Re: 5th Nov
And how has that ever differed?
Administration = corporate bankruptcy. It's like demanding the bankrupt give you the £10 back he owes you, while he's being chased for his house and other possessions. In terms of loss, a single customers means NOTHING.
At administration, the company is too far in trouble to recover. So the shareholders are already dead in the water in terms of seeing any further money. The staff aren't getting paid (from the boss to the lowliest employee) but they might still have a better pension fund etc. but there are NO MORE contributions to be made for anyone. It's not a question of favouritism but that the higher levels of management can ride it out easier because of their previous higher pay. Technically, they will be more out of pocket than any customer because they don't get paid and they were expecting to be paid MORE than anyone else.
In bankruptcy, the person you owe more gets priority. That's quite a sensible system because they invested more in you and trusted you more, and so should get more of their money back. You could say "We only have money to pay 50% of our creditors" and offer 50% of what everyone owes back, but that would mean suppliers having to massively increase their insurances against such things because 50% of £50m of stock is a bit more, and costs a LOT less to handle, than your 50% of the £5 cable you want to get a refund on. And the manager that led them into bankruptcy would still get 50% of his wages!
When a company goes bust, the only sensible way to handle it is to deal with the largest debts first. That's the conclusion that numerous courts have come to in numerous cases of corporate and personal bankruptcy. Because by the time you get down to the £5/10 range the chances are there will be no money left to even handle the administration of each case anyway, let alone provide a pittance of a refund. And those sorts of claims might even COST more money (which doesn't exist in the company and can NEVER be magically produced by that stage) to resolve than they would bring in. Courts cut their losses, or they would have millions of Comet customers suing them now and one bankrupt company could bring the whole country's law system to a halt.
Similarly, if *you* were going bankrupt, you wouldn't want to spend as long in court arguing about the £1.50 you owe your mate for the beer last week as someone trying to take your house away from you. One is infinitely more important, gets more priority, gets the bulk of the expenses of handling it, and when resolved probably means you have nothing worth £1.50 anyway.
You can decry the system as much as you want, it's really the only sensible way to handle it. And yes, the customer suffers. But the suppliers also suffer because they are unlikely to get all of their money back and one supplier might well lose more money than all the customers put together, if they have long contracts and invested in those contracts with new manufacturing, etc.
That said, those filing for bankruptcy (and especially commercial bankruptcy) should see MUCH harsher, non-financial, penalties. Personal liability in more cases (why didn't they know the suppliers were going to start denying them credit and scale back operations to give their staff decent redundancy and allow them warning to move on?), corporate penalties (not being able to run a company ever again, not being able to be a majority shareholder in a company ever again, not being able to ever be responsible for anything over X amount of money, etc.), and even more jail-time. Because once a company, especially, goes bust there's nothing you can do about it.
It was common in the 80's for software companies to hire programmers, put out a hit game, have the directors run off with the money, foist the company onto some unsuspecting victim, who have to declare themselves bust, sack all the programmers and then, next week, a new company starts up who cherrypicks from their old staff, and is run by the old director, and deals in exactly the same industry. It was so common that almost all software houses today, especially in the games industry, either came from those roots or their programmers did.
There needs to be regulation against that which hits those sorts of directors and others who mismanage companies hard. But in terms of handling a company that HAS NO MONEY to resolve its problems, you can't do anything but start with the largest debts and work your way down until the company literally has ZERO money in it whatsoever. You can't magic the money to hire staff to handle customer complaints once a company has gone bankrupt, and you can't not pay them or expect them to do it for free.
In terms of administration, the company itself is dead and only those who saw it coming could ever benefit from it (by selling off their shares early, cashing in their pensions, etc.). That's evidence for fraud, mismanagement, etc. alone so it doesn't tend to happen. It's not that the shareholders of Comet are all now lounging in the Bahamas and the director has his £1m retirement fund, they stop getting paid at the same time (and, if not, that money can be reclaimed from them personally). Now the shareholders are holding worthless bits of paper, the upper management are jobless and quite probably blacklisted from anything they might try to apply for ("Hire me! I bankrupted Comet!"), and the suppliers have given them millions of pounds worth of stock and not been paid. Sure, the upper echelons will survive it better and be parts of the old-boys-club, but that's nothing to do with the bankruptcy at all.
In bankruptcy, everyone loses but the company put in charge of administration (who make a profit from handling all those problems and deciding - independently of the company - who should be paid and how much). The problem is that end-customer are basically in the margin-of-error when it comes to their total investment in the company, even if they'll never see the £1000 laptop they bought.
And, to be honest, for anything significant, they should have used a credit card and then claimed it back. Anything less than that, and it's really not worth dealing with. Hell, even when Farepak went bust, the people who lost out most were suppliers not customers and that was national-news and had government intervention. Banks, maybe, would be a different matter because they don't really have "suppliers" as such, but the end result is still the same - you can spend £10,000 handling a £500,000 debt or £100 handling a £5 debt. There's only one sensible course of action that ensures the most money goes to debts, not administration.
Biting the hand that feeds IT
