Further news on SFT

[Harvey SM]

Has anyone heard anything (positive) further with regards to SFT. I have just got back from a break abroad, and before I left, the last I heard was that they were likely to be brought out this Friday (23rd). Not once have I or my class been formally contactted by the school..... We only heard via friends in other classes. :mad:
I am still paying rent in Bournemouth (which coinsidently was used as a student/teachers base for a week after SFT collapse) and don't want to give up room, just incase somthing does happen.
If anyone has any contact e-mail/tel numbers, please pass them on.
much appreciated in advance.
;) null

[Midland Maniac]

I have also heard a rumour that SFT were to be bought out this week. The other offer apparently was turned down by the administrators because the were offering silly money!!!

I wouldn't get your hopes up though. Not wanting to sound pescemistic, but i doubt if you will get anything back from them. I have been taking legal advise and I don't have a leg to stand on! I am now working on the assumption that i can kiss goodbye to the £15k and try and get on with life and training. If any money does come back to me will be a bonus!!!

MM

[Harvey SM]

Midland Maniac....
Speaking as an ex ppsc student (fingers burned), taking legal advise will get you nowhere. If like me at PPSC, you are owed any monies, then you will be a creditor of the company, and probably an unsecured one.
Godd luck with what ever you achieve.
;-) ;)

[PingPong]

Although I know nothing about SFT in particular, I have been following the various threads with interest.

It may not be of any help, but there has been an assumption that when any company 'folds', that unsecured creditors have no recourse. This is not strictly true.

I noted from a previous post that the profits per the accounts in 2000 were 'Nil'.

In smaller companies, it is common, for tax reasons, for companies to vote any residual profits for a year as extra directors' remuneration. Directors remuneration is a charge against profit (ie deducted in arriving at the bottom line), not an appropriation of it, such as payment of a dividend. A 'profitable' company can show a nil profit or even a loss.

Turning to the matter of incorporation (ie a limited company), the shareholders are protected from creditors - ie their liability is 'limited' to their shareholding - which is now worthless.

Now the interesting part. The directors are legally assumed to know the state of the company at any time - after all it is a legal requirement to keep records that show the state of the company at any time.

If transactions are entered into when the directors should have known that the company was insolvent, then the directors become personally liable. In legal speak it is known as "lifting the veil of incorporation".

The law was changed to specifically to cater for the situation where directors knowingly accept 'deposits' and treat them in the accounts as 'income', or enter into transactions, in the 'hope' that the company can continue trading, or for whatever reason. There have even been cases where companies have accepted deposits for work to be done etc, paid themselves excessive bonuses and remuneration, using the monies held, thus making the company show a loss(remember that directors' remuneration is a charge on profit and is deducted in arriving at the net profit or loss), file for insolvency and laugh all the way home in their Porsche!

As an aside, any sensible director, these days, carries specific insurance to cover the situation where a company engages in 'wrongdoing', of which he was unaware; and he finds himself personally liable due to the "lifting of the veil". Non-executive directors should always have such insurance if they value their house! (But even the MD would be well advised - the Financial Director may be up to no good, and vice versa!)

I am not suggesting, for a moment, that anything untoward happened at SFT, but please don't just look at 'profits' or 'losses' of a company; as a financial professional, the first page I would turn to, in a case like this, would be 'directors remuneration'!

Obviously, for any final period of trading, published accounts are not available. However, a statement of affairs should be sent out to all creditors. Make sure you study it carefully, get along to the creditors' meeting, and make sure you have all your questions ready!

[ 21 November 2001: Message edited by: PingPong ]

[rebeccadblake]

hiya peeps...

you didn't hear this from me but...

Being a nosey bar maid who has the recievers in to lunch every now and then.....with nothing to do but to listen to their conversations of who was going to be my future FTO....

They have had only 1 deffo bid for 700,000 from the guy who runs cabair, there are 3 others who may put a bid in, they haven't set a date, just really until they run outta time in 3 weeks when the courts given recievership ends.

1. is a Bournemouth based company.
2. is a rich fella from Glasgow who runs a distance learning comany ONLY who now wants a Ground school to add to his collection.
3. Cabair
4. Private company which they dont ever speak about.

SFT have asked for 1 millon, so far no one wants to pay this!!!!!!!!! SUPRISE!

