Monarch 4
Join Date: Jan 2005
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Monarch seems to have pulled the plug at the beginning of a month, which is a bit unusual - normally it is just before monthly payroll at the end of a month, so you are instantly a month's pay down (in my case payroll on 30th, messaged 10pm on 28th to be in the office first thing on 29th to be given marching orders and a box to clear your desk into). Not sure when Monarch's payroll was, but staff may have been slightly lucky on that.
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I think we'll find out when the fog clears that everyone is being airlifted home and the relevant charges will be reclaimed from those wriggly squirmy insurance and card companies as appropriate. I'd rather that than Mr &Mrs X from Huddersfield being tasked with sorting themselves out. For once the CAA has 'exceeded expectations' unlike their Irish cousins who appear to have sat mute on their thumbs throughout the Ryanair carnage. Would be good if they sorted everyone's compensation and then sent MOL one big bill payable in full before his next renewal!
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https://www.companyrescue.co.uk/guid...ation-3731/Who gets paid when a company goes bust: creditors' rights explained
When dealing with creditors in insolvency situations, it is vital to remember the order of priority. The simplest way to answer these questions is to imagine creditor ranking as a ladder.
Secured creditors:
At the top are secured creditors. Secured creditors have a legal right or charge over property. Now, property can mean anything from bricks and mortar to plant and equipment, motor vehicles, fixtures and fittings, particular pieces of machinery or things such as patents or intellectual property.
Fixed and floating charges:
Usually the fixed and floating charge is given under a debenture and this must be considered carefully. Before any signature or completion it is essential to take expert and independent legal advice before signing. However, we would assume that if the reader is looking at this page that a debenture already exists.
Fixed charge creditors:
The easiest way to understand a fixed charge creditor's rights is to think of their position as holding title to or ownership of the property in question. Whilst this isn't strictly legally correct, it is a simple way to understand their position. This means that the person (company) who has given the fixed charge to a bank or other lender (there must be a consideration for fixed and floating charges) has relinquished permission to trade or sell the property in question, without the explicit permission of the charge holders. Usually a fixed charge exists over, for example, a piece of machinery. Because this machinery is used to develop the economic activity of the business in question, it is unusual or abnormal for the business to want to sell or trade this piece of equipment. If the machinery in question was redundant or no longer sufficiently efficient, then the company may seek to sell this equipment (but would have to seek permission from the fixed charge holder first). Usually, this is not withheld as the proceeds for the sale would probably be used to pay down borrowings.
Floating charge creditors:
An altogether more complicated situation exists under the floating charge. Essentially all items that the company uses, or sells or trades in the normal course of business where it isn't possible to refer to a fixed charge holder for permission are covered by floating charges. This can be complicated to apply, for example a fixed charge may exist on a piece of machinery which is sold in liquidation the proceeds of which would go to the fixed charge holder. If the machinery was sold for say £10,000 more than the fixed charge, then this amount is covered under the floating charge collection. Under any floating charge created before 15th September 2003, any floating charge collections are payable to preferential creditors first. Under any new floating charges created from September 15th 2003, all collections are first subject to a prescribed PART which must be set aside for the unsecured creditors. This is calculated as follows 50% of first realisation up to £10k and 20% of £10k to £600k is paid to unsecured creditors with the balance going to the floating charge.
This is a very complex area and advice should be taken a soon as possible if you do not understand the position.
Preferential Creditors:
From 15th September 2003 the Inland Revenue and VAT's preferential status was abolished under the Enterprise Act 2002. This will lead to a lower dividend than the Crown creditors use to enjoy BUT a higher dividend in insolvency should be received by trade creditors (for example) than previously. Employees retain the status of preferential creditors for their Arrears of Pay and for Holiday Pay claims in insolvency situations.
Unsecured creditors:
Unsecured creditors now include HMRC for deductions for employees through a PAYE Scheme and for VAT, trade creditors, suppliers, unsecured portion of fixed charge debts, national non-domestic rates and some employees' claims for example.
Connected unsecured creditors:
Usually this is where a director or employee has provided money to the company on an unsecured basis, non-payment of expenses can fall into this area. The technical term is "associate creditors" this means that the creditor is in some way associated with the company. Associate or connected creditors can include family members of staff or director's spouses etc. Connected creditors will not generally receive a dividend in a CVA but would be eligible for a dividend in liquidation. Usually, however, the dividend for unsecured / connected creditors is nil in liquidation.
This is a complex area and advice should be taken a soon as possible if you do not understand the position.
Shareholders
Unfortunately, at the bottom of the pile comes members. otherwise known as shareholders. Shareholders are people (or companies) who have provided the money to the business on a risk basis and are therefore not entitled to remuneration, dividend or repayment of their exposure until all of the above creditors are satisfied. Hence the name risk capital! Shareholders are at the biggest risk of losing their money.There are, of course, many different classes of shareholders and there are many complex issues appertaining equity - it is not the purpose of this guide to go into these areas but should the reader require advice they are encouraged to discuss this matter with their professional advisors It is quite common for shareholders to covert some of the equity into secured debt to ensure that they are paid in the event of collapse.
