Defence support contractor Carillion fighting to stay afloat
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The bank said that all invoices presented for payment up to Carillion’s collapse on Monday have been paid.
Carillion’s creditors, including thousands of subcontractors, also face receiving less than 1p of every pound they are owed, according to court documents.
UHY Hacker Young partner Peter Kubik said: “The secured creditors, which are mostly banks, are owed roughly £900m and will get first bite of the company’s remaining assets as it gets liquidated.
“A prescribed £600,000 will be spread extremely thinly amongst trade creditors who are owed more than £100m in total.
“We are already in conversation with several creditors who are owed in excess of £1m each and suggest anyone in a similar position seeks professional advice.”
Carillion’s creditors, including thousands of subcontractors, also face receiving less than 1p of every pound they are owed, according to court documents.
UHY Hacker Young partner Peter Kubik said: “The secured creditors, which are mostly banks, are owed roughly £900m and will get first bite of the company’s remaining assets as it gets liquidated.
“A prescribed £600,000 will be spread extremely thinly amongst trade creditors who are owed more than £100m in total.
“We are already in conversation with several creditors who are owed in excess of £1m each and suggest anyone in a similar position seeks professional advice.”
That situation probably came about due to this
https://www.constructionnews.co.uk/m...027117.article
In a letter obtained by CN, Carillion Rail’s supply chain manager James Charlesworth told suppliers that outstanding bills for any goods or services provided before its liquidation on Monday would not be paid
Carillion is currently Network Rail’s second biggest supplier and is currently delivering a number of key electrification projects on the Midland Main Line, the North-west hub and the Shotts line between Glasgow and Edinburgh.
A number of Carillion’s key suppliers will be exposed to the unpaid work and are likely to be hit for millions of pounds in outstanding payments.
The unpaid work would likely cover the Christmas period, a time when a large proportion of Network Rail work is carried out.
Earlier this week Network Rail had said: “Carillion’s work would continue for the time being as Network Rail works with the official receiver and special manager to ensure the continuity of its project work.”
A number of Carillion’s key suppliers will be exposed to the unpaid work and are likely to be hit for millions of pounds in outstanding payments.
The unpaid work would likely cover the Christmas period, a time when a large proportion of Network Rail work is carried out.
Earlier this week Network Rail had said: “Carillion’s work would continue for the time being as Network Rail works with the official receiver and special manager to ensure the continuity of its project work.”
Failure to pay reminds me of this old joke:
A boy was at a mental arithmetic class. The teacher put the following question to him:
"Your father owes someone £10000 and agrees to pay it back every month in equal instalments for a period of 10 months. After 4 months, how much does he still owe?"
"£10000, sir"
"Rubbish, boy - you don't know your maths. What's your name?
"Maxwell, sir - and you obviously don't know my father Robert!"
A boy was at a mental arithmetic class. The teacher put the following question to him:
"Your father owes someone £10000 and agrees to pay it back every month in equal instalments for a period of 10 months. After 4 months, how much does he still owe?"
"£10000, sir"
"Rubbish, boy - you don't know your maths. What's your name?
"Maxwell, sir - and you obviously don't know my father Robert!"
Last edited by BEagle; 17th Jan 2018 at 16:01. Reason: Wrong first name - thanks, Treaders!!
As I understand it the current CEO was brought in last year to try to turn things around after the company got into difficulties during the time under his predecessor. Simplistic jeering about "upcocking" may not be appropriate, but it does play to the crowd.
Throw in a few knob gags while you're at it and you'll get yourself an audience.
It will be an ignorant, brainless audience, but still an audience...
PDR
Throw in a few knob gags while you're at it and you'll get yourself an audience.
It will be an ignorant, brainless audience, but still an audience...
PDR
Gnome de PPRuNe
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"Maxwell, sir - and you obviously don't know my father Rupert!"
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Perhaps there is a case here for someone to jump off a sinking ship.... or a luxury yacht if you prefer.
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Robert, not Rupert as you pointed out, Treaders!
Hypothetical question. Let's imagine that an aspect of RAF pilot training had been contracted out to an organisation, call it 'Airflite Training'. Airflite have been awarded a contract to start this training with everything in place for the first students on 1 Jan 2018. But they haven't been able to meet the contracted date, so MoD has had to find a short term alternative in order to train their pilots.
Let's now imagine that various training providers have responded and a contract has been agreed with one of them.
Bearing in mind the Government's refusal of a state bail-out for Carillion, who now pays for Airflite's failure? Their shareholders - or the tax payer?
Surely it should be the former?
All hypothetical, of course.......
Hypothetical question. Let's imagine that an aspect of RAF pilot training had been contracted out to an organisation, call it 'Airflite Training'. Airflite have been awarded a contract to start this training with everything in place for the first students on 1 Jan 2018. But they haven't been able to meet the contracted date, so MoD has had to find a short term alternative in order to train their pilots.
Let's now imagine that various training providers have responded and a contract has been agreed with one of them.
Bearing in mind the Government's refusal of a state bail-out for Carillion, who now pays for Airflite's failure? Their shareholders - or the tax payer?
Surely it should be the former?
All hypothetical, of course.......
Last edited by BEagle; 17th Jan 2018 at 18:13.
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The answer to the question you posed BEagle is that all depends on the terms of the contract.
