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Are we heading out of the Recession?.


spuds
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We seem to be hearing all sorts of stories, mainly from political sources, about the Recession and what is being done.

But what are your views, because in my location, there seems to be a rather disturbing increase of company's closing down at very short notice, with the end results that not only the major company as failed, but so as the other people and smaller company's involved within the industry, possibly as sub-contractor's.

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Forum Editor

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Blackhat

My accountant is also an insolvency practioner, and he tells the same story as yours. He said that with his accountant's hat on he sees people in denial when it's clear to him that the time to call a halt is near - they try to plough on, careering along the edge of the cliff, even though they must know that it's pointless.

The thing is, when you have put years of blood sweat and tears into your own business it must break your heart to contemplate the end of it all.

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polish

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dont know if this a true reflection but one of my customers run a pallet yard and they are not busy these people are the start of the supply chain pretty much every thing travels on a pallet

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spuds

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Over the years I have attended many insolvency auctions, and in some cases it was perhaps possible to have saved the company, but the pressure from the bank or finance lender on getting their just returns were to great.

There even comments being made about the way things are happening at Comet, and how the equity company that owns (did own) that business is on the list for a major payment. Comet was apparently purchased for a nominal £2, with over £50million given as a buffer for future survival of that company. Yet questions are now being asked as to what as happened to that £50million, and why are the now ex-employees raising serious concerns.

There are also comments about how some insolvency company's are not trying their hardest to find potential buyers, because they want to wrap things up quickly, and move on to the next job, bringing in further fees and less effort for those insolvency company's.

Yes I agree that some company's deserve to fail, but does it effect the boss who is just another employee, but with better provisions that they have secured for themselves, than what the rest of the employees will receive?.

One auction I attended shown the workings of the management, when a brand new and expensive managing director's office suite went under the hammer, yet at the same time it was very obvious that the equipment in the factory was nearly beyond repair.

On a very personal note, I was involved with three insolvencies that I was owed money from. Only one of those company's and the owner of the company I felt truly sorry for, because it was very obvious he had tried nearly everything to repay his creditors at the expense of his own family and his health. The other solvencies, were a complete sham, and I and some of the lesser creditor's thought the director's deserved a prison sentence in and on the way they had conducted themselves. This also brought the point that after the major creditor's were paid, there was nothing left in the kitty for anyone else, which led to other one person business's failing as well. I have always stated and will remain to state, that the insolvency laws in this country want revising, because at present there are far to many abnormalities in the procedures.

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Forum Editor

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spuds

"...the insolvency laws in this country want revising, because at present there are far to many abnormalities in the procedures."

Such as what - can you detail these 'abnormalities'?

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spuds

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FE

It would take to long, but if you were to attend an insolvency meeting or have anything to do with such, as perhaps more so as someone with a small but substantial to you debt due, you will soon see what I mean.

I have attended such meetings and received information, and in the main, quite a few of those in attendance have had similar views.

I have very little stomach or faith, when you see a business close down, then a few days later, the very same director's open a very similar business Yet still leaving others in debt. And some of these people can and do it more than once.

No doubt you have another view, and it would be nice to hear that view.

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MelanyS

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The apparent improvement in the economy is without doubt a good piece of news, and we should all welcome. One of the issues I have with Labour in opposition is its "anti government" rather than "pro country" stance. This recovery is not to my taste because it has so far been driven by splurges in consumer spending at times of declining real standards of living, and while the household leverage is still almost 100% of GDP. Let's not forget the crisis was driven by a still inflated houses bubble and easy pay day loan . If productivity does not improve, the danger is "spend-all-you-earn-and-more" habits come back with a vengeance. The accumulation of consumer debt cannot be the engine behind any sustainable economic resurgence.

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