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George White in Administration

20 January 2012

George White, one of the largest motorcycle dealerships, has gone into administration it has been confirmed today.  The administrators are Richard Hawes and Robin Allen, of accountants Deloitte.  61 redundancies have been made.  The company was established 50 years ago and had a turnover of £25m.  Its main site was in Swindon but it also had sites in Bolton, Donnington, Plymouth and Slough.

Making employees redundant is always difficult in any circumstances.  However, sometimes job cuts are the only thing that can save a business and stop it going into administration or liquidation where more jobs are lost.  Many directors worry that  if their business is struggling they cannot actually afford to make redundancies as it would hit cashflow harder.  It is important to understand that employees who are made redundant in the event of insolvency are entitled to compensation from the government.  The claim is up to £400 pw of statutory redundancy.   Compensation is triggered by a "qualifying insolvency event"  This actually includes a company voluntary arrangement (CVA) as well as administration or liquidation.  This is an important benefit of the CVA mechanism.  A CVA is not as public an insolvency event as administration or liquidation and it will give the business a fighting chance of survival.  But you need to face up to the problems early and take advice.

With so many retailers going into administration these last couple of weeks one cannot help thinking that perhaps some of them could have been saved earlier.

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