The Heritage Trust and Bristol cars in administration

[Peter Grace]

I am still a little confused as to why they would let their workforce go when even the receivers acknowledged a number of orders waiting to be fulfilled? Is there a skeleton staff working on the cars they have promised to customers? Or is it common practice in the UK to turn all the machines off and turn off the lights until a buyer is found? If so, it seems more than cynical if they think they can just ask staff to come back later on?

[Kevin H]

Originally Posted by Peter Grace

I am still a little confused as to why they would let their workforce go when even the receivers acknowledged a number of orders waiting to be fulfilled?

In Australia it is illegal to trade while insolvent, that means it's also illegal to employ people whom you cannot pay. Similar laws probably exist in the UK.

As for outstanding orders, we don't know if fulfillment of those orders would be profitable, or if the company could continue operating until the orders were fulfilled. If you have taken deposits from people that makes for a tricky situation.

[Peter Grace]

Well I am not an expert on this (as may become quickly apparent) but in NZ once a company is in receivership, it can continue to trade but the new debts become the receiver's debts (who just skims if off the value of the assets anyway). That's how large retail chains clear stock or continue to be a desirable business to own. In this country, the minute you stop trading the business falls dramatically in value, and having no staff would intensify that. But perhaps administration is another thing, although Chapter 11 in the US allows you to continue trading.