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Company In Administration

Pav

By Pav
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Glenn Engager

Glenn

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Posted (edited)

Forgive me for sounding daft but i thought when someone went into debt and bankrupt it was impossible to start again until they had sorted their debts out?So surely a loophole is being used or fraud is taking place?

I think LB have been particularly hit by the imported boats, which are targeting the same part of the market.I'd heard some months ago that they were cutting back (halving?) their workforce, I assumed the 'rumours' mentioned on here were of something else.Tim
This is where i get lost.Why has Liverpool boats got two companies?I thought there was only one? Edited by Glenn
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chris w Veteran II

chris w

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Posted (edited)
Forgive me for sounding daft but i thought when someone went into debt and bankrupt it was impossible to start again until they had sorted their debts out?So surely a loophole is being used or fraud is taking place?This is where i get lost.

 

 

Wrong! When "someone" goes into debt, you're correct. When a limited company goes into debt - NO. That's why it's called a Limited Company. It's liabilities are LIMITED to the value of the shareholder equity.

 

What a limited company cannot do in law though, is to carry on trading knowing that "it cannot meet its debts as they fall due" To do this means the laws of limited liability no longer apply to that company and the directors and offficers may be personally sued for outstanding debts. To have a case against a failed limited company boatbuilder for example, you would have to prove that, on the balance of probability, the company was indeed trading whilst unable to meet its debts. A company in such a position is also not allowed to take on further debt or again the laws of limited liability do not apply.

 

If a business genuinely fails and keeps within the laws of limited liability, the directors and officers can start a new business tomorrow and none of them bear any responsibility in law for the debt. Sh*t happens.

 

Chris

Edited by chris w
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Dominic M Influencer

Dominic M

Posted
Posted

I've only just read this saga - great that it has a relatively happy ending but poor Pav abnd his wife - I can't imagine the stress they must have been under.

 

Wrong! When "someone" goes into debt, you're correct. When a limited company goes into debt - NO. That's why it's called a Limited Company. It's liabilities are LIMITED to the value of the shareholder equity.

 

What a limited company cannot do in law though, is to carry on trading knowing that "it cannot meet its debts as they fall due" To do this means the laws of limited liability no longer apply to that company and the directors and offficers may be personally sued for outstanding debts. To have a case against a failed limited company boatbuilder for example, you would have to prove that, on the balance of probability, the company was indeed trading whilst unable to meet its debts. A company in such a position is also not allowed to take on further debt or again the laws of limited liability do not apply.

 

If a business genuinely fails and keeps within the laws of limited liability, the directors and officers can start a new business tomorrow and none of them bear any responsibility in law for the debt. Sh*t happens.

 

Chris

 

Absolutely right. There are many examples of boatbuilders going into administration and reappearing in a new incarnation the next day - Tony Gallimore is a recent example. We have one of his "snatch backs" sitting here - a shell lined out and partly fitted, no engine, painted in grey primer, owners state that they had already parted with £70k. Bryn Lees was another.

 

Whilst it is true that a company should not carry on trading knowing that it cannot meet its debts, find me an example of where this has been enforced. For the private individual the litigation process is prohibitively expensive. For the authorities the paper trail is usually too complicated and to genuinely demonstrate that the directors were culpable is probably a very grey area.

 

It seems very wrong and the law really should be tightened up, but not so as to penalise someone who despite their best efforts and intentions goes bankrupt. They must be allowed to try to make a living again.

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Chickadee Proficient

Chickadee

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Posted

This might be a bit of a stupid question but i was just wondering. With all these boat building companys going under will this force the price of second hand boats up?

I would like to be on the water sometime in the next year but it worries me a little that people will loose trust in new builds and look at second hands more instead.

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andywatson Rising Star

andywatson

Posted
Posted (edited)
Absolutely right. There are many examples of boatbuilders going into administration and reappearing in a new incarnation the next day - Tony Gallimore is a recent example. We have one of his "snatch backs" sitting here - a shell lined out and partly fitted, no engine, painted in grey primer, owners state that they had already parted with £70k.

 

See my earlier post (Jan 27th at 4.58) on this thread...............

