Parasol Sold up for £24million

[malvolio]

They don't invoice Parasol, they merely submit a record of time worked. Parasol invoices the end client, sorts all the PAYE/NIC/VAT payments and pays them nett, which is why I say they are employees. And as employees, they sit where I said, behind the people that own the money and ahead of any commercial debtors.

If they were a composite or a managed company, however, they would be down at the end with the bailiffs and the unsecured creditors.

[John Galt]

They don't invoice Parasol, they merely submit a record of time worked. Parasol invoices the end client, sorts all the PAYE/NIC/VAT payments and pays them nett, which is why I say they are employees. And as employees, they sit where I said, behind the people that own the money and ahead of any commercial debtors.

If they were a composite or a managed company, however, they would be down at the end with the bailiffs and the unsecured creditors.

I don't understand this Malvolio. If they owe £20 million then if everything does go to pot they will still owe £20 million and will have to find the money or go bankrupt. They may have loads of cash in the bank but surely that is owed to the IR and the VAT office as well as the contractors and I can't imagine Hector waiting at the back of the queue. I don't know much about all this but once the bank or VCs and the IR and the VAT man have been paid I can't see that there will be much left for the contractors.

[ASB]

I don't understand this Malvolio. If they owe £20 million then if everything does go to pot they will still owe £20 million and will have to find the money or go bankrupt. They may have loads of cash in the bank but surely that is owed to the IR and the VAT office as well as the contractors and I can't imagine Hector waiting at the back of the queue. I don't know much about all this but once the bank or VCs and the IR and the VAT man have been paid I can't see that there will be much left for the contractors.

It's the order.

1) Debenture Holders in full
2) If anything left secured creditors in full
3) If anything left Employee wages (up to 4 months) and redundancy in full.

I am not entirely sure about the order of 1-3 which is what I was asking Malvolio and how I beleive he replied.

Once this has been done, if there is anything left it is paid amongst the proved ordinary creditors. These now include HMCR.

Hector waits at the back of the queus like all ordinary creditors now. Until the reform of the insolvency act they got in first.

A side effect of this is that Hector is now MUCH keener to launch insolvency proceedings when they are owed money.

[Xtrain]

VC's will have interest bearing debentures no doubt whilst banks are always secured creditors. VC's normally cause the winding up of a failing venture as they always bail out first, they are not interested in just keeping companies alive as they invest on a "double their money in 3 years" basis.

The problem here of course is most umbrellas operate on a minimum wage plus bonus/commission and expenses basis so the true value of salary that would have to be coughed up to the employee creditors would be at the minimum wage level. And no doubt the small print will not guarantee the other bits.

[tim123]

If any business goes wrong then the creditors are prioritised e.g. banks always come high up the list. You can bet your bottom dollar the VC people will be high up too. So to answer your question "If it does all go wrong would the contractors still get their money?" the answer is "only after all those with higher priorities are paid first" (which is basically "no, they won't get their money")

The banks are only high up if their money is secured. Otherwise they are the same as anybody else.

The VC people are shareholders. They are last on the list.

tim

[Tinkerbel]

Simon

I'm pretty sure Ascot Drummond were backed by VC's, whatever happened to them?

Robot

Ascot Drummond are still there. Worked there for 5 years through the excitement of the administration until the end of last year then moved on to pastures new.