Phones 4u 'Forced Into Administration'

JSemple3 · 22-09-2014, 22:10

362 Stores and almost 1700 jobs confirmed to be going:

http://www.bbc.co.uk/news/business-29319417

With the rest being bought by EE/Vodafone I guess it's safe to almost say RIP

DarthFader · 23-09-2014, 11:13

Does seem wrong to me that two companies can withdraw contracts cajsing thw shop to close then get to get the stores at a no doubt good deal saying that the FC shouldn't have saddled them with all that debt

lost boy · 23-09-2014, 14:31

Quote:

Originally Posted by DarthFader

Does seem wrong to me that two companies can withdraw contracts causing the shop to close then get to get the stores at a no doubt good deal saying that the FC shouldn't have saddled them with all that debt

I agree.

It's no shock that Vodafone/EE are all 'deny deny deny' about all the accusations being hurled at them, I mean they're hardly going to admit it are they? Likewise it's not a huge surprise that P4U's side (for want of a better term) are blaming VF/EE, because they're hardly going to blame themselves are they?

Overall point being, IMHO there's some fault on both sides. Who's more at fault? That is the million pound question, but the more that comes out about this the more likely it was going to happen at some point regardless. As you say though, how this has all ended up (the sheer speed of it) does leave quite a nasty taste in the mouth.

WelshBluebird · 23-09-2014, 14:34

Quote:

Originally Posted by DarthFader

Does seem wrong to me that two companies can withdraw contracts cajsing thw shop to close then get to get the stores at a no doubt good deal saying that the FC shouldn't have saddled them with all that debt

But surely any company is at risk of that? If you have just a couple of big companies that supply your business, and they pull out, then you are screwed. No difference to any other industry. P4U are not special here.

I did a work placement with a company who made Innocent Smothies. Everyone at the company knew that if Innocent went elsewhere, then the company would be in trouble.

jonmorris · 23-09-2014, 14:34

I am inclined to believe that management of Phones 4u meant its demise was inevitable, and some actions could almost be considered as fraud. I'm sure all the skeletons will come out of the cupboard in due course.

And I believe the networks took full advantage of this, so didn't deliberately seek to put the company out of business from the outset - but once aware of the situation decided to help speed things up.

So, yes, six of one and half dozen of the other...

japaul · 23-09-2014, 17:49

No idea as to the accuracy of this but here's yet another take on why EE walked away according to 'a high level source close to the negotiations.' According to this, EE actually agreed a new deal with P4U but it was kicked out by Orange.

http://www.mobiletoday.co.uk/news/in...or-source.aspx

chriskeens · 23-09-2014, 18:45

Quote:

Originally Posted by sethpet

You mean apart from loading debt onto the company and then using it to pay themselves a dividend. Then it appears from the vodafone statement the debt repayments they created made them dependent of commissions the networks were not prepared to pay.

Seems like the asset stripping by the parent company has hit the staff the hardest.

Typical private equity ownership. Load the company with debt, avoid paying corporation tax due to the intrest on the debt being tax deductible, refinance via the issuing of bonds to pay themselves back their initial cash investment, leaving the company very vulnerable in the event of any issues. No company should leave themselves so reliant on another company that they have no failsafe should they fall out.

Everything Goes · 17-04-2015, 22:27

Apple iPhone 6 customer gets £2.16 refund

A customer who bought an iPhone 6 16GB SIM free at a cost of £539.99 has been awarded a £2.16 refund by the administrator

http://www.neowin.net/news/bought-an...ll-be-refunded

Thine Wonk · 17-04-2015, 22:34

Quote:

Originally Posted by Everything Goes

Apple iPhone 6 customer gets £2.16 refund

A customer who bought an iPhone 6 16GB SIM free at a cost of £539.99 has been awarded a £2.16 refund by the administrator

http://www.neowin.net/news/bought-an...ll-be-refunded

This is normal, all the funds left after the company is liquidated and all the tax and other things are paid gets distributed to the creditors.

Roush · 17-04-2015, 23:20

Payouts for unsecured creditors (such as customers) aren't expected for 12+ months anyway.

