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Llangollen Railway

Discussion in 'Heritage Railways & Centres in the UK' started by 14xx Lover, Jan 4, 2010.

  1. jnc

    jnc Well-Known Member

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    Thanks for providing actual information direct from the coal-face.

    I have my fingers crossed that the railway can recover from this. Good luck to all there.

    Noel
     
  2. RichardBrum

    RichardBrum Member

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    Receivership has to be started by a lender, that's why the bank is mentioned. It is the bank that have taken action.
    The bank has very likely had specialist accountants look over the company before this point, & come to the conclusion that it can't trade out of it's difficulties, or be fixed through administration.
    (Administration can be started by the company directors)

    The receivers job is to realise moneys to pay off the debts to the bank, whether by selling assets, or the business.
    They are not there to 'fix' the business. (that's administration)
    If they can't sell it as a going concern for enough to pay the debts, then they liquidate it.


    The HMRC position is complex, & has recently changed (again!)
    HMRC are a secondary preferential creditor in relation to outstanding taxes ‘paid’ by employees and customers that are held by a business on its behalf, such as PAYE, VAT, employee NICs and Construction Industry Scheme (CIS) deductions.
    HMRC will remain an unsecured creditor for corporation tax and any other taxes owed directly by a company.

    Employees are a preferential creditor, so they have to be paid first.
     
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  3. Thompson1706

    Thompson1706 Well-Known Member

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    We do hope to open next month, but this would be subject to O.R.R. approval to operate. The Trust- financed work to renew the timber waybeams on the Dee Bridge has commenced today , with completion expected within two weeks. This will then enable the Trust- financed ballasting work at the new Corwen station to be carried out, as we couldn't get a loco up there due to a lack of track on the Dee bridge.
    Our volunteers have recently carried out major tidying up work around our sites at Llangollen.
    We do need an influx of new volunteers , and would also appreciate any donations to enable the Trust to return the railway to normality.

    Bob.
     
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  4. 49010

    49010 Member

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    Thanks for the updates, I've missed my trips to Llan over the last few years while I've been ill.

    Apologies if this has been covered before but, to what extent, if at all, are any of the debts of the trading company covered by the Govt's COVID/Bounce Back guarantees?
     
  5. osprey

    osprey Member

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    Very clever, very clever. Myself and two colleagues bought a company from receivers in the seventies, having to borrow money in the city and put up our houses up as collateral. We looked round the company...it was like Pompeii. No people, everything left half finished...the feeling for me was utter despair and sadness. The receiver had retained the handyman as caretaker, all the locks being changed. I took an immediate liking to him, a lovely chap, flat cap, pipe. He said "I'll show you this"...he removed a cupboard revealing a door. I could'nt believe, when I entered the room...stacked to the roof with bearings, some valued at thousands. "They have'nt seen this" he said "and they won't with a wink". I realised then we had a "free" scource of bearings for a year or so. It sealed the deal for me and my colleagues.
    The hard work was getting the workforce getting going again, they had been traumatised. Us three had come through the ranks from the shop floor, so we got to know everybody, sussed out the shirkers, there's always some, but won them over. Mushroom management wasn't the order, we kept them fully informed what was going on. It was an equally difficult situation winning back customers. But we succeeded working 7 day weeks......
     
  6. Macko

    Macko Well-Known Member

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    Thanks for the prompt and open reply. I will make it a priority to come over as soon as I can when you open.
     
  7. Crusti Boiler

    Crusti Boiler New Member

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    Interesting that Thompson1706 is posting given that he bailed out as a director, along with two others, on February 2nd (see Companies House for more details).
     
  8. osprey

    osprey Member

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    Well explained..I think you're correct about HMRC, there have been some changes...being retired I don't take as much interest in these things nowadays
     
  9. David R

    David R Well-Known Member

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    In this case the bank (Nat West) hold a charge over all the assets. This charge gives them the right to appoint a receiver who takes control of the assets and who's duty is to the bank first and foremost . Hence why the Directors have "invited" the bank to appoint a receiver. This usually takes place at the request of the bank who prefer to be "invited" than enforce their rights.

    The receiver will assess the best way of re-paying the bank and having achieved this will hand over to administrators or liquidators.

    The implication here seems to be that the trust will be investigating and discussing what assets it can purchase (or fund a newco to purchase), If that raises sufficient to repay the bank then the remaining assets/cash will probably be passed to either administration or liquidators . One challenge will be who holds the LRO (presumably the PLC) so I assume that means a new operator will first have to apply for a TWAO.

    David R
     
  10. flying scotsman123

    flying scotsman123 Nat Pres stalwart

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    Apparently it is the Trust not the Plc who have the LRO/TWAO, so that's one hurdle at least that doesn't need to be overcome.
     
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  11. RichardBrum

    RichardBrum Member

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    If there are any plans to buy the plc as a going concern, there's only a few weeks to do so, as the receivers usually don't like to take on the employment contracts.
     
  12. Sidmouth

    Sidmouth Part of the furniture Staff Member Moderator

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    apologies for being stupid , but how can you even work on the railway or plan to run it when the operating entity is now in receivership ?
     
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  13. martin1656

    martin1656 Resident of Nat Pres Friend

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    If that's the case, could the trust buy some of the assets of the PLC, from the liquidator , coaches etc, so it could operate the line, once they get the ok from ORR ?
     
  14. Sidmouth

    Sidmouth Part of the furniture Staff Member Moderator

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    I am increasingly curious as to what the PLC does hold ?

    who holds the lease on the land and buildings ?
    Who holds the LRO ?
    in whose books are the assets Track, signalling and any stock ?

    Was the PLC merely an expendable operating vehicle
     
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  15. Great Western

    Great Western New Member

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    How long do you keep pumping money into a potentially black hole ? If the PLC has gone under, surely there are very deep seated issues throughout the whole setup.
     
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  16. 35B

    35B Resident of Nat Pres

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    If it is/was, then I suspect the ripple effect of this may apply to other railways where the PLC part of the organisation would have limited value in extremis, but the set up could be expected to protect the underlying railway and operation.
     
  17. steam_mad

    steam_mad Member

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    Assume the intention stated would be to do it through the Trust itself; surely that just puts the Charitable Trust at serious risk of incurring the same losses that the PLC has?

    Carrying on as if nothing went wrong in the PLC will only lead to the eventual liquidation of the Trust too; a comprehensive review of the business model and what went wrong is, in my opinion, what’s needed before anyone would encourage me to donate to the Trust.
     
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  18. flying scotsman123

    flying scotsman123 Nat Pres stalwart

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    Likewise, the Trust having the LRO and lease on the land and buildings has been mentioned by a couple of people who sound like they know what they're on about so I have no reason to doubt that. Track, signalling and stock is more interesting though.

    Possibly, but not necessarily. If the considered view at the other end of all this is that it was the collapse of the engineering business that brought the whole thing down, then starting afresh without that might be enough to make it a going concern. Of course it might be that the collapse merely sped up the travel to an inevitable destination.

    It does make me feel a little uneasy that on my own railway, it is the Plc that own everything; land, track, LRO and rolling stock (aside from locos and other privately owned stock).
     
  19. Ploughman

    Ploughman Well-Known Member

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    Keep us informed Bob, you have many friends out there all wishing you well.
     
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  20. osprey

    osprey Member

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    It's not a railway, it's a business, and I'm not being rude to you personally. If placed in admin it might be able (a business) to generate profits which will aid the situation, even attract potential buyers.
     

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