"Holding company" does this sound suspicious?

[dj9928]

My last working day was Friday 16th December 2011, The day I returned to work after the Christmas holidays 4th January the company was made insolvent and we got made redundant. Looking at the site CDREX.COM on the 16th December all the directors got appointed to this new holdings company. I have to wonder did something funny go on? I remember very well the last day of work, there was a funny rush/panic that went on to get stock/orders etc out the door.

 

Then on the 10th January a new company was set up, employees all rehired well bar me, same customers etc, the only thing different is a new company name and a new director, the former directors have not been appointed yet but I imagine its only a matter of time.

 

At the moment the redundancy payments service has decided to investigate this so there is a delay on my redundancy payment, does this all sound suspicious?

[honeybee13]

Hello there.

 

It does sound a bit fishy, yes, but it isn't always easy to do something about it. What type of company is it, if you're able to tell us?

 

My best, HB

[dj9928]

It was a kitchen manufacturing business.

[dj9928]

After a bit of digging it seems a holdings company is set up to hold assets of a trading business, so if the trading part goes but they dont lose assets, hence why all switched over on the 16th. Pretty smart thinking really. I wonder would this effect the redundancy people paying me?

[becky2585]

The question here is when was the other company set up, when did the assets transfer, and when did the directors move to the new company? Was this before or after you were made redundant?

[dj9928]

Going by what I can find on line the Holdings company was set up in November 2010, You got certificate of incorporation etc, about that time the company entered an IVA however the directors and secretary weren't added until the 16th December 2011 the last working day of the old company / trading company. We got made redundant on 4th Jan, new company incorporated on 10th with a former worker as the director but I bet these other guys get added to the director list shortly.

[numbers666]

Hi,

 

Holding Company / Trading is pretty normal.

 

HOLD1 (eg property / machinery / assets )

| |

TRADE CO 1 TRADE CO 2 (trading p n l / employees / tax / etc)

 

Trade 1 or 2 holds the employees and products made by renting the equipment from HOLD1.

 

Trade 1 suffers a bad spell trading and folds with debt...... employees redundant

 

Trade 2 takes over as trade 1 goes under - employees rehired - Trade 2 rents off HOLD 1.

 

Good method as Trade CO's have no assets / they belong to HOLD 1.

 

Hope this helps

 

N

[dj9928]

Very good explanation, so at that rate a company could just keep switching back and forth when need be, if things get bad just fold and start up again.

[assisted blonde]

Yes thats right I deal with holding comnpanies all the time and they are a real pain

[dj9928]

Yes thats right I deal with holding comnpanies all the time and they are a real pain

 

Would such a thing bugger up redundancy payments from the redundancy payment service do you know?

[numbers666]

No.

 

What you can claim

 

You can claim for all your outstanding pay from the insolvency practitioner. There is no guarantee that the full amount you are owed will be paid as this depends on whether enough funds are raised from the sale of your employer’s assets.

Some debts, including holiday pay and wages, will be 'preferential debt' when your employer’s assets are shared out. This means they must be paid before certain other debts.

As full payment cannot be guaranteed, there are special arrangements for employees to claim the basic minimum of debts owed to them from the National Insurance Fund. These claims are:

 

• redundancy
  
• wages - up to a maximum of eight weeks
  
• holiday pay - up to a maximum of six weeks
  
• compensatory notice pay - one week after one calendar month's service rising to one week per year of service up to a maximum of 12 weeks (new earnings will be taken into account)
  

There is a limit of £400 a week (£430 a week from 1 February 2012) on the amount you can claim for your weekly pay.