West Somerset Railway General Discussion

Thanks for pointing that out you are right, my post was already long so I missed a step in the process out into Receivership. If a business becomes Insolvent a Director must act immediately, for example:

"As the director of an insolvent company you have certain legal responsibilities to any outstanding creditors of the business. Once a company becomes insolvent, you must put creditor interests first by ceasing to trade and safeguarding its assets. ; this must come above the interests of shareholders, members or directors. Operating responsibly is absolutely paramount from the moment you realise that your company is insolvent."

Once a Director has notified the Creditors and Ceased Trading immediately the Creditors call in the Receivers as you correctly state (there are a few other options as well before ceasing trading and after). Then the decision of 'close/sell/break up/keep going' is made by the Receivers on behalf of the Creditors not the Directors or Shareholders (shares now meaningless & worthless) who have lost control at this point. This is where the classic 'management buy outs' come from and of course the Directors could make a bid to buy the Company cheaply and give a return to the Creditors, the PLC Shareholders would likely get nothing. You then have a PLC in private hands and that opens all types of cans of worms regarding who is the WSR ??????

My point was its been indicated that the reason for not publishing accounts or holding an AGM is because this would identify that the business is Insolvent (not a going concern) so they were not going to do it. I was trying to say that a Director of any Business has to 'call it' at anytime if the business is Insolvent, not just wait to the AGM or Accounts publication. Legally they can't just carry on knowing that it is. The fact that the WSR is carrying on currently can surely only mean that at this moment it is Solvent assuming that the PLC Board have good legal advice ?

 

I agree that a company withholding information from creditors and shareholders would not make the problem go away and could exacerbate it if the directors could be shown to have been trading while insolvent. However, insolvency / inability to pay debts is not clear cut, as under s.124 of the Insolvency Act 1986 (assuming it has not been amended) other than the failure to pay a debt duly demanded in accordance with the process set out therein or failure to pay a judgement, the catch all "unable to pay its debts as they fall due" and the "value of assets being less than the liabilities" (the latter in any case being arguably an inappropriate test in many cases) are both determinations of the court i.e. they are not tested until put before a court so for most practical purposes are useless as an early indicator.

 

Absolutely agree with you 100% the definition is not easy and has nothing to do with how much money is in liquid/asset form. Any Director will have a difficult job to know when is the time. I was once asked as a part of my job to go in and see as a part of a team if a Company was insolvent or not and see if we should close it or keep going (the business I worked in at the time was its main Creditor).

We had a meeting with our people and the picture looked bad, however a well-qualified Accountant defined it to me as “do you see that this business can manage its way out of the situation in a realistic manner over a period of time ?"

In a theoretical situation even if the debts are high, there is no cash in the bank, the income is reducing and the costs are exceeding the income all might not be lost if the business put a recovery plan in place to change those things and move the business back into a tradeable position over a defined time period. So a business could still be defined as Solvent if all was bad but the plan is felt to be realistic. People have been asking here (including many Shareholders) where is the plan ?

 

I wonder if I may point out a few things simply to allay the concerns of WSRA members who read this thread.

So far in the last year or so the WSRA have:
Paid for the completion of the return to traffic of locomotive 9351 on the WSR at a cost of over £27,000 (a mixture of fundraising and spending reserves).
Contributed around £20,000 to the safety critical project to renew the locomotive loading point at Bishops Lydeard.
Raised approximately £40,000 towards the restoration of Locomotive 4561 which is now proceeding (gently) at Williton. (Estimates suggest we still need a lot more money but we are getting there.)
Raised in excess of £80,000 (including the gift aid) for the Rail Renewal Winter Works appeal and agreed in principle how this money will be spent in consultation with WSR plc.
Painted and varnished 4 of the fleet of Mk1's at an approximate cost of £20,000. I think we promised 5 and one is still to do as soon as Op's can release it.
Perhaps somewhat less tangibly the WSRA now leads again on volunteer recruitment and is investing significant resource and money in a programme to reinvigorate this on the WSR.
While I agree that there was a time in the past that the charity may well have stopped contributing in a meaningful way to the railway that time, I would respectfully suggest, is in the past.
We have also recently agreed with the WSR plc Chairman that the much loved, WSRA produced, WSR journal should become the main printed communication tool for volunteers and supporters.
I could write a much longer list of the host of smaller things that have been done and changes that have been put in place in the last year but I'll save those for a future Journal article perhaps.

Now then, is there still more that needs doing? - Yes there is.
Is there more that the WSRA may be able to do in the future? - yes there is and we are in discussion with WSR plc colleagues about how this can best be done.
Is it likely that the WSR, like all heritage railways in the UK will continue to need charitable support? Yes it is and it is also true that annual six figure sums are likely to be needed for years to come.