£600k is the maximum the law allows to be set aside for unsecured creditors, and there's an estimated £168m owed to unsecured creditors, so 0.36% estimated payout at present.

Randomguy1 · 20-04-2015, 15:13

It's annoying that these shops expect you to buy through them yet it's the same price as through Apple. You're better going direct next time I feel sorry for those that have lost out.

WelshBluebird · 20-04-2015, 15:31

Surely there should be grounds for something than just being treated as an unsecured creditor though?
Surely at the point they were selling these the management must have known they were about to go under. It couldn't have been that much a surprise for them? It was just a few days before!
I have no real idea about the law here but there must have been something illegal about that? Taking money while you know you are unlikely to be able to supply the goods?

swb1964 · 20-04-2015, 16:36

Quote:

Originally Posted by WelshBluebird

Surely there should be grounds for something than just being treated as an unsecured creditor though?
Surely at the point they were selling these the management must have known they were about to go under. It couldn't have been that much a surprise for them? It was just a few days before!
I have no real idea about the law here but there must have been something illegal about that? Taking money while you know you are unlikely to be able to supply the goods?

But who would you prosecute? Obviously not the poor sap in the shop. You can't prosecute the business because it has gone. Could you prosecute a director? It would be fair maybe but that still wouldn't get this guy his money back.

Chrysalis · 20-04-2015, 19:07

use a credit card not debit card for high value purchases.

swb1964 · 20-04-2015, 19:53

Quote:

Originally Posted by Chrysalis

use a credit card not debit card for high value purchases.

Yes. Obviously it is less of an issue if you are taking it away there and then, but for anything you order in advance, a CC is best.

22-09-2014, 22:10	#101
JSemple3 Forum Member Join Date: Jan 2003 Posts: 7,677	362 Stores and almost 1700 jobs confirmed to be going: http://www.bbc.co.uk/news/business-29319417 With the rest being bought by EE/Vodafone I guess it's safe to almost say RIP

23-09-2014, 11:13	#102
DarthFader Forum Member Join Date: May 2004 Location: Fareham, Hampshire Posts: 3,753	Does seem wrong to me that two companies can withdraw contracts cajsing thw shop to close then get to get the stores at a no doubt good deal saying that the FC shouldn't have saddled them with all that debt

23-09-2014, 14:31	#103
lost boy Forum Member Join Date: Sep 2005 Location: Norfolkland Posts: 1,787	Quote: Originally Posted by DarthFader Does seem wrong to me that two companies can withdraw contracts causing the shop to close then get to get the stores at a no doubt good deal saying that the FC shouldn't have saddled them with all that debt I agree. It's no shock that Vodafone/EE are all 'deny deny deny' about all the accusations being hurled at them, I mean they're hardly going to admit it are they? Likewise it's not a huge surprise that P4U's side (for want of a better term) are blaming VF/EE, because they're hardly going to blame themselves are they? Overall point being, IMHO there's some fault on both sides. Who's more at fault? That is the million pound question, but the more that comes out about this the more likely it was going to happen at some point regardless. As you say though, how this has all ended up (the sheer speed of it) does leave quite a nasty taste in the mouth.

23-09-2014, 14:34	#104
WelshBluebird Forum Member Join Date: Nov 2008 Posts: 720	Quote: Originally Posted by DarthFader Does seem wrong to me that two companies can withdraw contracts cajsing thw shop to close then get to get the stores at a no doubt good deal saying that the FC shouldn't have saddled them with all that debt But surely any company is at risk of that? If you have just a couple of big companies that supply your business, and they pull out, then you are screwed. No difference to any other industry. P4U are not special here. I did a work placement with a company who made Innocent Smothies. Everyone at the company knew that if Innocent went elsewhere, then the company would be in trouble.

23-09-2014, 14:34	#105
jonmorris Forum Member Join Date: Jul 2002 Location: a land filled with trolls Posts: 12,018	I am inclined to believe that management of Phones 4u meant its demise was inevitable, and some actions could almost be considered as fraud. I'm sure all the skeletons will come out of the cupboard in due course. And I believe the networks took full advantage of this, so didn't deliberately seek to put the company out of business from the outset - but once aware of the situation decided to help speed things up. So, yes, six of one and half dozen of the other...

