Le Maitre in Liquidation

[Junior8]

Another example of the fact that total exemption annual reports really aren't worth the paper they are written on.

[Stuart91]

Another example of the fact that total exemption annual reports really aren't worth the paper they are written on.

 

The rules changed a few years ago, so that any company deemed a "micro" entity has to submit virtually nothing. I can appreciate the impetus to minimise admin headaches for startups and tiny companies, but the category is quite broad.

 

Micro entities are companies with 10 employees or less, turnover of £632k or balance sheet value of £316k or less. (You need to have two out of the three to qualify). The thing is, a Micro entity can still do a serious amount of financial damage to suppliers and creditors whilst remaining relatively opaque.

[Junior8]

I couldn't have put it better myself. But in reality of you are keeping proper books there should be no admin headache at all. But really the whole system is too weak. In 2018 I was covering the collapse of a group of companies where the only thing keeping the whole edifice afloat in terms of the 'balance sheet' was intercompany debt. These were not exemption accounts. It was shown year after year and at no point it seems did the auditors bother to ask how this £4m would be paid on demand. I think they had £153 when the administrators were called in. In reality the structural weaknesses of the group were hiding in plain sight but should it be up to a supplier to do this sort of checking? Edited February 4, 2021 by Junior8

[Stuart91]

should it be up to a supplier to do this sort of checking?

 

It's not feasible to do so, which is why many use credit insurance. Smaller companies often have no option but to take on the risk.

 

Annual accounts are only a snapshot of a trading position on a particular day. I managed to inadvertently look unusually profitable one year, because we'd been paid upfront for an installation project but hadn't started buying the kit for it when the financial year ended.

 

If you have a year end of 31st March, the accounts prepared based upon that date, are still the most recent available in December of the following year. A company can deteriorate drastically in that time. Failing companies will often go looking for new suppliers when they have exhausted the credit limit (and patience) of their regular ones.

 

Unfortunately I fear there's going to be a wave of bankruptcies soon as companies run out of cash, loans are depleted, and furlough comes to an end.

[bigclive]

Who actually gets the money when HSE issues "fines"?

 

I see so many seemingly excessive fines for petty things that I wonder if this is just another facet of the lucrative safety industry.

With advance apologies that I would never want to disagree with statesman Clive, but out of respect for those involved I feel it necessary to mention LM had a delivery lorry turning round in their neighbour's yard explode in 1989 killing one, an explosion on site in 1990 killing one and another explosion on site in 2018 killing one, so whilst there is no doubt truth in what you say, it appears on the surface at least that LM did have an entirely unblemished safety record.

 

Is there a single pyro company that hasn't had incidents? The very nature of the industry makes it very hard to allow for every conceivable scenario.

[TomHoward]

If the accidents are unavoidable then I'd agree they shouldn't have had an HSE fine - however Phoenix companies to clear debts to HMRC and suppliers is one thing but to clear HSE fines enforcement is a bit morally dubious to me.

For clarity the 1989 explosion was from the delivery company packaging (8000 fuse heads in a rusty tin box designed for 500 ignited when the lorry went over a speed bump) which is not the fault of LM directly.

 

Also one of the news articles refers to a £2000 fine in 1988 for an employee dying packing fireworks, so that's 4 deaths in just over 30 years. There's also a 2016 HSE improvement notice for LM for failing to prevent ESD discharge prior to the 2018 explosion.

I appreciate it's a risky industry though but the idea that you can clear an enforcement fine by liquidation is a little but suspect for my liking. (If my understanding of that is right)

[Junior8]

If the accidents are unavoidable then I'd agree they shouldn't have had an HSE fine - however Phoenix companies to clear debts to HMRC and suppliers is one thing but to clear HSE fines enforcement is a bit morally dubious to me.

 

Well if you're talking about morally dubious it seems to me that collecting taxes from your employees and customers for it then to vaporise is about as morally dubious as you can get. Don'f forget also that redundancy payments unpaid wages and untaken holiday also fall on the public purse if the company has no assets.