Planet X – In Administration

The US? Mainly because of our 20% VAT vs their much lower sales tax, which is 0% in some states

RRP on a Megatower here is £6349

Santa Cruz Megatower Carbon C – S Kit

In the US, $5899 which is £4753

https://www.jensonusa.com/SANTA-CRUZ-MEGATOWER-2-C-S-BIKE-12

UK retailers have to charge VAT so not their fault. Still, the VAT adjusted price is therefore very close despite an additional intermediary and cost centre (the UK importer).
We were talking about parts anyway.

In the TT / Tri world, 10-12 years ago, a PX Stealth was seen everywhere, and PX would have a stand at big events.

It’s more like 15-18 years ago now, IIRC Cadel Evans rode a repainted one for a couple of seasons (07/08 maybe), inc a TdF win, while his bike sponsor (Ridley IIRC?) was sorting stuff out for him.

Not bad for a £1k frame.

The issue here is – why is a brand new company, with supposedly no ties to a bankrupt old company paying money to some suppliers of Oldco? If the relationship is completely new and arms length, what could those payments possibly be for? Etc

…because why would a supplier extend credit to a NewCo with no credit history and wobbly management otherwise? Those payments don’t make the position of other suppliers of OldCo any worse off.

^^^

Yeah, but if those payments just happen to match the value of oldco’s trade debt…?

It was sort of a rhetorical question, TBH.

Pointless to witter on about newco/oldco in the context of PX as none of the few people who really know what’s happening are talking.

I hope if there is a new owner they fix the image zoom bug that’s been a ‘feature’ for donkeys years.

Click photo for bigger image… and the image gets smaller! 🙂

Pointless to witter on about newco/oldco in the context of PX as none of the few people who really know what’s happening are talking.

Agreed, although ‘witter’ is a bit argumentative. I suspect deliberately so, but life is too short to guess at people’s motivations.

I only mentioned it in the first place because of people asking questions around ‘usual random sales’ and other context.

Clearly PX won’t be the same as the one I experienced because they don’t have tens of onerous leases on retail parks.

I won’t witter any more on this – unless I think I can provide an answer to a question.

Planet-X aside, there’s no mention above of the prime driver of a great many company insolvencies and what is by far and away the greatest loser in these situations; the exchequer. The last in line creditor is always the state now that the preferred creditor legislation has been removed by successive governments, only interested in the lobbying of self serving business owners. Phoenixism is a major problem and always creates victims while advisers and owners make a killing.
So, companies fold and tax is lost. Time and time again, the directors and shareholders walk away with what is effectively the value they have acquired at the expense of the public purse. Corporation tax, VAT, PAYE & NICs all lost while supply chain relationships are protected and the little guys, as above, get shafted too. The legislation is framed in such a way as to facilitate this, not discourage it. Grrr…

…because why would a supplier extend credit to a NewCo with no credit history and wobbly management otherwise? Those payments don’t make the position of other suppliers of OldCo any worse off.

Thats basically often the deal – you have some suppliers you need/want, some you’re happy to burn, and the tax man. You agree to the suppliers you like to make payments outside of your actual supply agreement in order to settle the debts you ran up (while managing old co) and you burn everyone else. Worth noting that this comment has no bearing / relationship to whats happening at Planet X, only that Ive seen it before.

^^^^

Indeed. But the point (but often pretence) of an administration is that there is no legal connection between oldco and newco – otherwise the suppliers who have been burned could come after newco if it makes some profit.

For newco to then, effectively, settle oldco’s debts for suppliers it needs and not others is extremely iffy IMO.

However, another flipside is that Newco can provide employment rather than getting rid of everyone. After they have been TUPE’d across and often lost out on some benefits and pensions.

It is a messy area that often relies on the pretence of one thing ending cleanly and another thing starting cleanly – a contradiction in terms.

So, companies fold and tax is lost. Time and time again, the directors and shareholders walk away with what is effectively the value they have acquired at the expense of the public purse.

Yep – was going to say something similar – there’s a local garage that seems to do this every few years, different directors but the same people in control, major creditor always HMRC. Once you can perhaps forgive, but when it becomes a pattern you’d think HMRC would also take notice.

Based on what’s been said above though I’d doubt it’s the case here, more likely the lendors and suppliers have called time.

It didn’t end at all well for Moore Large, but hopefully Planet X can return minus the tat and confused brand/model mix, as they definitely sold some gems. Oddly in the Moore Large case their John Pye auction stock liquidation seemed to get pretty solid prices – most of what I looked at seemed to go for >50% RRP before JP+VAT’s 30%, so probably not too far off trade price for them in essence. Seemed to me that if they could have disposed of the stock at those prices before calling the receivers in they may have survived. Similar situation in many ways as I think that was an MBO a few years ago. (And although Moore Large were definitely more at the BSO end of the spectrum, they had some gems in the line up too – their CX stuff was decent in particular).

However, another flipside is that Newco can provide employment rather than getting rid of everyone. After they have been TUPE’d across and often lost out on some benefits and pensions.

True – although so often you see “X jobs saved at Y” headline conveniently not mentioning the creditors left out of pocket.

True – although so often you see “X jobs saved at Y” headline conveniently not mentioning the creditors left out of pocket.

That’s particularly prevalent when the company in question is a major(ish) local employer. It is not uncommon for political pressure to be brought to bear in the case of bigger administrations.

But that is general. Let’s hope PX can extricate themselves from this mess with a slimmed down offering. They did good work around acquiring the spare frames that resulted from the Sick! Bikes fiasco – so hopefully a bit of karma? Although, I understand they pee’d a lot of customers off over the years, I never had an issue with them.