Edited by andywatson
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Boxman Gongoozler

Boxman

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Posted
This might be a bit of a stupid question but i was just wondering. With all these boat building companys going under will this force the price of second hand boats up?

I would like to be on the water sometime in the next year but it worries me a little that people will loose trust in new builds and look at second hands more instead.

An interesting point Chickadee.

 

Conventional wisdom seems to be that if a market is in decline it may initially manifest itself at the luxury end of the market ie new bespoke boats. This will be followed by a overall reduction in demand and if demand falls so will the price. Over the last decade we have seen boat prices rise rapidly partly due to increased cost but mainly due to increased demand.

 

Buyers will then become more selective, demand value for money, and I would expect them to be able to drive down the prices of new and second hand boats. Note that nb Jazz (about 10 years old) went on the market last year at £105K, was reduced a few months ago to about £95K and is now on the market with a different broker for £85K. A strong indication of reducing demand and leading to many problems for sellers.

 

This will of course affect Gary's business, but if he plays his cards right he may be able to benefit from new opportunities that always appear in a declining market. His business seems to have many strengths.

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bottle Veteran II

bottle

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Posted
Note that nb Jazz (about 10 years old) went on the market last year at £105K, was reduced a few months ago to about £95K and is now on the market with a different broker for £85K. A strong indication of reducing demand and leading to many problems for sellers.

 

Possibly but it may also prove that the original asking price was well over its true value and the latest asking price is nearer to the correct one.

 

I think that the boat market will change, it always is, the first ones to be 'in trouble' will be those that build for the pleasure owner, the boat builder that 'specialises' in boats for the liveaboard will fair better.

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PaddingtonBear Rising Star

PaddingtonBear

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Surely nb Jazz is an example of a boat being overpriced in ANY market - 10 years old and 105k!! (even 85k) and although I don't know the details, is this another example of a highly specified, very individualistic boat failing to capture the imagination of other buyers. There have been many examples recently of couples buying into the 'dream' and spending fortunes (towards £200000 in one case that was in a magazine) on fancy, very personalised interiors reflecting their tastes - chinese, art nouveau etc and then wondering why they couldn't recoup their money. In one recent case, a boat featured in a magazine and highly praised for its very individualised slant on things was soon for sale, at a very high price, never having been used in anger. Magazines and the boatbuilders bear a huge responsibility for these expensive mistakes, for without their active encouragement, most people would be happy with a simple, well made product at a realistic price, which is why the Polish boats score so well.

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starman Experienced

starman

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Posted

I can't see how it's the magazines' fault - these big expensive boats are all commissioned by people with big, expensive tastes precisely because they want something unique/flashy/new etc. Inevitably they will take a tumble in price -- it's the same in every market: houses, cars, furniture, clothes: high fashion bespoke one-offs very rarely hold their value because if you've got lots of money to spend you want to reflect your taste (or lack of) not someone else's.

(The really big problem with the £200k boat was that it was a speculative build. Now that was a bad business move by the builder - at least the builders of the other boats got their money.)

 

Magazines write about these boats because maybe a few of the ideas they show off could filter down into other, cheaper boats -- just as those bizarre catwalk fashion items end up in a different form in M & S

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Gary Peacock Veteran

Gary Peacock

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Posted (edited)

I think you can spin it in various ways but the narrowboat market is on its arse and things aren't ever going to be the same again, the "we will see what next year brings" attitude seems to prevail among many builders.

 

What really puzzles me is the new companies that continue to spring up all the time I just don't grasp what their business plan is about?

Edited by Gary Peacock
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Brummage Contributor

Brummage

Posted
Posted (edited)
I can't see how it's the magazines' fault - these big expensive boats are all commissioned by people with big, expensive tastes precisely because they want something unique/flashy/new etc. Inevitably they will take a tumble in price -- it's the same in every market: houses, cars, furniture, clothes: high fashion bespoke one-offs very rarely hold their value because if you've got lots of money to spend you want to reflect your taste (or lack of) not someone else's.

(The really big problem with the £200k boat was that it was a speculative build. Now that was a bad business move by the builder - at least the builders of the other boats got their money.)

