Update: 7/02/2012 Andrew Nichols and John Butler of Driffield-based licensed insolvency practitioners Redman Nichols Butler were appointed administrators of Discovery Store on January 27, according to documents seen by the Yorkshire Post.
I have been receiving emails from people in relation to a firm that operates gadget shops called The Discovery Store Limited. A number of people have complained that the staff have not been paid as the firm has said that it is going into administration and they should claim their money from the government. It is true that in the event of insolvency unpaid wages can be claimed from the national insurance fund. For more details please see our page on redundant employees However, my research so far has not indicated that it has gone into a formal insolvency procedure and so no claim can be made. If the firm is compulsory wound up then a claim can be made, however this may be some months away. The firm has had a couple of CCJ's against it but that is all.
If the business owes money to HMRC or trade creditors they may petition to wind the company up. Employees may try and get an employment tribunal to award them their pay. If the firm subsequently goes insolvent then any award will have to be recovered from the remaining assets if any.
The firm says it has 20 stores but lists only 5 as it appears that some are being closed down after the Christmas trading period. So what, if anything, wrong has been done.
Has the firm been trading wrongfully? This is difficult to ascertain but they need to have been willfully piling up debt knowing that there was no chance of paying the creditors for this to be the case. It could be argued that they are closing down stores to avoid exactly that.
To see what the staff have been saying, read this