Originally published at: https://boingboing.net/2019/09/25/externalizers-r-us.html
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“Other countries do it as a matter of course. We should do it in the UK.”
“Should” is such a tricky word.
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Uh, it was publicly traded. Loading up a publicly traded company with debt is different than what is done with private equity, where the business and the books are private.
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This is like the world’s shittiest game of “Clue”, where the perp, murder scene, and weapon are always the same:
”It was Private Equity. In the boardroom. With a leveraged buyout.”
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Let me fix that headline for you.
Thomas Cook travel collapsed and stranded 150,000 passengers, after paying millions to the execs who tanked it.
They did not “still” have millions for execs after it collapsed, which the headline would have you believe.
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Capitalism!
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Also, what I never get, every time this happens, is why other planes need chartering to bring people home.
TC has its own planes and crews. I get that it is technically in administration, but even so why not pay TC crews and use TC planes rather than enrich third party plane leasers / crews, etc? Reduces losses at travel firm (even if trivially), pays staff for a few days more, so why not find a way to do it like this?
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Regardless, when the C-suite undertakes a series of maneuvers that transfers all the clean-up costs of corporate death to the public purse, the corporate veil should be pierced and executives made liable for repaying such costs. Perhaps this will help balance incentives against such fool-hardy financialization.
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Especially when you consider that those stranded passengers are some of the creditors owed money. They have a contract with the company that the company is not honoring.
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I agree in general, but there is no evidence of that, specifically, at present, here. TC was simply loaded with too much debt. Other short term factors contributed, but a firm with sounder finances would have weathered those storms for much longer, though the internet, AirBnB and low cost airlines would probably have done for it eventually. But if it had not had to pay so much interest on the debt it might have had chance to evolve and survive. The scandal is so much being paid to execs when debt reduction was ignored. This sheds more light:
To be accurate
Almost all of TC’s planes were leased. Once they went into administration they probably lost the right to keep operating those planes.
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Could be. On the other hand, one more lease payment is worth more than none.
I dunno. I don’t think I’d want to be flying home on a plane where the entire flight crew just found they’d all been laid off.
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AFAIK, due to Boeing’s problems with the 737 MAX, some airlines are a bit short on airplanes, so there probably is more money in leasing to them ASAP.
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On the contrary. The videos of TC staff’s reaction and clear dedication to their customers has been moving, if not inspirational. Some staff in resorts have been undertaking duties to help clients, even after being sacked and with no hope of getting further pay. TC is a very long-established firm with with very loyal staff, in the main.
BTW I did not enter this thread to end up looking like counsel for the defence (of TC) but most of my replies so far start to look like just that. But I’ve been following the story (well, apart from Boris Fuck-up and the spider lady, it’s been most of the rest of the news this week, here) and a few suppositions appearing here are a bit wide of the mark - true in general, where end-stage capitalism is concerned, but not all cases are the same.
Yes, the execs were venal shits who took too much personally (thrust on them by compliant/supine board members, no doubt), although one of them did allegedly do some stuff to improve if not save the business a while back; nevertheless the board did not focus on the over-indebtedness and the risks in having to service such high interest payments if headwinds got a bit too strong, when all the signs were that they would not quieten soon. It’s been noted over recent years in newspaper business sections that this was a risk. The ‘human interest’ stories of TC staff and their reactions have been a little different to many such company failures.
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Good point. I do seem to recall reading that the CAA thought it might have difficulty finding planes. But the CAA was quietly preparing some time ago.
Sorry, yet another Guardian story, this one on the background to how the CAA’s rescue operation was put together.
(As you can tell, I’ve been following this quite closely.)
Passengers are creditors, but they are unsecured creditors. Secured creditors (those who don’t just have a contractual right , but who have a lien or charge against the debtor’s assets to support that obligation) have a higher priority and probably need to consent to anything that’s done for the benefit of the unsecured creditors.
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And of course they will be held accountable. /ssssssssssssssssssssssssSSSSSSSSSSSSSSSSSSS