 

Magazines write about these boats because maybe a few of the ideas they show off could filter down into other, cheaper boats -- just as those bizarre catwalk fashion items end up in a different form in M & S

 

I think magazines write about these boats simply because it's a cheap way of filling a few pages :clapping:

 

As regards paying that much for a new boat with a particularly personal specification, there has to be quite a few people out there that have had a boat built and paid top dollar for it with the intention of living aboard, only to find that after a few months or a year or two that it wasn't all they dreamed it would be. They are then left with a boat to sell that, because of its personalization will realise much less than they paid. The depreciation on such craft has got to be significantly higher than on a traditionally built boat, hasn't it?

 

Edited to say: I wonder how many boatbuilders would warn them about depreciation.

Edited by Brummage
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Gary Peacock Veteran

Gary Peacock

Posted
Posted (edited)

Meandering slightly off this posts path!

 

We have just had a communication from El Gordo's boys at the ministry of red tape and wasted moneys informing us with veiled threats of fines and suspension of trading etc that-

 

The company's reg name has to be on all letters, notices, websites, emails, bills and parcels etc!

 

More interesting all letters, order forms, websites and emails must have:

Place of registration (i.e. England), registration number, address of registered office, and details of company's membership of trade/professional association including registration number.

 

Well El Gordo and the boys can piss off because we were doing most of it already!

 

But it got me to thinking their are a lot of websites out their in the boating world that are very anonymous, also some of those in the boatbuilding game names can't be found on the companies house Websearch website so must be trading names only, So who is behind them and what do they have to hide?

 

While others registered company number displayed is not the company that the website seems to imply owns the website.

 

Could be just oversights but if El Gordo and the boys says it's so it must be a bit iffy?

 

Obviously some small builders are sole traders and things work a bit differently for them.

Edited by Gary Peacock
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Dominic M Influencer

Dominic M

Posted
Posted
This might be a bit of a stupid question but i was just wondering. With all these boat building companys going under will this force the price of second hand boats up?

I would like to be on the water sometime in the next year but it worries me a little that people will loose trust in new builds and look at second hands more instead.

 

From experience the second hand market values are dictated by the cost of new boats.

 

 

An interesting point Chickadee.

 

Conventional wisdom seems to be that if a market is in decline it may initially manifest itself at the luxury end of the market ie new bespoke boats. This will be followed by a overall reduction in demand and if demand falls so will the price. Over the last decade we have seen boat prices rise rapidly partly due to increased cost but mainly due to increased demand.

 

Buyers will then become more selective, demand value for money, and I would expect them to be able to drive down the prices of new and second hand boats. Note that nb Jazz (about 10 years old) went on the market last year at £105K, was reduced a few months ago to about £95K and is now on the market with a different broker for £85K. A strong indication of reducing demand and leading to many problems for sellers.

 

This will of course affect Gary's business, but if he plays his cards right he may be able to benefit from new opportunities that always appear in a declining market. His business seems to have many strengths.

 

In the case of Jazz the simple answer has to be that if it is on the market and visibly so when other secondhand boats are selling (and they have been) then the price must be wrong. Some owners find that hard to accept I fear, and some brokers don't want to turn away the business.

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Brummage Contributor

Brummage

Posted
Posted (edited)

Dominic said "In the case of Jazz the simple answer has to be that if it is on the market and visibly so when other secondhand boats are selling (and they have been) then the price must be wrong. Some owners find that hard to accept I fear, and some brokers don't want to turn away the business."

 

Hit the nail on the head there I reckon Dominic. It's the same as some houses that you see on the market for a year or more. They don't sell because no-one will pay the price they are asking and the owners probably think they are worth more than they actually are. Jazz's owner/s may well be regretting all the 'special' fixtures and fittings now and wish they had gone more traditional. Just a thought.

 

Edited to say: Maybe those who are looking to live aboard and who's only experience of boating has been a couple of holidays may be better advised buying second hand to start with. Then if they are still smitten by the waterbug a year down the line, they can then consider a fancy whistles and bows new build.

Edited by Brummage
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