other business that has been relying on E Clear must now be in grave danger of going the same way

[flybar]

Mr E-Clear made it plain in his interview (reported at #331) that his company only dealt with companies that could be classed as 'struggling'

The entrepreneur last night stressed that his firm specialised in handling the payments of struggling companies and it should therefore be no surprise that some of them went out of business.

Strikes me that Globespan senior management hoodwinked everybody!!

[VOM1T]

Oh dear..

"E-Clear enters administration
Tuesday, January 19, 2010
Chris Gray

Controversial credit card payment company E-Clear was today placed in administration by order of a high court judge.

Mr Justice Vos made the order after hearing that there was no more than €10 million in E-Clear’s bank accounts according to evidence submitted by its director Elias Elia yesterday.

The court was told that E-Clear owes collapsed airline and operator group Globespan a minimum of £22.5 million and there was little prospect of E-Clear being able to pay its debt.

Mr Vos appointed BDO as administrator"

Oh Dear, if you add the missing Globespan money to the missing SkyEurope funds then I hope that Mr Vos has a lot of noughts on his calculator,,,,,,,,,

[GS John]

E-Clear wound up in High Court

Bye bye any money that the employees were owed I'd guess

[WHBM]

Lender of last resort or not, this has to be one which needs to be looked at by the police now.

I wonder who E-Clear's auditors were ? Questions for them as well. And Visa/Mastercard, who use Credit Card Processors to facilitate their own business, can answer a few questions as well.

[BarbiesBoyfriend]

Time for Mr Elia to go get a stripey suntan..

Want to play 'mummies and daddies?'

[Cluster Bomb]

Kiss this.

If Kiss Flights are to replace Flyglobespan. I would have thought they would set up a base in EDI or does Viking Airlines already have a base at GLA?

[groundbum]

visa/mastercard need to answer questions

since e-clear's sole role is to accept credit card payments, then VISA and MASTERCARD international must exercise, or be made to exercise a huge amount of oversight of these companies if the whole system isn't to be thrown into chaos. It's very very hard to get a normal merchant account, so to be a third party handing and retaining large sums should be subject to even higher scrutiny.

It's fair enough for the third-party processor to hang onto sums for possible refunds for faulty/non-delivered goods, but there should be fairly clear timetables for releasing the money once the goods are delivered, and also I would have thought all sums should be held in trust accounts, and not just mingled in general company funds. Solicitors and so forth have to have separate client accounts, so why not third party credit card companies?

G

[GS John]

Kiss this. Why isn't this another thread?

[G-AWZK]

Whispers have it that there are connections between Kiss management, former XL and Zoom management. Somewhere in the mix a certain Cypriot company has a finger in the pie too. Is it relevant? Who knows?

If I have understood the situation correctly, Viking (another company with management links to other collapsed airlines) are operating the flights on their AOC and Kiss are nothing more than a ticket seller, for the two months that the services will operate.

[leisurelad]

Viking have been going for many years now and with the major fleet renewal i can only imagine that financially they are healthy.

The connections between management and xl etc are no secret to the industry.

Viking also have a seperate operation called Viking Hellas which is the greek operation based out of Athens and Heraklion i believe. Viking have had a base out of HER since pretty much the beginning.

Kiss Flights, are basically the new Freedom Flights which went down when xl went but they are now in their second year of operation and personally, never had a problem with them, infact, i wish more companies were as nice and accommodating as they are.

So far, so good and i see no reason why Viking / Kiss can't be sucessful here in the UK. They have major contracts with numerous tour operators.

[spinnaker]

Ultimately this has served no purpose for pwc. ie they got no money out of the exercise. I think it was pretty obvious that eclear had no funds. It also comes as no surprise that globespan were using eclear, they had to. Globespan debt was uninsurable for some time before their collapse. It's a red herring to blame ecear were responsible for the airlines collapse, it was in a shocking state anyway. BTW I don't want to give the impression that I am sticking up for eclear I'm not.

[skyman771]

spinnaker

Ultimately this has served no purpose for pwc. ie they got no money out of the exercise.

Errr I doubt this ! I don't have in depth knowledge of this specific appointment but Ido understand as to how the professions work & PWC would have received an instruction from whoever appointed them i.e. in this case the instruction came from GSM's bank and would encompass a very nice remuneration structure. The bottom line being that the bank would underwrite such fees incurred. As ever directly or indirectly it is ALWAYS the creditors who pay!

[4567]

It would appear that all this stuff with E-CLEAR has allowed Tom Dalrymyple to go into the shadows it would be nice to hear him in an interview about his company and where it he thought it all went wrong, Should be good. No doubt though he fd off to some retreat for a while to lay low.
Anyone know where he is?

[inspecther gadget]

Anyone know where he is?

Have you tried his Yacht in Nice?