Who pays the Directors?

Among the first of many questions asked by directors of a company in financial difficulty is ‘how am I going to pay my staff?’.  With challenging cash flow and depleting available funds, most directors in such situation opt to forego their own salary to pay for their staff.  A noble action indeed, but it is the right one?

When the company eventually goes into liquidation, the government through the Redundancy Payments Service and under the Employment Rights Act scheme protects employees for unpaid wages.  Employees owed unpaid wages, holiday pay, notice pay and redundancy can claim against this scheme and chances are the employees will be paid their entitlement albeit with a few limitations.

For directors, they have the same opportunity to claim.  However, there are more hurdles to overcome before payments are made to them.  In most circumstances, director/owners of liquidated companies tend to have their claim rejected.

As always, help from experience professionals such as ourselves may be the difference between losing out on such a claim and receiving a cheque from the government.

South London Healthcare Trust enters Administration

After weeks of speculation, South London NHS Healthcare Trust has entered administration after running up substantial debts.

South London NHS Healthcare Trust was the result of a merger of The Princess Royal hospital in Orpington, the Queen Mary hospital in Sidcup, and the Queen Elizabeth hospital in Woolwich. At this time, deficit was about £21 million. In 2011, this rose to £40 million.

Despite having one of the lowest mortality and infection rates in the country, and massive improvements in the quality of care, the financial challenge facing the trust is significant. A trust spokesperson said the hospitals will continue to provide first class care and there will be no impact on scheduled appointments.