[Captain Spud]

Ping Pong

Whilst not disputing your obvious knowledge of the subject I feel it more likely than not that you are building peoples hopes up only for them to be ultimatly disapointed.

When a company goes bust one of the official recievers duties is to file a report to the Department of Trade & Industy's "Enforcement Branch", on the behaviour of the company's directors prior to the receivership. I.e are there any grounds for action against them personaly for wrong-doings.

The truth is ;

a) The recievers will **** any residual company funds away and then when they are almost gone declare their work "complete".

b) The DTI "enforcement branch" must be the most impotent "enforcment" agency any where in the world, it's a joke . They need to see video evidence of the killer holding the smoking gun over the body with a dozen independat wittnesses to the deed before they will even consider action. How can you PROVE what the directors intentions where?

c)When a company goes into receivership AN UNSECURED CREDITOR WILL GET NOTHING repeat YOU WILL GET NOTHING.

This is a hard fact of life.

If there is any money left in the pot at the point of receivership it will be well gone before it gets anywhere near the unsecured creditors.

I have been on the wrong side of three company crashes involving a six figure total, and have got sod all out of any, in all cases the only people left with smiles on their faces where the recievers who of course ALWAYS pocket their (V Large) fees.

CS


:mad:

[QUERY]

Creditors, Spud is good honest stuff however unpalatable.
Re. rumour from the 'barmaid'- wouldn't anyone buying the assets of SFT be:
either stupid to start/re-start another flying school now
or just an asset-stripper?
BTW, what are SFT receivers actually selling?

[Harvey SM]

Well, whatever happens with SFT needs to happen fast.... Out of my class (only 9 of us) 7 have already contacted other training organisations and it is almost set in stone that they will not return to SFT......
Everyone I have spoken to is really pi**ed off that we were not contacted about the collapse, and that we only heard it via rumour control. All of us were seriously considering SFT to continue the remainder of the training (CPL/IR), and now they have definately lost a potential net of around £200,000!
What business sense is that? I think it's madness!
I have been in the aviation industry for over 6 years, and one fundamental rule I learnt right from the start is not to sh*t on your own doorstep - what comes around goes around, and this business is a pretty small world at times.
I am sure this is not the only potential business SFT has lost because of the way they have handled things.
Be Happy!! :p

[QNH 1013]

I can confirm the accuracy of Captain Spud's statements in paragraphs a) and c). Sorry folks, but that is what happens.

[Sensible]

Fraid so, unsecured creditors can expect to receive absolutely nothing!! Tthe truth is that SFT have run off with your money and any purchaser of the assets of SFT will not be responsible for the debts of SFT. The way that I read the accounts of SFT, any residue of cash after the fat cat receivers have finished go to SFT Europe Ltd, the ultimate holding company!!!!

Where is Send Clowns now???? Last heard of posting in Jet Blast!!

[Spit15]

Just my opinion but...


Rarely do I feel the need to air my opinion (and frankly that of a great many individuals...from SFT) in such a vociferous manner. I refer to the state of apparent total lack of regulation within the flight training industry with specific reference to the vulnerability of the student pilot (customer).

Yet another Flight Training Organisation (FTO) has closed due to financial troubles (SFT Aviation Limited). The students, who have paid vast sums of money (life savings, mortgages, loans etc), stand to lose everything. Notwithstanding their losses they also face the impossible task of having to find similarly sizeable funds to pay for the completion of their training with another FTO.

I personally have lost £3500 and unable to complete the final phase of training required to meet airline entry requirements, until I find some more funds.MCC

As a community we student pilots feel very bitter at the way the Professional Pilot Training Industry is regulated. How is a training provider allowed to continue operating when it is in serious financial trouble. Why should professional student pilots not be afforded the same benefits and privileges as those students training for other professional qualifications at colleges and universities? Namely the right to complete the training which they have already paid for.

The system of training pilots for a career in commercial aviation; which currently exists in this supposedly training friendly and pro-actively educationally progressive New Labour governed administration is diabolical. Not only do the vast majority of student pilots have to fund their own training costs (typically £40,000 - £50,000) but the training they receive is not eligible for tax relief. On top of that, there is absolutely no financial assistance afforded by the government for what is essentially a qualification of at least equal standing to a University Degree…WHY?

