Llangollen Railway

Exactly the point I keep finding myself having to explain to people. The debt was much closer to £850k! The £350k was purely the value that the LR were insolvent too.

So to look at the bigger picture, those societies who successfully won claims against the LR having had to expend further hard earned funds just to legally win their case, are still likely to be left with nothing. I have no links to the LR or the groups affected, but I do feel that we ought to be doing more to support those groups who have lost out significantly! The Morayshire and Patriot groups to name just two of the groups impacted, but no doubt there are others too.

 

I was not surprised at the values raised. As I’ve said before, I’ve noted several coaches sell for around £30k before and always fully expected these kind of prices to be paid for the Llangollen coaches. I’m surprised that people are surprised!

Also all the bidders must have decided before the auction what values they were willing to bid. The fact that so many bidders were prepared to bid over £30k indicates they knew this was the true value.

Even the auctioneers estimate was £20-£25k per coach, well above the sub £10k per coach the plc had recorded in its books.

 

The additional publicity around this sale will have raised the levels of interest, number of potential bidders and therefore price considerably, compared to the usual post on Facebook or railway website.

 

Perhaps, but that would have been offset by the flooding of the market with several coaches at once. Overall I’d suggest a negligible impact.

 

All will be revealed in time no doubt, but it may well be that some of the lots including coaches have been bought by supporters of the railway just to prevent them leaving Llangollen and that perhaps they don't really even want a coach but are buying to help the railway survive and that this inflated prices.

 

As I posted above, in line with standard accounting practice, the £10k does not and is not intended to reflect the market value of the assets.

It would be a strange set of directors who would make decisions purely based on the written down values rather than the replacement costs - although see the W SR thread for an example of a railway that seems to have closed its eyes to the difference.

 

Yes he is having a laugh, I think you’ve taken it too seriously!

 

Seriously though the point that you need different accounts to tell you different things is a valid one.

If I ran a business, I can understand that the accounts the tax man needs are not necessarily what I need to understand whats going on, or what the bank manager might want if she's going to lend me some money

 

Will that group's objectives (however unfortunate or laudable) in practice just be deferred by the shortfall, and be completed in 2n years rather than n? If I've already prioritised my support the group(s) I want to based on objective criteria or emotional attachment, should I diminish that support to fund a group that didn't make the cut just because it's suffered misfortune? One my inner self has wrestled with over the years, and not unique to the LR fallout.

Patrick

 

I'm not sure there were any court actions against the PLC, were there? (Those would be matters of public record, but I don't recall any being discussed here, which surely they would have been?) So that would have helped keep the legal bills down; the legal meters only really spin when 'billable hours' are being racked up. I gather that most of the back and forth over the 'problem' locos would have been private negotiations between the parties.

From the numbers above, it sounds as if enough was raised from the sales to pay off the bank loans (which were senior debt), leaving something to be shared out among the other creditors (although only pennies in the pound on what they were owed, of course).

Noel

 

Accounting not your field ? Fair enough, but accounts can be legitimately presented in different ways for different purposes, all within the rules and no frauds committed. This discussion of assets is a prime example. To take, say, one coach : It can be valued at the purchase price less depreciation (as allowed by the tax regime), or it can be valued at cost less a depreciation over its remaining estimated life - say 20 years - so 1/20th of original cost per year, or it could be revalued to current market price to reflect its present real value as an asset.
The important thing is to know which you are using for which purpose.

 

In judo terms, I think that's "Ippon" !

 

LR Trust Press Release issued today.

The auction of Llangollen Railway PLC’s assets was duly completed on Wednesday 12th May. The bidding was fast and furious on the day for the coaching assets in particular, and the larger plant items. The prices paid were substantially in excess of our expectations which is good news for the PLC’s administrators and we are glad all the creditors, including those who are unsecured, will benefit accordingly.

We were delighted to secure our priority one assets, namely one accessible-adapted coach, road railer, 12t crane and Lowmac. This would not have been possible without the support and dedication of our members and numerous other donors, and we thank them all. Total donations including the Rolling Stock Appeal are approximately £140,000 including gift aid. We were similarly delighted to learn that friendly bidders have acquired 2 further coaches and a significant amount of machine tools which will remain on the Railway.

Pete Edwards, chairman, said: “It was very important to secure the principal assets which will enable us to continue preparations for reopening without further interruption. The support we have received from so many donors, without which we may well not be able to look forward to running again this year, and the friendly bidders, has been crucial and is very much appreciated.

Numerous coach and plant items will be leaving the Railway which is a great shame from our point of view but at least their future in preservation is secured.”

Preparations can now begin in earnest to complete the necessary works on Dee Bridge and in the tunnel. We also need to press ahead with the necessary safety and regulatory matters.

“We are on target to reopen in late July or early August,” Pete Edwards concluded.

Both appeals remain open and we would welcome further support to help fund the higher prices we had to pay for the priority items and to provide the necessary working capital to get us up and running again. Please donate if you can: Online at https://llangollenrailway.enthuse.com and click the Donate button, or via our Facebook page. For taxpayers, the Railway can apply for 25% Gift Aid. Alternatively, supporters are invited to send cheques payable to Llangollen Railway Trust Ltd to The Station, Abbey Road, Llangollen LL20 8SN.

 

I'll remind my wife (ACA) that she should consider who the audience is before considering the valuation of an asset in the books. I may be gone some time while the explosion subsides and she responds to the idea that the underlying value of the company should be presented differently to different audiences.

 

If what I have read on social media is correct then the scrap man did get one thing from the auction. The 50t crane.

 

Looks like it went for about £26k. Plus buyers premium, plus transport costs. Is it really worth it to the scrap man?

 

Could they be using it as crane, rather than just scrap...

 

I think it went for £26,500, +16% buyers premium makes £30,740, +VAT makes £36,888. I can well imagine transport costs coming to over £10,000 so massive costs just for scrapping, would seem unlikely that there could be almost any profit in it. You do have to wonder if there isn't an alternative use in mind, however very sad if true.