Above all remember this key point. If the company is insolvent then the directors have a duty of care to act to maximise the body of creditor's interests. This means acting in the best interests of all creditors, by assessing the situation, collating as much information as possible, looking at their objectives, studying the options available and making a decision to ACT. The message is clear: if the business is insolvent think very carefully about payment to creditors.
When dealing with creditors in insolvency situations, it is vital to remember the order of priority. The simplest way to answer these questions is to imagine creditor ranking as a ladder.
Secured creditors:
At the top are secured creditors. Secured creditors have a legal right or charge over property. Now, property can mean anything from bricks and mortar to plant and equipment, motor vehicles, fixtures and fittings, particular pieces of machinery or things such as patents or intellectual property.
Fixed and floating charges:
Usually the fixed and floating charge is given under a debenture and this must be considered carefully. Before any signature or completion it is essential to take expert and independent legal advice before signing. However, we would assume that if the reader is looking at this page that a debenture already exists.
Fixed charge creditors:
The easiest way to understand a fixed charge creditor's rights is to think of their position as holding title to or ownership of the property in question. Whilst this isn't strictly legally correct, it is a simple way to understand their position. This means that the person (company) who has given the fixed charge to a bank or other lender (there must be a consideration for fixed and floating charges) has relinquished permission to trade or sell the property in question, without the explicit permission of the charge holders. Usually a fixed charge exists over, for example, a piece of machinery. Because this machinery is used to develop the economic activity of the business in question, it is unusual or abnormal for the business to want to sell or trade this piece of equipment. If the machinery in question was redundant or no longer sufficiently efficient, then the company may seek to sell this equipment (but would have to seek permission from the fixed charge holder first). Usually, this is not withheld as the proceeds for the sale would probably be used to pay down borrowings.
Floating charge creditors:
An altogether more complicated situation exists under the floating charge. Essentially all items that the company uses, or sells or trades in the normal course of business where it isn't possible to refer to a fixed charge holder for permission are covered by floating charges. This can be complicated to apply, for example a fixed charge may exist on a piece of machinery which is sold in liquidation the proceeds of which would go to the fixed charge holder. If the machinery was sold for say £10,000 more than the fixed charge, then this amount is covered under the floating charge collection. Under any floating charge created before 15th September 2003, any floating charge collections are payable to preferential creditors first. Under any new floating charges created from September 15th 2003, all collections are first subject to a prescribed PART which must be set aside for the unsecured creditors. This is calculated as follows 50% of first realisation up to £10k and 20% of £10k to £600k is paid to unsecured creditors with the balance going to the floating charge.
This is a very complex area and advice should be taken a soon as possible if you do not understand the position.
Preferential Creditors:
From 15th September 2003 the Inland Revenue and VAT's preferential status was abolished under the Enterprise Act 2002. This will lead to a lower dividend than the Crown creditors use to enjoy BUT a higher dividend in insolvency should be received by trade creditors (for example) than previously. Employees retain the status of preferential creditors for their Arrears of Pay and for Holiday Pay claims in insolvency situations.
Unsecured creditors:
Unsecured creditors now include HMRC for deductions for employees through a PAYE Scheme and for VAT, trade creditors, suppliers, unsecured portion of fixed charge debts, national non-domestic rates and some employees' claims for example.
Connected unsecured creditors:
Usually this is where a director or employee has provided money to the company on an unsecured basis, non-payment of expenses can fall into this area. The technical term is "associate creditors" this means that the creditor is in some way associated with the company. Associate or connected creditors can include family members of staff or director's spouses etc. Connected creditors will not generally receive a dividend in a CVA but would be eligible for a dividend in liquidation. Usually, however, the dividend for unsecured / connected creditors is nil in liquidation.
This is a complex area and advice should be taken a soon as possible if you do not understand the position.
Shareholders
Unfortunately, at the bottom of the pile comes members. otherwise known as shareholders. Shareholders are people (or companies) who have provided the money to the business on a risk basis and are therefore not entitled to remuneration, dividend or repayment of their exposure until all of the above creditors are satisfied. Hence the name risk capital! Shareholders are at the biggest risk of losing their money.There are, of course, many different classes of shareholders and there are many complex issues appertaining equity - it is not the purpose of this guide to go into these areas but should the reader require advice they are encouraged to discuss this matter with their professional advisors It is quite common for shareholders to covert some of the equity into secured debt to ensure that they are paid in the event of collapse.
Above all remember this key point. If the company is insolvent then the directors have a duty of care to act to maximise the body of creditor's interests. This means acting in the best interests of all creditors, by assessing the situation, collating as much information as possible, looking at their objectives, studying the options available and making a decision to ACT. The message is clear: if the business is insolvent think very carefully about payment to creditors.
