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BETTER BUSINESS

extracted security or the like out of a Printweek stablemate HR magazine
distressed company, should be aware recently, that one way to recession
that an insolvency official has the proof a business is to retain good
right to challenge actions taken by an experienced and qualified staff. The
insolvent company during the period employment world, post-Covid, has
of up to two years prior to its changed, jobs are plentiful but there
demise.” are not enough good qualified and
In practical terms, this means that available staff. As a result, Else thinks
transactions must not be at an under- that “hanging onto the right people,
value (too cheap) or unfairly improve working in the right way and in the
the position of one creditor over right positions, is a major factor for
another – particularly when dealing success in any business”.
with a connected party such as a rela- The problem as he sees it is that
tive or fellow director. when staff leave, costs rise because
“salaries rise, and the cost of recruit-
Keep it confidential ment is prohibitive through the need
It’s very easy in the modern world to pay recruitment agents”.
to spread damaging rumours. So, In his view, organisations that
where a firm has concerns over a sup- motivate and inspire employees and
plier or a customer, Taylor’s advice is consider their work/life balance, as
to not broadcast these concerns. He well as offer good promotion pros-
refers to a 1997 case in which pects, will put themselves in pole
Norwich Union was held to be vicari- position. Part of this, he says, is to
ously liable for alleged defamatory “make sure that the business com-
comments made by its employees municates with staff and listens to
about Western Provident what their preferences are”.
Association’s financial status. The But equally, firms must protect
case was settled out of court by their position and so Else advises
means of an apology and damages – “solid contracts that provide employ-
reportedly £450,000 plus costs. ers as much protection as possible
Careless talk could, quite simply, with, for example, binding non-com-
prove very expensive. pete clauses and longer notice peri-
label them as belonging to the supplier. ods, particularly for staff in
There should also be a right to enter the customer’s premises to check that Spread your risk management and sales positions”.
RoT provisions have been complied with and/or to recover goods”. Taylor’s last point, beyond putting
Importantly, suppliers cannot use force to enter premises. Even so, Taylor in place credit control procedures, Costs and cash
says that clauses “should be enforceable on non-payment and without hav- good contractual terms and under- The second key point for Else,
ing to wait for a formal insolvency event”. Why? It’s easier to enforce against standing the legal position, is to avoid based on experience from dealing
a company than a battle-hardened insolvency practitioner. being beholden to one customer (or with distressed clients, is to keep
Suppliers should be realistic and it’s important to remember that materi- supplier for that matter). And in rela- costs under close surveillance. With
als used in a manufacturing process may be impossible to identify or sepa- tion to risks posed by supplier failure, parts of the printing industry being
rate out. vertical integration to protect a sup- predicated on low margins and high
ply chain might be the answer. As levels of investment, control is essen-
Know your rights Taylor comments: “A distressed sup- tial.
Once a firm has hit the buffers, the insolvency process takes over. From a plier may be receptive to an acquisi- He worries that firms don’t have
practical perspective, Taylor has seen insolvency officials reject claims that tion approach from a customer.” their eye on the ball. This is why he
are lodged with them. In response he says to “not be afraid to fight your cor- Chris Else, Else Solicitors recommends “keeping up with the
ner and take legal advice as to the validity of your claim”. latest demands but balancing them
Equally, he says to remember that directors may not always be able to hide Consider staff first against the time lag by when invest-
behind the corporate veil of a limited liability company; if a director has Chris Else, managing partner at ments are converted into production
traded past the point where the company couldn’t have avoided insolvency Else Solicitors, sees the issues that and cash”. He also says: “Make sure
or made personal promises, he says that they may be personally liable for the relate to print as being the same as that assets are used properly, and the
company’s debts. those for other sectors. cost of funding does not erode proper
Taylor says that it should be noted at this juncture that “those that have He picks up on a point noted by profitability.”

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