1. Does the contract stipulate time is of the essence?
2. Are there contractual penalty clauses for non performance?
3. Does the contract provide that in the event of non performance for any reason HMG is entitled to treat it as a breach enabling it to end the contractual arrangements?
My guess would be that if it is just a short-term delay, in the absence of express terms & conditions enabling it to do so, HMG would not be able to employ alternative contractors and recover the costs from Airfllite.
1. Does the contract stipulate time is of the essence?
2. Are there contractual penalty clauses for non performance?
3. Does the contract provide that in the event of non performance for any reason HMG is entitled to treat it as a breach enabling it to end the contractual arrangements?
My guess would be that if it is just a short-term delay, in the absence of express terms & conditions enabling it to do so, HMG would not be able to employ alternative contractors and recover the costs from Airfllite.
Are there contractual penalty clauses for non performance?
Does the contract provide that in the event of non performance for any reason HMG is entitled to treat it as a breach enabling it to end the contractual arrangements?
Does the contract provide that in the event of non performance for any reason HMG is entitled to treat it as a breach enabling it to end the contractual arrangements?
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Setting this aside, there are two sure-fire ways to a successfully and timely contract being awarded. One, get the company to draft it. Most delays are caused by Commercial faffing around for months over terms and conditions, trying to get the company to accept unsuitable ones. It ain't a contract until MoD agrees it is, so there can never be any harm caused. Two, the technical project manager negotiates and agrees the contract, as used to be the case with anything airworthiness or repair related. Commercial don't like this as they are taught, wrongly, only they can sign a contract.
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You can write the strongest most bulletproof contract in the world, but if you sign it with a company that is rapidly going down the tubes and goes bust with debts of £1 billion, you might as well have written it in sand for all the good it will do you.
...
...
Last edited by NutLoose; 17th Jan 2018 at 23:28.
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Re#88 point 2.
I note from BBC News last night about the Liverpool hospital they were having to pay. £1.5m every month late. So far a year behind. No one is going to recover the penalty now!
Also wondering who will pay to complete the building. Not too much of a worry unless Carillion have been paid in advance.
I don’t fancy the job of having to unravel the mess and refinance any deals.
When companies get taken over (prior to any collapse) the new company should accept the liabilities as well. I know of cases in Defence where this never happened and we paid twice. I was always uncomfortable signing the 640s and would raise a note for my boss to sign to cover my arse.
I note from BBC News last night about the Liverpool hospital they were having to pay. £1.5m every month late. So far a year behind. No one is going to recover the penalty now!
Also wondering who will pay to complete the building. Not too much of a worry unless Carillion have been paid in advance.
I don’t fancy the job of having to unravel the mess and refinance any deals.
When companies get taken over (prior to any collapse) the new company should accept the liabilities as well. I know of cases in Defence where this never happened and we paid twice. I was always uncomfortable signing the 640s and would raise a note for my boss to sign to cover my arse.
Just read that there may be some justice in the Carillion debacle, apparently in the event of the company going bust the men in big suites have a contract clause which means they have to give any dubious money back.............!
"Carillion introduced the “clawback” provision as part of its pay policy in 2014 that would allow the company to demand executives return cash and share bonuses for up to two years after payment – a move it said brought the business in line with the updated UK Corporate Governance Code"
OH NO! .........You are not going to believe this but reading the article further, by an amazing coincidence the carillion remuneration board subsequently changed the rules on this so that "wrongdoing" has to be proved before ill gotten gains have to be returned! Who would have believed it?
Still its good news for manufacturers of Pig Troughs, Snoughts for the use of!
"Carillion introduced the “clawback” provision as part of its pay policy in 2014 that would allow the company to demand executives return cash and share bonuses for up to two years after payment – a move it said brought the business in line with the updated UK Corporate Governance Code"
OH NO! .........You are not going to believe this but reading the article further, by an amazing coincidence the carillion remuneration board subsequently changed the rules on this so that "wrongdoing" has to be proved before ill gotten gains have to be returned! Who would have believed it?
Still its good news for manufacturers of Pig Troughs, Snoughts for the use of!
Still its good news for manufacturers of Pig Troughs, Snoughts for the use of!
Thread Starter
Seems Capita is also struggling. Not to the same extent as Carillion given its cash reserves, but it does beg questions about the principle of the private sector being better placed to provide public services.
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I seem to recall that M.P.B.W. weren't held in the highest esteem, though 
I don't own this space under my name. I should have leased it while I still could
Having written a contract with measurable outputs and performance criteria, commercial thought it overly complicated and relaxed the requirements and removed the measurable criteria. Were they being realistic knowing penalties would not be paid or as an effort to reduce bid prices?
MPN11, I don't think that the Ministry of Public Blunders and Wonders went bankrupt though?
Biggest expense was probably repainting the logos on all their vehicles every time they changed their title....Ministry of Works...MPBW...Department of the Environment......Doomwatch??
Biggest expense was probably repainting the logos on all their vehicles every time they changed their title....Ministry of Works...MPBW...Department of the Environment......Doomwatch??
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OH NO! .........You are not going to believe this but reading the article further, by an amazing coincidence the carillion remuneration board subsequently changed the rules on this so that "wrongdoing" has to be proved before ill gotten gains have to be returned! Who would have believed it?
Still its good news for manufacturers of Pig Troughs, Snoughts for the use of!
Still its good news for manufacturers of Pig Troughs, Snoughts for the use of!