FE's demise comes down to one basic thing - chronic mismanagement at senior level. Additional factors such as diversification from core business, free-spending executives, outgoings exceeding incomings, unable to pay suppliers, poor service, etc. have been prevalent for over a year.
Pulling out of the Stanley shirt sponsorship, stopping paying suppliers last August to enable the Harwood Bar garage to open on 01 Sep, judgements aplenty against the company for non-payment of invoices/debts are just a few examples of how long this has been on the cards (no pun intended).
FE knew this was coming for several months - they 'restructured' (i.e. closed) some of their 'Group' companies last Autumn WITHOUT telling suppliers, and have been effectively trading insolvent for some time.
FE used several excuses for not paying suppliers, ranging from not being paid by their clients to overhauling their order book, to bringing in new 'processes'. The only way suppliers have been paid is either through the courts, or leveraging assets, such as 'donating' a coach to a creditor.
The Observer must have done well to track down Mr Dean (perhaps he was with Allan Stanford) as he's taken to spending most of his time in Malta - as some of the other directors have, or at least relocated to 'shell companies' say in their new London offices.
Whilst not quite being on the scale of Enron, there's a distinct lack of corporate governance by the Directors for this sorry mess - and that's putting it lightly. FE have sent several suppliers 'down the river' from early last year, but that didn't restrict their corporate entertainments bill - days at Henley, UEFA Cup Final, boxes at Ewood, Turf, Old Trafford to name but a few - during this so called 'economic downturn'.
Even the staff in Malta aren't immune from FE's lack of money, having to go unpaid at times last year. Whilst it's a sorry state of affairs for the present workforce, the writing's been on the wall and many have already left the company.
Let's call a spade a spade here - the only way FE are victims of the credit crunch is that their lines of credit have been withdrawn, and this is only because the company/group was trading insolvent for some time. The rail replacement contracts aren't a victim of increased competition - FE rely on third-party suppliers to delivery their services on turnkey contracts.
However, if a company does not pay it's suppliers, then it's usually the case that said suppliers will put them on 'stop', which means an inability to deliver a service.
Perhaps if FE had managed their operations, their suppliers, and their finances correctly, this situation may have been avoided.
Originally posted by Selphie
There's a lot of indie films out there that you probably wouldn't expect to be indie.If you need explosions constantly to be entertained, then that's just sad. srug