Can you tell if your company's about to go bust ?

A question about : Can you tell if your company's about to go bust ?

Hi all

Re. companies going bankrupt (or into administration), how early on do the employees get told ?

Or do they get told ?

For example, a fairly well-known business apparently bought loads of new stuff (computers etc...) about 2-3 months before it went bust !!

Presumably they knew they were in the red, but still went ahead and did what they did.

Is this a norm ? - i.e. keeping employees in the dark, pretending everything's absolutely fine, and then in the last minute tell them they're all going to be made redundant ?

Best answers:

• For companies that go bust - yes it is generally the norm. A lot of companies try to trade out of the mess they are in, and some manage it. But telling the staff - no, because the minute they do the news is all over the place and they have no chance of surviving. They may as well take an advert out in the nationals saying that they expect to be bust in two months - which means they will actually be bust in two weeks. Nobody trades with a company they know will go bust and nobody buys from them.
• I work in the Insolvency industry,a few years ago i was discussing with a company director the Administration regulations when there was a knock on the door and it was a well dressed gentlemen delivering a new 70K Mercedes.
  The company ceased to trade two days later !!!
• Some companies you can see it coming, there will be cash flow problems.
  It might be little things not getting bought or bill getting paid later sometimes it will be a late payment of wages.
  Other have the line of credit so can hide it till the plug gets pulled.