Edited to mention that there will, of course be opportunities to change the trustees by nominating new blood in advance of the 2020 AGM.

 

Presumably that's with paid staff? either that or you need a new paint supplier!

 

There was a level of volunteer input to the painting programme but there is also an element of internal cross charging, an element of overhead recovery and yes also an element of the use of paid staff.

 

I can't quite get my head round internally cross-charging for overheads but there we go, maybe it's just me. Shame I'm not a little closer, I'd love to lend a paint brush.

 

Not you, it is rather enigmatic. One assumes the £20k was not charged to the PLC as that rather reduces the potency of the contribution, nor that the 20k includes a costing of volunteer time. But I guess a similar issue arises to some extent on your own railway if the coaches are not owned by the plc i.e. who is actually ultimately paying for the work/materials?

 

We treat all coaches as our own regardless of ownership in terms of paying for materials as long as we can be assured the owner isn't going to take it away within a few years of us doing it up. Certainly if it was between our trust and Plc people would look at you funny if you said that because a certain carriage was owned by the trust then the costs of paint and lighting and heating the workshop should come out of a trust fund. Although actually, whilst the trust has purchased carriages before, I don't think they actually maintain ownership. I don't recall the DMU group paying for all the work we've done on their vehicles either, again that would just be weird, we are the C+W department for the railway, and the DMU vehicles are carriages (as far as we're concerned, we don't do engines) on the railway. I think they might have sent a big tin of chocolates as a thank you for doing a bit more than we originally agreed last time, but otherwise...?

 

Ah, the GWSR is a younger entity! You do not have three bodies for ever playing musical chairs blindfold!

 

This service stopped long before JJP was involved with the WSR, at least five years ago.

 

We've got lots of organisations, but for most purposes, we all just volunteer for "the railway", and if something needs doing, it gets done, by "the railway". I wonder how much time is wasted calculating how much electricity was used whilst a particular carriage was in a workshop then cross-charging it to another organisation within the railway.

I'm sorry I keep going on about it, I know it's not the first time, but it just seems so weird, I just can't get over it.

 

Couldn`t agree more, at least in the most part with your comments. The bizarre insinuations on this thread suggesting JJP`s commercial credentials are not fit for purpose are not helping in any way. Good grief, even the most cursory research would reveal very quickly that he operates a lucrative contract to supply Hinkley Point with up to 160 buses until 2025 in partnership with First Bus. That suggests very highly-developed business acumen. With respect to WSR`s future, he inherited a financial minefield when taking over his current role and has so far spent just 11 months trying to deal with it. It seems self-evident that he will have to curtail services significantly next year and will no doubt face a tidal wave of criticism then. The speculation over just why last years accounts are in limbo will be resolved in December. It is to be hoped then a strategic plan will be revealed that will link together and address many of the concerns that are, quite legitimately, raised on this thread, and perhaps reduce some of the pointless and often poisonous interpretations that appear here that reflect well on nobody.

 

Chocolate is very bad for you!!

 

Maybe so, but it's also very nice.


...and dark chocolate is supposed to be good for you.

 

If you had to choose between being eating chocolate every day or being skinny for the rest of your life,

would you choose milk, dark or white chocolate?

 

The Exmoor Explorer was a brilliant day out and certainly had the potential to expand by developing other itineries in partnership with the Railway. Martin Babb ran Blue Motors. He was a real character. One Sunday, many moons ago, the QB staff hired him and his Bedford OB for a day out to the South Devon to dine in their GWR Queen Mary saloon. Back then we used to have regular visits to other heritage railways to check out their dining offer. It was a most memorable and enjoyable day. Audrey Short wrote a lovely poem celebrating the day out and it got published in the WSR Journal. Happy days, long ago.

 

Seems to me to be a contradictions here.

When the auditors have refused to approve the last set of WSR PLC accounts, and the accounting period has been deliberately extended to take into account this years' trading in an attempt to negate the inherent 'insolvency' of the draft accounts as were, then I personally consider this to be a bit 'off' to say the least. The same firm are the 'Company Secretary' of the WSR PLC unless I am mistaken, and also have close links to JJP's bus empire as their accountants/auditors.

Transparency is required, not smelling a rat.

Cheers,
Julian

 

Not really, it seems blatantly obvious that some concerns can be legitimate and some can be bizarre insinuations.

Just because the same accountants are used in more than one business doesn't mean you have close links with them, and certainly not that there's anything underhand going on. You might as well say I have close links with Morrisons because I regularly do my shopping there.