Sounds the same as dodgy double glazing companies or dodgy building firms that go bust, but then open up the next day in their wife’s name and the people who got shafted can’t get their money back.

No, not quite like that ^.  There is a pretty comprehensive explanation of the situation in the documents filed at Companies House.

No, not quite like that ^.  There is a pretty comprehensive explanation of the situation in the documents filed at Companies House.

Can you break it down a bit better for people who can”t really grasp that sort of info… i just see a jumble of words in that sort of thing.

What a piss take….. I really feel for those who have been shafted while the ones who allowed the business, through their own actions and decisions, to get so far into debt get to just ‘have another bash’…….

I know it is all not so simple but it does leave a sour taste and discolours the brand. I mean 2.1 million quid?! How do you even get that far into debt before thinking ‘hang on, this is out of control, we ain’t never going to be able to pay that back’……. Say you make 300 quid on a frame, that’s 7000 frames just to pay the debt before running costs and all other outgoings…..

Just seems like bad business in, admittedly, a very tricky climate but it shouldn’t have been allowed to run so seemingly far out of control only then for the balance to be reset do you can try again while others get shafted.

Says me, with no particular knowledge of the ins and outs of the business/personal situations/anything.

Well I only skimmed through out of nosey interest and I have no great understanding of these matters but I read it as… There is one major investor who sees the company is in trouble.  The directors don’t agree on a way to continue and this investor takes the decision to cut their (eye watering to me) losses and the company is put into administration.  Dan didn’t want it to go that way and is now trying to retrieve the situation.  I assume he believes it can be done and I guess we’ll see in due course

What about the people who have outstanding orders from before the administration? Haven’t heard any commitments from Dan on honouring those orders. Guessing the new company has no legal obligation to fulfil them.

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What about the people who have outstanding orders from before the administration? Haven’t heard any commitments from Dan on honouring those orders. Guessing the new company has no legal obligation to fulfil them.

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I’d imagine that he’ll have to from business point of view.

I’d have thought that if he doesn’t and a load of customers get stiffed for the price of their frames, the poor PR from it will destroy his brand before he even gets it back up and going again.

I think this “new” company (Pmsl) will struggle. The brand name is heavily tarnished. He’s done it once;  he’ll do it again… Maybe.

Suddenly, Giant’s warranty seems a safer bet.

If this was a builder/a certain ill bicycle company, this thread would be very different. Apply your standards unilaterally people.

If this was a bigger company, or in another sector there would be a collective intake of breath and general condemnation. However, in Tesla-woodstove-£7k bike-but leftwing-really trackworld the only person seemingly losing out was a £1m investor so we don’t need to give a shit about him.

If this was a builder/a certain ill bicycle company, this thread would be very different

Because the situation is totally different?

What about the people who have outstanding orders from before the administration?

I don’t know but if I were in their situation I’d be looking for any way to recover any money paid be that credit card co, paypal or whatever.  I know that just means someone else taking the hit but..

If this was a bigger company, or in another sector there would be a collective intake of breath and general condemnation

It’s a shit situation but I suppose I’m a little more sympathetic because it feels like someone trying very hard to make it work with no intention of callously writing off a load of debt.  It really does look like some serious mismanagement though, hell of a debt to rack up on comparatively modest turnover

Was the investor trying to extract his investment not the issue that broke Stanton? I may be thinking of another story but this is the story that I remember.  I can’t imagine that it could be considered a short term investment to put money into a fairly niche, low volume, (mainly) domestically produced bike brand.

t feels like someone trying very hard to make it work with no intention of callously writing off a load of debt.

Absolutely agree.. I don’t think there’s anything maliscious going on by Dan from what i’ve read, heard etc about him over the years.

Was the investor trying to extract his investment not the issue that broke Stanton?

Have you read the documents at Companies House?  I read it more as the investor knew he wouldn’t be getting his money back but the company was insolvent and couldn’t agree on a way to continue.  Administrators were called in, game over.

Was the investor trying to extract his investment not the issue that broke Stanton?

I’m not familiar with the specific case but usually its when the investors* refuse to invest more, billls then can’t be paid and the company fails.

*investor at this point is a loose term, they’re not putting money in hoping to grow it but rather to stem loss and recoup as much of their previous as possible.

I read it more as the investor knew he wouldn’t be getting his money back but the company was insolvent and couldn’t agree on a way to continue.

Would fit that, as to whether borrowing more to pay your bills is malicious, up to the reader.

Not saying this is the case and Dan can come on an explain here if not.  But that’s how phoenix companies operate – build up a lot of losses, fold, buy back the assets at pennies in the pound, ditch suppliers and customers who ordered, start again with no debt, having extracted maximum value for yourself.