I had a flat bar Uncle John when commuting in Switzerland which was brilliant to ride – tough as nails and weatherproof.
The only customer-related issue i had was when the back wheel of my newly bought Tempest fell apart and no ones was answering the phones, so i drove up to Rotherham (round trip 400 miles) and asked them to fix it and they replaced the bike. Been great ever since.

You agree to the suppliers you like to make payments outside of your actual supply agreement in order to settle the debts you ran up (while managing old co) and you burn everyone else.

It doesn’t burn anyone else. The money for NewCo to buy the confidence of suppliers is new money – it’s not reducing the assets of OldCo. NewCo paying this key money to restart the business doesn’t make OldCo any more or less ****.

Moaning about phoenixing in the context of a company owned by an employee ownership trust just isn’t called for.

Moaning about phoenixing in the context of a company owned by an employee ownership trust just isn’t called for.

Unless you’re one of the suppliers ‘burned’ whilst a stock supplier ends up not out of pocket, of course.

There are always losers in an administration because 99 times out of 100 the administration is because the company can’t pay money it owes to someone.

Oh, and it absolutely cannot be phrased as ‘restarting’. That implies it is a continuation of Oldco and Oldco owes money.

The nasty taste is caused by the idea that a company can walk away from its debts then reappear five minutes later having shafted a selection of its creditors. That is why the pretence that Newco is a totally different entity to Oldco.

The majority of those owed will (or, should) have credit insurance so, whilst not ideal, they won’t be losing all their money.

Planet x and on one haven’t gone yet, they may still survive.

Oh, and it absolutely cannot be phrased as ‘restarting’. That implies it is a continuation of Oldco and Oldco owes money.

You are confusing the business and the company. The business carries on. The company dies.

Planet x and on one haven’t gone yet, they may still survive.

Hopefully.

I’ve just put in a decent sized order for all the good value clothing I like, to have a stock in case they do go under.

Never had any problems with planet-x.

With the warehouse, staff, and possibly some vans, they could have diversified into house clearances, etc?

You are confusing the business and the company. The business carries on. The company dies.

Define ‘the business’ in this context, please.

There is only ‘the company’ from a legal perspective.

I don’t really want to turn this into a side show, but I have been through administrations and takeovers.

The business is the activity, the company is merely a vessel for it.

I don’t think it will be edifying for anyone for two pseudonymous posters to get into appeals to authority on this.

The nasty taste is caused by the idea that a company can walk away from its debts then reappear five minutes later having shafted a selection of its creditors.

If you’re that bothered, write to your MP – this is legislation enacted by (various) Govts.

Moaning about phoenixing in the context of a company owned by an employee ownership trust just isn’t called for.

Quoting someone while conveniently leaving out the next sentence where it’s stated that the comment isn’t made in the context of the company owned by an employee ownership trust isn’t called for.

If you’re that bothered, write to your MP – this is legislation enacted by (various) Govts.

I’m not that bothered, but it still isn’t great.

The legislation is, basically to preserve jobs as a headline by allowing a certain amount of can kicking. There will always be pain – this is about the dishing out of that pain.

In many cases, the jobs that are preserved are degraded vs the original as employees need to TUPE if there is a change of company. It gets really messy and nasty if there are defined benefit pension schemes knocking about.

The unfairness of the prepack/phoenix administration is that the creditors who get shafted are the ones that aren’t absolutely vital to the NewCo. These tend to be the small ones – shopfitters being the prime example in the one I went through. Sure, their loss was probably in the tens rather than hundreds of thousands, but that would be a massive hit in relative terms. Meanwhile the stock suppliers (no stock = no newco), were seen right by Newco.

Anyway – PX won’t be to do with over-extending itself site-wise with onerous leases. It is going to be, largely, sales and stock related, I would think – presumably with HMRC as a major creditor.

Let’s hope PX can re-emerge. As I said above, they have mostly been excellent for me. Please just no more weird shaped helmets or bikes where the seat/top tube brace is longer than it is high(!) 🤢

Quoting someone while conveniently leaving out the next sentence where it’s stated that the comment isn’t made in the context of the company owned by an employee ownership trust isn’t called for.

Selective quoting is a bit of a stock in trade on STW – a lot of folk seem to be here just for the lolz. 🤷‍♂️

Guys I was about to send some returns to P-X

Utterly pointless I guess?

Tricky one – send it back and take a punt or hang on until the dust settles and risk missing out.

Returns really is a tricky area. If you return goods, do you just become another creditor and join the queue? Not 100% sure on that one TBH.

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Guys I was about to send some returns to P-X

Utterly pointless I guess?

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If you paid by credit card, and return under distance selling regs, maybe section 75 applies? (if it’s >£100) ie the CC company might sort you out.

https://www.moneysavingexpert.com/reclaim/section75-protect-your-purchases/

says it applies if you “Bought something on credit from a seller that’s gone bust.” … which still leaves some questions as to whether that applies here, but it might I suppose. Call your CC company.

If not I’d be amazed if you get anything from PX.

If not I’d be amazed if you get anything from PX.

if they’re in administration, it’s not their money any more to return – so, yeah 🤷‍♂️

Strike off action has been discontinued – see companies house website.
As is usual, there is no further/supporting information in the public domain.

Wow!

@stwhannah Anyone picked up the phone yet?

I will miss their socks
And it was an Inbred 456 that got me back into mountain biking.
Sad to see them go – and the jobs associated

Strike off action has been discontinued – see companies house website.
As is usual, there is no further/supporting information in the public domain.

Strike off action was due to them not filing a confirmation statement. That had nothing to do with the administration process.

It’s this you should be looking at – https://caseboard.io/cases/7c9cda66-5c6e-42bc-ac84-06b024a9216f

@BruceWee no one except Brant 🙂
It’s all tumbleweed out there.