Really? I’d say there are a couple of other major issues that impact firms coming out of administration.
1. The elephant in the room: The administrator cannot help but be biased towards doing a wind up as that will, in most cases, increase his remuneration. The receiver almost always becomes the liquidator.
2. Staff productivity drops towards zero (they turn up late, leave early and spend most of their time gossiping and looking for a new job) as it’s likely they are about to lose their job and effectively can’t be sacked.
3. Customers are terrified of the words ‘under administration’, whether it’s irrational or not.
4. Suppliers are terrified of the words ‘under administration’, despite the fact their sales are guaranteed after the administration has commenced.
I’d suggest that ‘Lack of Staff’ is a complete furphy.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
