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Freshfields, Linklaters advise on Woolies administration

30,000 unemployed offset by a few million into liquidation team wallets 30,000 newly unemployed weekly income earners, while several millions in cash is paid out for the intellectual efforts of the liquidation team. The same old tired formula, the top tier firms get appointed in preference to equally able though much less expensive lawyers, to do routine closing down: sack staff, arrange fire sales to well represented parties, charge a fortune take their slice leaving the liquidators to hammer the proceeds. Often there is nought left, but only after several years of tedious paperwork and delays. Meantime, the general shareholders get thoroughly screwed and the board plus advisors before the event: in house accountants and legal eagles , and the auditors just walk off with nary a mark on them. Just how many directors , accountants and lawyers does it take to read the writing on the wall? Woolworths was trading into an illiquid position, but that did not happen in a week. Is the entire City staffed by simple minded optimists that cannot read a financial forecast and the need for cash flow? Why not consolidate the ‘profitable’ shops , offer staff options of reduced salary or extra hours to get through the slump and get Darling on board to buy a temporary equity stake to fund the creditors and keep those jobs in place. Better spend the money there than making the ‘few hundred’ in the City purringly obese with taxpayer largesse.

27-Nov-2008

12:39 pm