News - Microdirect said to have gone bust

[jazzsaxman]

Here is a copy of the email sent to me 22/07/11. The email address used is still microdirect and the website is still up and running.

I should have stuck with Novatech. Just bought a replacement motherboard from them.

Email:-

I am sorry to hear that you have had problems.
We are a new company and started trading on the 27/06/11.
Sadly we cannot assist you with this query on this occasion.

Regards,
Customer Services

[Iron Sights]

Lol!

It has been 10 years since I last played it, i cant remember quotes :-)
I sadly plan to play it before I play Revolution, so I better get my skates on as I pre-ordered it.


Odd that they didnt do their accounts on the 30/04/2011

I want to replay it too but I'm waiting for the deus ex hdtp mod. Progress for the mod has been very slow with little or no updates. Afaik the mod isnt dead.

http://www.offtopicproductions.com/hdtp/

[Saracen]

.... I finally got an email from them telling me they are a new company ( STILL TRADING UNDER MICRODIRECT ) and that they could not help me.

This is what happens when there is no liability on the directors. They can just shut up shop and go on as before without the debts .....

It's not quite that straightforward. In their role as directors, they are just a special category of paid employees.

Any company has a charter (the Articles and Memorandum of association), and that defines the powers of directors to run the company. i.e. what they can and can't do. Providing they stick to within their authority, and act within it, and of course provided they don't break company law, then they have no personal liability, unless they've also offered personal guarantees, usually because they're shareholders too.

And that's for the best, because if all directors were personally liable for company failure, you'd get few people prepared to take the risk, which would mean a lot of companies would not exist, and a lot of people that employed by those companies now would not be. I've been a company director. Would I have accepted that if I could lose my house and everything I own if the company went down? Not a hope in hell.

But if directors act "ultra vires", that is, outside of their legal authority, they can indeed end up personally liable. And, there are several hundred criminal offences that only a company director can commit, so there's a considerable degree of liability there, too.

There are provisions to prevent a company folding and immediately re-opening under a slightly different name, but I agree with you, they are by no means always effective, and in my view, it's high time they were revisited.

But sometimes, a company can go down for no fault of it's own.

Suppose you run a company and supply other companies with product. Your biggest customer goes down owing you a lot of money, and the bank won't extend your credit line until you get paid, if indeed you ever will. One of the times directors can end up both personally and criminally liable is when they continue to trade knowing that the company is insolvent.

So .... if a company gets into that situation, what would you have it do? Fold, and make all staff unemployed, or salvage what they can and start again? And remember, it wasn't their fault, they were done over by a customer that failed.

These things aren't always as simple as they seem from the outside.

[crossy]

15 years!! And it's never crossed your mind to google for cheaper sources?? Seriously, for everything they sell I/we can find a better alternative and at the same time gain better customer service, lets not forget more cost effective shipping.

Umm, when I used to use MD it was usually because either they were the cheapest on price comparison sites, or that they were the only folks with stock. Don't be too enamoured of Google shopping either - I've been shopping for a Class 10 32GB uSDHC recently, and the search results kept coming up either with US companies (despite me saying UK only) or UK companies with no stock and no firm expectations of availability. Which makes me wonder if some of these companies are "gaming" the Google searches.

I wonder have those guys at Microdirect come to any conclusions as they why they have a major fall in sales in recent months, I bet they're blaming the recession and not the fact their customer service is lousy!! their prices ain't competitive enough compared to the competition.

Granted I've not used them in a long time, but I'm wondering whether they've had a change of management sometime in the recent past. They seemed pretty okay when I've used them in the past, but I noticed that a year or three ago they seemed to change focus and became a lot less competitive. And I also agree with you about the importance of customer service - when are companies going to realise that this is a "must have" - not an option?

Nice posting by Saracen btw, there's been a lot of stories about "cowboy directors" and phoenix companies, so it's nice to hear the other side of the story (not that I'm implying Saracen is one of these management miscreants by any means).

