Companies that phoenix!

[John Robson]

What do you think about companies that phoenix? I understand that companies sometimes go bust for reasons beyond their control especially in the current climate, but what are your views on companies that do this regularly? What about the suppliers who've lost money and what does this do to our industry's reputation? Should we have a collective response? Obviously there are two sides to the issue. Any thoughts are welcome.

[Richard Boyd]

As the old saying goes anyone can make a mistake once but to make the same mistake on a number of occasions is either stupid or as I think your point is alluded to, criminal.

The problem is that once someone sees how easy it is to do and if they have a certain type of mentality, they will act in this manner. However, the Internet is a powerful tool in terms of naming and shaming and a quick bit of research usually uncovers any problems.

[Nick Grecian]

Hi John, I can imiagine what has prompted this discussion! Personally, it is something that has always wound me up. Yes, there are times when unfortunate circumstances dictate that a company goes down - that's sad enough. However, you also get serial phoenixers.

In a previous life, I was a Commercial Credit Manager in the IT industry where it was even more frequent. The story was pretty well the same - guys who, at best, were incompetent businessmen or at worst, corrupt. They have little regard for their suppliers or the grief and problems that they leave in their wake. In that industry, many of us talked and shut out these individuals. I think it should be the same in our industry here.

[Anna Anson]

I think that this is causing great disruption in our industry and as the current economic climate hits hard the situation will only get worse resulting in losses for suppliers and lack of service and supply to organisers and exhibitors. In the end it costs everyone money except those involved in phoenixing their company(s) and I can see no real upside for most involved... how many times can you have to phoenix a company and keep its reputation in tact?

[Peder Berg]

Serial phoenixers should be named and shamed. The trail of debt to both their suppliers and most often, their staff is unforgivable. To all I say, pick your friends and pick your business partners and suppliers wisely.

[Arran Coole]

I agree that we should share data on this, the trouble is we have to be very exact to avoid legal issues. I've had a case before not so much of a pheonix but a start-up that went bust. When we requested the wind down accounts as we always do we found out that the director had paid himself over £100K during the start-up year, personally I don't think that's acceptable but it's legal!

On the other hand we could create a list of directors involved with bankrupts and insist on cash up front, that protects us and would show us that the indivual had serious financial backing now.

[Mervyn Ramsay]

I agree with all the above and would also ask why is it if companies know that a company has phoenixed that they continue to use their services after they have left a mess in their wake? Maybe they don't or chose to ignore it? Answers on a postcard...................

[Nick Grecian]

It's simply down to money, Mervyn. They will continue to quote bottom dollar and buy business. For many people, money is louder than principle.

[John Robson]

Well put Nick. The way I look at it, these companies use their suppliers money to subsidise their bottom dollar pricing and whilst there is demand the cycle perpetuates.

Obviously it's the purchasers prerogative as to whom they spend their money with. However, the purchaser often doesn't realise that they are dealing with a new company, and that's the thing I find most offensive. These companies make every effort that the law permits to disguise the fact that they are a different company by using a very similar name or acronym.

[Arran Coole]

Or in the case of one web company I know, spend a fortune in developing your code, go bankrupt, set-up new company, install back-up CD result: debt free company with years worth of development. Market claiming years of happy clients!

[David Bulley]

Phoenixing drives me up the wall. There but for the grace of God go all of us, but to do this over and over again, whilst pretending to be a straight up business is plain wrong. Surely customers and suppliers must give these companies a wide berth.

Think about all the freelancers, staff and suppliers who get left in the lurch when this happens - this is definitely NOT victimless behaviour. In our industry the vast majority of people who get burned are individuals and small companies.

Why do people wonder how these companies can price things so cheaply?

[Paul Grecian]

I can only believe that this reflects badly on our industry as a whole and shows that a significant number of companies and the people that run them have yet to grow up commercially. Although I'm not only talking about the phoenixers! A lot of their clients will be shaking their heads and muttering about what dreadful conduct this is and then be at the front of the queue to accept another suicidally low quote for some second rate kit. The pity of it is that unless we can bring these activities to a halt as 2012 approaches and greater international scrutiny is paid to the UK events industry, a lot of us could damned by any association with these bloody charlatans no matter how vague. There are supplier companies still trading out there who will only deal on a cash basis because their bank will not let them draw against any cheques that are cashed and the market still accepts that trade! I had to chuckle at the suggestion in the trade press that PSL were defrauded by an ex FD. Oh please!

[Matt Sims]

Phoenix Specialists Limited!