Picsel US workers sue directors over 'unpaid wages' US ex-employees of Picsel, the Glasgow-based mobile software company that went titsup last year, are suing former directors of the firm for allegedly misleading them into working for free. The five staff were employed by San Francisco-based Picsel Technologies Inc, a wholly-owned subsidiary of now-titsup Glasgow-based Picsel …
Section 216 of the Insolvency Act doesn't allow reuse of a company name by a director or shadow director where the company has gone into insolvent liquidation.
It's possible Khand (the CEO and co-founder according to their site) wasn't a director, and I'm not sure of the details of the administration. However if I were a former employee of a company that were doing this I might be inclined to drop a line to the insolvency commissioner at http://www.insolvency.gov.uk/howtocomplain/complaindirector.htm. But that's just me.
I've never understood why companies are allowed to get away with this. If I went bankrupt, could I flog all my gear to my identical-twin-brother-that-no-one-knew-existed-before-now-but-who-really-exists-honest for 1p in the pound, then buy it all back again from him afterwards once my creditors were screwed over?
@IR, that typo has been fixed in the article now 8-)
I hope these employees get paid, with interest! It's one thing if this company went broke and remaining assets just got bought by some random other company, but when it's the same person owning both the broke company, and the successful one they are using to buy up the broke one, clearly they are just playing the shell game to try to get out of paying debts they owe.
Because he's based in the UK and can get away with it.
IIRC:
In the US, the prosecution establishes that there has been a fraud and then prosecutes people for perpetrating it. The only issue in court is whether or not the accused was or was not involved in the fraud.
In the UK, the high-powered defence barrister is allowed to reopen all the details of the fraud in question. The prosecution is then obliged to baffle the jury with all the highly technical financial wossanames in an attempt to prove that there actually was a fraud committed in the first place. This obtains a "not guilty" verdict on the grounds that "I have absofuckinglutely no idea what any of that meant" qualifies as "reasonable doubt".
This is why Satan is forced to don his woolies and skate to work whenever the SFO secures an important conviction.
to the joys of the global economy!
No, you as a consumer DO NOT get to benefit from lower prices, favorable currency exchange rates, and DON'T EVEN THINK about buying outside of our precisely defined regions codes for any product. Just because we outsourced for favorable tax and labor reasons doesn't mean they should expect to be PAID for the work they did. What are they thinking?!
That's only allowed for us, you serfs. Now - BACK TO WORK!
I put up the joke icon, but all too often it isn't. :(
The "the phantasmagoria of companies that share the Picsel name" and the shenanigans of "snapped up the assets of the former company from the administrators and promptly changed the name of the new company to match the old" is all a US court will need to hear.
Certainly didn't get all our money as implied in the final paragraph.
2 weeks arrears provided from public funds, and a similarly limited chunk (That portion regarded as "protected"), from the administrators.
3 months notice pay - mostly disappeared without trace.
Others in a similar boat.
Pay in lieu of unused holidays was not capped, unpaid arrears was.
If your employer gets into a death spiral, a last resort might be to get unpaid salary transferred to a holiday credit.
It's legal to re-use the company name if "a company acquires the whole or substantially the whole, of the business of an insolvent company, under arrangements made by an insolvency practitioner acting as its liquidator, administrator or administrative receiver, or as supervisor of a voluntary arrangement."
Liquidators have godlike powers in these matters, and yes, PWC basically rubberstamped the respawn. It's no skin off their nose, and they'll doubtless be back for another bite at the cherry soon enough.
Characteristically, the renaming to "Lescip" was laughable childish and pointless, since the re-use prohibition is on all names used within 12 months prior to the insolvency, "or any name so similar as to suggest an association with that company", so triple fail.
Happens way too often to count in the UK. Esther Rantzen and her programme ran regular spots naming people who'd run up huge debts on their business and stolen customers' money, then wound up the business and started another with the same name doing exactly the same thing, at no cost to themselves. Double-glazing was particularly notorious for it.
About 3 years ago now, an umbrella company "Prosperity 4" went bankrupt despite having a healthy turnover. One of the directors was taking illegal "loans" from the company. He paid them back, got off scott free, formed himself a new company, and bought P4's list of clients and fixed assets to carry on business as usual. (The other director was the one who particularly drove the company into administration - as well as illegal loans, he also invested the company's money in racehorses. Criminal action against him is still pending.) The new company is called "Tarpon" BTW, just in case you're tempted to do business with them.
, bcos one of the directors chose to illegally 'invest' the company's money in a string of racehorses
Rogerborg> the renaming to lescip was done by the administrators I believe, presumably as they knew they'd sold the rights to use those company names so didn't want any confusion...
McCoy> the last paragraph is certainly clumsy at best. Employees who were still with the company when the administrators sold it (that is, escaped the redundancy rounds by both the previous management and the administrators and had managed to keep their heads above water without leaving to get another job).
Graham Bartlett> Director's loans are perfectly legal; it's unclear from your post what was the illegal part of the first director's actions.
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