23-09-2014, 17:49	#106
japaul Forum Member Join Date: Apr 2013 Posts: 1,662	No idea as to the accuracy of this but here's yet another take on why EE walked away according to 'a high level source close to the negotiations.' According to this, EE actually agreed a new deal with P4U but it was kicked out by Orange. http://www.mobiletoday.co.uk/news/in...or-source.aspx

23-09-2014, 18:45	#107
chriskeens Forum Member Join Date: Nov 2008 Posts: 14	Quote: Originally Posted by sethpet You mean apart from loading debt onto the company and then using it to pay themselves a dividend. Then it appears from the vodafone statement the debt repayments they created made them dependent of commissions the networks were not prepared to pay. Seems like the asset stripping by the parent company has hit the staff the hardest. Typical private equity ownership. Load the company with debt, avoid paying corporation tax due to the intrest on the debt being tax deductible, refinance via the issuing of bonds to pay themselves back their initial cash investment, leaving the company very vulnerable in the event of any issues. No company should leave themselves so reliant on another company that they have no failsafe should they fall out.

17-04-2015, 22:27	#108
Everything Goes Forum Member Join Date: Mar 2002 Location: In the future.... Posts: 11,259	Apple iPhone 6 customer gets £2.16 refund A customer who bought an iPhone 6 16GB SIM free at a cost of £539.99 has been awarded a £2.16 refund by the administrator http://www.neowin.net/news/bought-an...ll-be-refunded

17-04-2015, 22:34	#109
Thine Wonk Forum Member Join Date: Mar 2009 Posts: 14,577	Quote: Originally Posted by Everything Goes Apple iPhone 6 customer gets £2.16 refund A customer who bought an iPhone 6 16GB SIM free at a cost of £539.99 has been awarded a £2.16 refund by the administrator http://www.neowin.net/news/bought-an...ll-be-refunded This is normal, all the funds left after the company is liquidated and all the tax and other things are paid gets distributed to the creditors.

17-04-2015, 23:20	#110
Roush Forum Member Join Date: Mar 2011 Location: Hertfordshire Posts: 2,938	Payouts for unsecured creditors (such as customers) aren't expected for 12+ months anyway. £600k is the maximum the law allows to be set aside for unsecured creditors, and there's an estimated £168m owed to unsecured creditors, so 0.36% estimated payout at present.

20-04-2015, 15:13	#111
Randomguy1 Forum Member Join Date: Apr 2015 Posts: 176	It's annoying that these shops expect you to buy through them yet it's the same price as through Apple. You're better going direct next time I feel sorry for those that have lost out.

20-04-2015, 15:31	#112
WelshBluebird Forum Member Join Date: Nov 2008 Posts: 720	Surely there should be grounds for something than just being treated as an unsecured creditor though? Surely at the point they were selling these the management must have known they were about to go under. It couldn't have been that much a surprise for them? It was just a few days before! I have no real idea about the law here but there must have been something illegal about that? Taking money while you know you are unlikely to be able to supply the goods?

20-04-2015, 16:36	#113
swb1964 Forum Member Join Date: Jan 2015 Posts: 2,455	Quote: Originally Posted by WelshBluebird Surely there should be grounds for something than just being treated as an unsecured creditor though? Surely at the point they were selling these the management must have known they were about to go under. It couldn't have been that much a surprise for them? It was just a few days before! I have no real idea about the law here but there must have been something illegal about that? Taking money while you know you are unlikely to be able to supply the goods? But who would you prosecute? Obviously not the poor sap in the shop. You can't prosecute the business because it has gone. Could you prosecute a director? It would be fair maybe but that still wouldn't get this guy his money back.

20-04-2015, 19:07	#114
Chrysalis Forum Member Join Date: Sep 2003 Location: Leics Posts: 581	use a credit card not debit card for high value purchases.

20-04-2015, 19:53	#115
swb1964 Forum Member Join Date: Jan 2015 Posts: 2,455	Quote: Originally Posted by Chrysalis use a credit card not debit card for high value purchases. Yes. Obviously it is less of an issue if you are taking it away there and then, but for anything you order in advance, a CC is best.

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Phones 4u 'Forced Into Administration'