Bankruptsy - UK Style?

I was told the other day by a steel mill salesman aboot the status of the screw machine industry in the US, I made mention that those of us that are still kick'n was nice to be able to do some upgrading with the extreemly low costs of nice machines in the last 4 yrs. Let alone the fact that there is another big sale comming up in Troy (Detroit) in a few weeks. (The tooling will still go high - butt he machines will likely still be fairly cheap).

While that is nice for cheap upgrading - at the same time it kills the value of our machines that we pd dearly for only a few yrs ealier. And at that has to be detrimental to new machine sales. (More on a general and CNC basis at this point - rather than the screw machines as they haven't really been building new ones much in the last 30 yrs anyhow...) and he mentioned that if you go bankrupt in the UK - that all of your assets were flat out destoyed.

This would certainly be a good thing in some aspects - but terrible in others. It certainly would put a halt to big Corps playing the game where they go bankrupt - just enough to stick it to the supplier - and continue on while spreading big bonuses acrost the top brass. (DANA just recently - and probably The Big Two also?)

I know that there is plenty of UK representation on this here site - so how much truth is there to this?

Think Snow Eh!
Ox

Ox

I know nothing, but I found a brief summary of the effects here:-

http://www.debtadvicebureau.org.uk/bankruptcy/main_effects.html

If that is the case, then you couldn't list machine tools as collateral on a loan, because what creditor in his right mind would loan money based upon assets that he knows would be destroyed in the event of default on the loan?

jointly-owned property (such as the family home) may be sold by the trustee to realise the value of the debtor's share...

Click to expand...

I had a close call with that provision, and it is no fun. Nothing like being held accountable for someone else's business decisions!

I kinda doubt this is true.
The main aim of bankruptcy law is to divvy up whatever is left among the creditors.
I can think of NO reason whatsover that anyone would benefit from destruction of assets.

The UK bankruptcy site linked above makes no mention of this- in fact, it talks over and over again about how your assets will be SOLD to benefit your creditors.

What if your assets are a nuclear power plant- will they destroy that? Or a TV station? Or a skyscraper in downtown London?

I think your guy had been playing the game of "telephone"- you know, information that got garbled in the transmission.

Bankruptcy in the UK is a killer. The guff about the creditors is BS. The official (called a reciever) grabs as much as possible, by sodding about while racking up a huge bill. The Preferential creditors, then get their share (national and local goverment, courts etc.). Then all the kit is sold off and the ordinary creditors get the peanuts that are left. Oh yes and the pension scheme money vapourises, the Goverment is threatening to sort this loophole out. The US chap 11 I think is a bit the other way gives too much leeway to bent managers but at least it keeps the firm as one unit so preserving the livelyhood of the employees. No I haven't gone bankrupt but I know of people have been through the process.
Frank