It seems that the government has chosen to regard the Professional Airline Transport Pilot qualification as something akin to an HGV licence. Surely the government should be encouraging people to take up flying as a professional vocation especially considering the predicted growth rate expected over the next 20 years.

A further hitch is that many professional training providers operate with very little margin, so if they don’t have the students coming through the system they face a very bleak short term future, and inevitable long term demise. "Administration" and "liquidation" are terms often heard in the pilot training industry, and spell nightmarish fears for those who are already ‘in the system’. Individuals who would stand to lose everything if their training provider went into receivership.

WHY are there no safeguards provided by the government for the training establishments and more importantly for the students who are literally risking everything to provide an industry with the required expertise.
WHY is it that someone can study/train to be a nurse, engineer, translator, accountant etc at university or college without the fear of losing £40,000 pounds due to a glitch in the economy.
Neither do they face the prospect of having to pay for another course should they be unfortunate enough not to have completed their training by the time the cash strapped training provider finally calls in the administrators.
Unlike those of us who train for a career as an Airline Transport Pilot.

Does the government consider the professional pilot training industry neither large nor important enough to regulate effectively.

WHY did the government decide to withdraw the NVQ/VTR scheme for the professional pilot qualification. Many student pilots took the opportunity to take advantage of the NVQ/VTR scheme while it still existed; however that now turns out to be to our peril and has resulted not in a saving but an additional expense.

To qualify for NVQ/VTR one had to have paid the total cost of the course fees up front by 31st August 2000 in order to benefit from the tax relief. Unfortunately a number of student pilots who "took advantage " of this are now facing enormous additional expense as their training providers have ceased trading and they are having to pay for training AGAIN elsewhere. Had NVQ/VTR not been abolished, many of these students would not be facing the problems of having to find new extra funds to complete the training which they had already paid for in full, as they would have been able to pay ‘piecemeal’ for the training as they received it, while still benefiting from the tax relief scheme.

Clearly something needs to be done in order to prevent other FTO’s succumbing to the same fate as SFT, and to safeguard the students investment in their training. I strongly believe the responsibility for formulating and implementing more effective regulation with specific reference to the points raised above lies squarely with the government.

What hope is there of achieving the predicted growth in the aviation industry if we can’t even manage the training organisations to provide the drivers for the planes.

I called Merridian Television in a bid to raise awareness of the situation in which many student pilots now find themselves; and the potential for many more to fall victim to similar circumstances in the future.

This issue needs to be fully addressed in the hope that the pilot training system be drastically reformed to prevent such catastrophic outcomes in the future.

This letter was sent to a MP, and numerous newspapers. Will post all correspondence here, as long as I don't infringe any rights.

[Groundloop]

Now, I think what I am going to say is going to be highly unpopular.

"I dont know how the directors/management etc of companies like SFT who took these peoples money knowing the ship was going down sleep at night."

This is how most businesses trading in a difficult market situation will act. You try to keep trading as long as possible hoping that the situation will improve quickly enough so that you will NOT go out of business. If you stop accepting new students you will go out of business sooner - people will still suffer except they will be a different group of people. Some students at SFT will have completed their courses because SFT managed to keep trading long enough by enroling new students, thus maintaining some sort of cashflow. Your money will have at least helped someone complete their course - which of course is of no help to you!

Quite simply it is a case of cashflow, cashflow and cashflow. If you are offering a service product which covers a long period of time (more than a year for an ATPL course) you have high fixed costs (aircraft leasing, maintenance, rent and rates, salaries, etc and comparatively low variable costs (fuel, landing charges, etc). If you suffer a period of low course intakes then you still have to meet all your fixed costs. Therefore the £50,000 you paid upfront for your course has already been spent before you have completed your course. It is money coming in from new students that pays for the end of your course. If all goes well the cycle continues without anyone getting hurt. However if the period of low course intakes is extended the cash coming in is now not high enough to cover the cash going out. However you keep going as long as possible in the hope that the situation will improve in time.

If cash was ringfenced (ie YOUR £50,000 was only used to pay for YOUR training and for nothing else) no company could operate under such restrictions in a period of low intakes. They have all their fixed costs to pay but they cannot pay them because they can only access, say, £2000 of your £50000 that month and, because they did not enrol many students on the last two courses, there are not enough £2000s to cover that month's costs. No business could operate like that.

