City Link Administration: New Scandals Emerge

By Parker Andrews

Every year, a large number of businesses face the risk of financial difficulty, and ultimately Administration. The surprise is often the size or prestige of the business currently facing struggles. One such example of this is the saga of City Link’s Administration, which began in December 2014. The BBC reported on Christmas Day over a year ago, that City Link, which at the time employed 2,727 people, had called in Administrators after reporting “substantial losses”. The RMT Union General Secretary, Mick Cash, told the BBC at the time “The way it’s happened…that on Christmas Day they’ve done this to our members is disgraceful.”

Over a year later, the saga has continued apace, with City Link still appearing in relevant news outlets. The news in recent weeks, has shed light on somewhat of a scandal. Reported in the early days of the year, it was revealed that City Link bosses took almost £350,000 out of the Company before its collapse. The Company’s accounts disclosed the payment Directors’ fees and expenses from City Link amounting to £345,141 – this was on top of £428,015 in fees that were claimed the previous year.

Mick Cash continued to comment on the story, “This is a corporate scandal that refuses to go away. With the management knowing that City Link was going under they encouraged drivers to work through Christmas Eve in the knowledge that they wouldn’t get paid while they were busy lining their own pockets. It’s another vicious kick in the teeth for the nearly 3,000 workers at City Link dumped on the stones.”

The new scandals emerging from this saga highlights the stark mismanagement of the Company. Our very own Nick Cusack said, “Company Directors often underestimate the knowledge and skill required to run a Company. They are also unaware of their judiciary duties and obligations under the law. It is imperative that any Director struggling to deal with corporate government issues, seek professional advice as soon as possible, if only to mitigate against their own personal liability exposure.”

If you would like to discuss our administration service, then get in touch with your local Parker Andrews office. You can call us on the corresponding number, or use our contact form.

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