[UltraNEO*]

Normally providing hardware and support kinda goes hand in hand.. it's part and parcel of the deal isn't it? I don't know of any other company who treat their customer like dirt on the sidewalk.

As far as my future trading with MD is concerned... Well, I found myself a new reseller one who's proud to offer a reputable online service geared towards the enthusiast market with a huge array of specialist products, giving us the ability to build dream systems. Soo I'm gonna continue to support them, even though they're 70-80miles away!!

[jazzsaxman]

There are rules in place to keep directors on the straight and narrow, but unless there is massive amounts of cash or fraud involved then no one cares. Our company was defrauded of several thousand pounds, owed to us by a company for work that I did. The director simply declared the company insolvent and immediately started another company under a different name and did the same work for the same customers with the same staff only difference was that the company did not owe any money. The banks were left to sort it out. In the end we got 6p in the pound. He even had the nerve to ask our company to do work for his new company. Needless to say I told him where to go.

This happens all the time. It is one of the reasons people, who start up business, do so as limited companies. Unfortunately it is the banks or creditors (us) who are left to foot the bill. There needs to be tougher legislation so that this sort of behaviour can not be repeated. If the company fails because of one customer then the company must have been on shaky ground or they allowed one customer too much credit. At the end of the day the directors are responsible for allowing these things to happen.

I have had to claim on my visa card for the motherboard, so there is the bank footing the bill for this companies failures. As I said before if they can do it once they can do it again, be aware.

[Saracen]

There are rules in place to keep directors on the straight and narrow, but unless there is massive amounts of cash or fraud involved then no one cares. Our company was defrauded of several thousand pounds, owed to us by a company for work that I did. The director simply declared the company insolvent and immediately started another company under a different name and did the same work for the same customers with the same staff only difference was that the company did not owe any money. The banks were left to sort it out. In the end we got 6p in the pound. He even had the nerve to ask our company to do work for his new company. Needless to say I told him where to go.

This happens all the time. It is one of the reasons people, who start up business, do so as limited companies. Unfortunately it is the banks or creditors (us) who are left to foot the bill. There needs to be tougher legislation so that this sort of behaviour can not be repeated. If the company fails because of one customer then the company must have been on shaky ground or they allowed one customer too much credit. At the end of the day the directors are responsible for allowing these things to happen.

I have had to claim on my visa card for the motherboard, so there is the bank footing the bill for this companies failures. As I said before if they can do it once they can do it again, be aware.

Again, you don't simply declare a company as insolvent. You will go through a process involving qualified insolvency practitioners, and one of several routes, depending on what happened, such as a voluntary insolvency .... but it's a court-supervised process, and there is specific legislation to protect people from abusers. But the thing is, as I said, there are any number of reasons why companies, quite legitimately, fail. The phoenix process is, if above board, quite legal and for the reasons I gave earlier, justified. If, however, directors indulge in asset striping at below market value as part of the phoenix process, then that is one of the situations in which they can find themse3lves personally liable for the debts of the old company. There is also legislation directly aimed at preventing serial abusers from holding company office, by whatever name and method, for up to 15 years.

I'm not saying it's perfect or that it always works, and as I said earlier, I think it needs to be revisited. But it is not as simple as just declaring yourself insolvent and starting again. For a start, to be insolvent, you have to meet the Insolvency Act's requirements, and if you do meet them, you don't have much choice but to take one of the insolvency routes, or creditor protection routes, depending on circumstances.

For the record, and with a nod in crossy's direction (), I've never been involved with a company insolvency, or not as part of the company, anyway. I did spend a decent chunk of time in my chartered accountancy training in the insolvency department, though .... but it was a long time ago, and before the current Insolvency Act became law. It's not my field, by any means. I just know it's not always as cut and dried as those that end up suffering the losses as creditors might think, if you see it from the inside.