Maybe the solution is to have the CAA introduce a bonding system similar to the system they imposed on ABTA in the 70's after the failure of Court Line. That is, FTO operators must either lodge money or a bank guarantee with the CAA sufficient to pay for the completion of training of exisisting students at other FTOs if they fail. However, putting so much money upfront may aggravate an already difficult financial situation and lead them to close down sooner!

It is a problem with no obvious solution.

[Ispy002]

Why would Cabair or any other school buy out SFT. Most of SFT's equipment including nice sim will be auctioned of to pay other creditors and you can guarentee other flight schools will be hovering like vultures for some cheap pickings. I have heard rumour in the halls of Cabair HQ of a SFT recovery course being offered as a once off, where you can complete your training at a price, but cheaper than restarting.
I'm sure most schools would be happy to relieve you of your money to assist you in continuing your training. Pay by credit card.

[rebeccadblake]

Right okay.... Just becuase I am a bar maid and ex stripper people seem to think I am stupid!, well..

If you love flying sooo much wouldn't you find a well paid job to suit?? I used to get around £300 a night! thats at least 2 lessons.

NO it wouldnt be stupid to re-start SFT at all, becuase....

1. It has a good name, and a good reputation.

2. It has the agreement for a school on the airfield - Normally each airfield will only allow so many schools on its site, for BIA its 3! so anyone wanting to start a school in Bournemouth would jump at the chance to buy SFT becuase it has owns of those rights.

3. It has students already.

[redsnail]

Cheshire Cat,
Methinks you protest too loudly. Reread Query's response. No one is calling you stupid. I am also believe he is talking about asset stripping.

[Midland Maniac]

ok Cheshire Cat....

Just to digress from the topic of SFT at the moment.......so you are an ex-stripper working as a barmaid in Bournemouth???? were you at SFT.....if so reveal your self (thats your name i mean!).

Sorry guys just had to ask.....

I think all this alcohol has gone to my head...turn to drink so I don't have to think about all of the money that SFT has taken away from me!!!!

[whinger]

Hi guys (and strippers - not the asset variety I hope).

Much as I hate to admit it, nice to see some reasonably positive (and dare i say it, well informed) opinions at last. Couldn't agree more with the comments regarding the legal standing of students and their dearly departed money. Its a shame that Phoney Tony and his cronies (especially that nice Mr Brown) don't get more involved with what is obviously a major problem, not just in the aviation industry but in general, and introduce proper, robust legislation that provides a greater level of protection to the 'ordinary' consumer. Losing money paid on leather suites (popular Watchdog topic) is one thing, but losing the 000's paid by students for ATPLs and the like is something of a magnitude worse.

Hope it all works out nicely in the end. After all, if all the schools go bust and everybody is out of work, what am I going to complain about?!?

DW

:mad: :mad: :mad:

[Megaton]

Midland Maniac

Off topic, I'm afraid but Cheshire Cat's profile appears very similar to Beckyxy who created a lasting impression in Jetblast. Come on Becky, put us out of misery!

[spitfire747]

SFT directors knew their company was going down, but they continued to receive and cash cheques, i have also heard they were not paying Ambassador in Florida before their collapse.

It stinks that directors can take peoples dreams away from them, plunge THEm into even more dept for the rest of their life, and walk away with no come back, perhaps they should auction off their huge houses, BMWs and £1000 suits, to help some of those recover their dreams

IN FUTURE ALWAYS ALWAYS INSIST YOU PAY AS YOU GO - ANY FTO WILL ACCEPT THIS UNLESS THEY ARE ON THE WAY OUT - SFT INSISTED IN PAYMENT UP FRONT....WONDER WHY !!!!

Sorry if this is a b*tch again, but it annoys me right the the point of....

[QUERY]

Some old points, genuine grievances and phoney postings but does anyone have any NEWS on (the remnants of) SFT?
People were posting from Bournemouth and putting out it was 'profitable', so is Send Clowns now working in a bar?

[Harvey SM]

I was told that Pilot Assist had put in a bid for SFT last week. Cannot guarantee that this is a correct statement, it's only another tale i've been told. :rolleyes: