Three former Realtime Worlds directors linked to MyWorld buyout

There really shouldn't be any surprise here, this kind of thing happens all the time - company goes under owing money, senior management/owners set up new company and buy the old company's assets. Whether it should be ALLOWED to happen is another thing, but it does.

Posted:2 years ago

I have mixed feelings about this kind of thing.

Protecting company directors and owners from some of the consequences of a failed company via limited liability is an imperative in creating the kind of environment where people feel able to take calculated risks with their money. If you have some kind of post-administration penalty or restrictions on former company officers, there just might be negative consequences for subsequent job creation.

On the other hand, you can easily envisage a situation where perverse incentives come into play - it's clear the company is going down, company directors may be able to save it by inviting others in or selling at some cost to themselves (diluted shareholding, reduced power etc), but of course have the alternative of letting everything fall apart then picking up the juicy bits for cheap.

I wonder if there is a jurisdiction somewhere that's attempted to resolve this kind of issue.

Posted:2 years ago

This happens in all walks of business life, look at football clubs for a start. However, that's not to suggest it's acceptable and you have to feel for the people hurt in all this when they read such headlines.

Posted:2 years ago

It also shows belief from Hetherington and Co. in MyWorld, something they obviously didn't have in APB.

Hetherington has been synonymous with the UK industry since the early/mid 80s, I for one have a lot of time for Ian, and have done since the Psygnosis days, so I say, good on them, and get the bloody title done and out.

Posted:2 years ago

@GI.biz - this is where a "like" button would be useful, a la Facebook.

What Stewart said.

Posted:2 years ago

The fact that the new company was setup after the board members knew their old company was probably going to be in trouble but before it actually hit the rocks does make it sound a tad dodgy, especially if (as the story suggests) the new company was setup as an off-the-shelf shell by a law firm acting on their behalf and they only joined it later on to hoover up the choice bits of their former company after it had collapsed.

What leaves a bad taste in the mouth for me is that this new company was apparently setup (in late July, according to this story, presumably with exactly this function in mind) three weeks before RTW went into administration (in mid-August). Which means the board of directors of RTW already knew the writing was on the wall and were preparing for the worst, but let their company flounder on for another few weeks and then collapse in such a way that it apparently left their employees thousands of pounds out of pocket, without any salary for their final few weeks, let alone any redundancy money.

It's like if the captain of the Titanic had hopped into a lifeboat after it hit the iceberg and paddled off, while his crew kept on assuring the passengers everything was going to be fine.

I can't help feeling the responsible thing to do would have been to wind things up gracefully at the end of July, and at least be able to cover the pay roll for the month, instead of letting the company go to the wall while laying plans to fly back in and pick at its carcass after the dust had settled.

But then I'm not a company director, so maybe it's just me...

Standard Disclaimer: My opinion only, does not reflect blah blah blah.

Edited 1 times. Last edit by John Bye on 28th September 2010 5:10pm

Posted:2 years ago

Interesting observation there john.

Edited 1 times. Last edit by Khaled Al-Hurby on 28th September 2010 5:23pm

Posted:2 years ago

There was a quite frank blog by a staff member, working on MyWorld, about how through APB they thought big mistakes were being made, and that it looked like it would go wrong. If these guys found a way to save a project that had promise, and save 20 staff, there is a definite positive there. I'm not saying it's ideal if they handled it in a sneaky way, but 100 jobs lost and 20 saved is at least a bit better than 120 jobs.

Posted:2 years ago

I wonder what the other 100 or so ex-staff members of RTW feel about this.

.. and what John said.

Posted:2 years ago

Given the new company was called Newincco, and bought from lawyers, it's probable that it was an off-the-shelf-company bought from the lawyers. i.e. the incorporation date of the company is not the point at which Hetherington and co set up the new company. The date that the directors went to the lawyers and asked for a new company is probably September, the date it had its directors appointed and name changed.

Posted:2 years ago

You could be right. The company's full name was actually Newincco 1027, it looks like Olswang has lots of them, so maybe the RTW directors just bought one off the shelf a few weeks ago and it's purely coincidental that the company was originally registered just before RTW shut down. The way the story was worded, it sounded like the company was setup on their behalf by Olswang in July, but maybe that's not the case. It would be interesting if someone could confirm the details.

If everything was above board though, apologies for jumping to conclusions.

Posted:2 years ago