Compliance Toolkit

Ex-Time employees see hopes dashed

Colin Barker ZDNet.co.uk

Published: 15 Aug 2005 13:00 BST

A ruling that gave former employees of Granville Technology hope that they might receive some payment from the company's administrators has been overturned by the Court of Appeal.

Granville Technology, which operated the Time Computers, Tiny and the Computer Shop brands, went into administration last month. An application made by the administrators, Grant Thornton, to reverse the judgment in the landmark case Kasner v McMath was successful last week.

This judgement had allowed for so-called "protective awards", such as payments in lieu of notice, to be treated differently from other unsecured money.

If the judgment had stood, the administrators would have been forced to treat some employees as secured creditors. However, Grant Thornton's lawyers, Lovells, successfully argued that this would have made it more difficult for the administrators to save the company. They argued that, faced with having to make payments to a large number of employees, the administrators would be forced to lay-off the remaining 100 people who are still employed at Granville Technology.

According to the Department of Trade, the principles of administration are based on the idea that the company in administration can be saved and that this should be the first priority.

Many customers who had placed orders with Granville Technology Group before its collapse are also worried that they will not receive either their goods or their money back.