My very well to do brother in law reckons half of the houses in his very well to do area are owned by people who did that – phoenix companies where the director-owners still took mahoosive dividends to set themselves and their families up very nicely, thankyouverymuch.   Much hand-wringing etc (“I didn’t forsee this, didn’t mean it to happen, very sorry, tried everything we could”) but ultimately, companies exist to enrich their owners.

I don’t doubt that sometimes there could be legitimate circumstances (including having no idea how to run an actual business).   But phoenix companies are so normal that this isn’t really anything other than a de-facto business model in itself.   Make some money, ditch creditors, get legal protection and then get all your assets back, rebadge, restart.

Again, not saying this is the case here – just responding to the above.

I must admit that it leaves a bad taste in the mouth when any company, can go into administration and come out again having written off the debt they had. I dont know anything of the circumstance in this instance but some one is loosing out when the debt is written off. If thats the investor then I have less sympathy as they are taking a risk when investing and have to accept the losses aswell as the gains that come with investors. Its customer and suppliers who entered into straightforward supply contracts and wont get paid or their product I feel sorry for

If this was a builder/a certain ill bicycle company, this thread would be very different. Apply your standards unilaterally people.

Very different situation. Sick were just ripping people off left, right and centre. As much as this isn’t pleasant, it appears that the appropriate processes have been followed.

Regardless of whether Dan is a nice guy or not he, as director and owner, had the moral responsibility to utilise the funds invested, the money paid by buyers and the advance products from suppliers to further profit the company and make returns in product and revenue……

Instead he got 2.1 million in debt and then, seemingly, wrote it all off, washed his hands and picked up a ready made, debt free business for probably nothing while everyone else got shafted.</span>

Or have I got this wrong? As mentioned above, leaves a pretty nasty taste.

An investor putting millions into a company rarely says “There you go lad, don’t spend it all on coke and hookers. Just give me a call when you’ve doubled my investment”.

They are very much involved in the decision making and direction of the company. And if they weren’t they were bloody fools.

I can easily see how it could have happened “in good faith” rather than malice – the “Hanlon’s razor” defence. Dan may have seen the investor cash as a way to grow the business in premises, tooling, staff etc and may have seen it a bottomless pit that would be recouped when the brand was sold on a la Santa Cruz or YT. and he just got it wrong in the middle somewhere.  Easy to see how you could burn a few quid developing and productionising the the Ti full sus frame in the UK.

Easy to see how you could burn a few quid developing and productionising the the Ti full sus frame in the UK. vanity projects with no market

FTFY

dangeourbrain

vanity projects with no market

Yeah but . . . what a thing! Loved it first time I saw one at the Malverns.  If I’d have had the money . . . etc.

I used to run a record label, invested in a few bands, some of the cash made from the bigger ones funded the releases by the smaller ones. Knew I was never going to make it big but enjoyed giving the little guys a chance I never had in my band. Had some brilliant releases and some fun times. Took a big (not £2m big) hit when two of the 20 or so I dealt with screwed me over. I folded the label a month later cancelling some of the deals I was already working on which killed off one of the bands.

The investor might not have been in it to make it big, just helping someone out who they had (misplaced) faith in. <span style=”font-size: 0.8rem;”>The cash the investor lost this time is cash they won’t be investing in my startup bike brand, your growing flowerpot business or someone else’s woodburner removal business. </span>

<span style=”font-size: 0.8rem;”>Whoever has given him the cash to start again is in my opinion a fool or is going to want something big down the line. </span>

Someone needs to invest in the formatting of this bloody forum.

Official update from Dan:

Exclusive Update From Stanton Bicycles: The Recovery Begins

OK, the situation re. creditors etc. does seem a lot better than I expected.

Hannah – I really appreciate you putting the hard questions to Dan right upfront.

So basically exactly what was said a day or two ago if you bothered to look rather than making stuff up.

The question of people waiting on stuff was also answered months ago, again all there if people actually bothered to get their facts straight.

Since some have asked and I wondered too … summary of the debts from here

(where named…I am not an insolvency practitioner, and there seem to be two similar but not identical lists)

Employee hol pay : £800.
HMRC: £92K
Trade: £370K
Dan Stanton: £120K
Atkinsons (the recent investor/s presumably): £1.05M
10 Customers: £33K
Paypal: £73K
You Lend (who?): £40K
Redundancy/pay arrears: £60K.
TNT: 43K

Trade seems to be a Taiwanese and a Chinese supplier (bulk of it) plus various UK distros.

Always amazes me that businesses run up so much debt, even without the investor pulling the plug it’s not a position I’d like my business to be in.

A brave move by the UK manufacturing, let’s hope things can get back to that and a solid steady business for all the staff.