Administrators and bankers face losses over Time collapse
HSBC, the main banker for failed UK PC supplier Granville Technology, could face problems trying to recover its debts, which are estimated by unofficial sources at £19m. The overall debt of the company has been estimated at £50m.
But a legal opinion suggests that the creditors, including thousands of Time and Tiny customers who have paid money for computers they are unlikely to see, may not be the only losers. A controversial but established legal option suggests that ex-employees of the company may be able to claim money directly out of the fees due to the administrators, Grant Thornton.
The £19m figure was reported by The Independent on Sunday. The joint administrator of Granville, Martin Ellis from Grant Thornton UK LLP, would not confirm the figure but did say that "there's no real prospect (of a return) for unsecured creditors", and that the debts to unsecured trade creditors are likely to total around £20m.
There are multiple problems for creditors apart from the lack of cash. Last week, Grant Thornton complained that it was proving very difficult to track Granville Technology's assets.
Even the ownership of the Time and Tiny brands is under question.
While the outlook for creditors and ex-customers remains very bleak, the outlook for the ex-staff of the company is more complex. According to an opinion published in The Lawyer, case law payments, such as those paid in lieu of notice "takes priority over the administrators' fees and administration costs".
According to the ruling, "an industrial tribunal can force an employer to pay a protective award if the employer fails to consult with staff representatives to consider matters", such as trying to minimise the redundancies and mitigating the consequences.
"If a company proposes to sack 100 or more employees the period is 90 days. If an award is then made, an employer will be required to pay staff remuneration from the date of the dismissal up to a maximum of 90 days."
The staff at Granville Technology repeatedly complained that they were not consulted through the period leading to the layoffs in July.
Grant Thornton had not responded to requests for comment at the time of writing.