Rog I think you forgot HMRC come at the very top or near the top. Also the employees were not given the statutory 45 day redundancy notices which they are entitled to which the UNITE union are taking up with KPMG. In my experience of being made redundant staff wages come before most other creditors i.e. fuel, handling companies etc. It could turn out to be rather messy I am afraid.
my list was not exactly the order of preference but thank you for the heads up
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of course staff get all pay whats owing and also their holiday pay due - sadly no redundancy though
this can be a long process but staff will ultimately get what is owing
as to pax ''getting a lift home'' that is why we have the CAA and funds and bonds lodged by tour operators and airlines to have rainy day money just for this type of event
this was set up in 1974 after the huge Court Line and Clarksons/Horizon collapse
this can be a long process but staff will ultimately get what is owing
as to pax ''getting a lift home'' that is why we have the CAA and funds and bonds lodged by tour operators and airlines to have rainy day money just for this type of event
this was set up in 1974 after the huge Court Line and Clarksons/Horizon collapse
Doesn't the UK Government have a 'Fund ' for employee redundancies when there's nothing left in the pot ?
If it doesn't, then a disgrace.
It's only a similar 'Fund' which is paying the Air Berlin crews while an ' orderly close ' can be sorted out - for which, read until LH are ready to take over yet another European airline without so much as a murmer in Brussels.
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Lessor has paid the Aircraft debt to the Airport where the Aircraft ended up, hired a couple of contract pilots, paid cash for the fuel, filed a flight plan (probably using the Aircraft registration), then off you go.
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Rog747
Monarch crew please take this with a pinch of salt please. My experience of two Airlines going bust was different. I'm sure the Administrator will update you but you join other creditors and you might not be at the front of the queue.
of course staff get all pay whats owing and also their holiday pay due - sadly no redundancy though this can be a long process but staff will ultimately get what is owing
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As far as someone with a stable long term goal, that may be harder to find, as the diversity of MAEL's business with Line Stations in BHX, LGW, Nice, Malaga, Kiev, Warsaw, Man, EDI is a right mixture. So whilst the Hangar and stations in WAW/LGW/EDI are pretty much gold care centric, the others are a bit of a hotch botch in that they look after many varying customers.
It could spell the change of the MAEL network with the stations or bases being divided even more, merely by those that are gold care stations and those that aren't.
Failing that, the UK stations that came from Jersey stations could end up back in those colours. I still have my old uniform somewhere I think
Join Date: Oct 2005
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I think we'll find out when the fog clears that everyone is being airlifted home and the relevant charges will be reclaimed from those wriggly squirmy insurance and card companies as appropriate. I'd rather that than Mr &Mrs X from Huddersfield being tasked with sorting themselves out. For once the CAA has 'exceeded expectations' unlike their Irish cousins who appear to have sat mute on their thumbs throughout the Ryanair carnage. Would be good if they sorted everyone's compensation and then sent MOL one big bill payable in full before his next renewal!
Shameful and bizzare I.M.H.O.
Opinion of CAA duly reset.
Be lucky
David
Or is it perhaps the responsibility of their home equivalent to get them home? Serious lack of common sense and coordination if so either way
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Not all return trips originate in the UK. In particular Monarch were a major provider of scheduled air services to/from Gibraltar (which is after all a British Overseas Territory) and there will be many Gibraltarians who have had to make alternative arrangements for return flights.
Bizarrely, passengers with return flights to the UK originating in Gibraltar can use the replacement services for their outward flight at no additional cost (up to the cutoff date), but must make their own arrangements for the return journey home.
Bizarrely, passengers with return flights to the UK originating in Gibraltar can use the replacement services for their outward flight at no additional cost (up to the cutoff date), but must make their own arrangements for the return journey home.
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In Mon I Trust
For your information the line station in WAW has nothing to do with Boeing Global Services.
The contract is with LOT and was won by MAEL, in this case Boeing was the loser.
The contract is with LOT and was won by MAEL, in this case Boeing was the loser.
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Blair Nimmo of KPMG is a legendary character in the insolvency business. He will get the statutory redundancy compensation for staff from the National insurance Fund, along with outstanding wages to the extent that the company cannot pay. He always does. He is the "Red Adair" of bankruptcy firefighting. I have seen him do it.
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The weekly amount was capped at not-a-lot more than benefit level, and the period paid for was the legal minimum notice period which in my case was four weeks rather than the three months notice it said in my contract. So basically that came to the equivalent of four weeks' dole money, maybe around a tenth in total of the redundancy money owed.
Which did come in handy, because I lost a week's dole money ... because I signed on a day late ... because I'd spent the previous day at a job interview: apparently this is bad behaviour for which you're fined.
From the department for transport website
My interpretation of this is that it is taxpayers money being used, hence no johnny forriners being sent sausage side, and the money will come from the ATOL fund for those with a certifcate and the credit cards for everyone else.
Transport Secretary Chris Grayling commissioned the extraordinary operation to return passengers who would otherwise have been left stranded by a lack of capacity in the aviation market to deal with such a significant demand.
The response means the government has agreed that passengers will not be charged for repatriation flights. Work is underway to recoup costs from the ATOL scheme and card providers.
The response means the government has agreed that passengers will not be charged for repatriation flights. Work is underway to recoup costs from the ATOL scheme and card providers.