Alfred an OK to continue trading.”
More than enough, I thought, to give Ivan a heart attack.
I asked, “How much is missing?”
He smiled. “How big is a fog?”
“You mean, you don’t know?”
“Our embezzler was the Finance Director. He worked the three-card trick. Find the queen... but she’s gone to a nice anonymous bank account forever and all you have left is debts.”
I frowned. “You’re not being awfully precise.”
“I warned Sir Ivan last year that I thought he had an open drain somewhere, but he didn’t want to believe it. Now he’s so ill, he still won’t face it. I’m sorry to say it, but there it is. And he would rather cover up the theft, if he can, than admit to the world that he—and his whole Board of Directors—has been careless and even stupid.”
“And he’s not the first down that road.”
“Far, far from it.”
“So... what are your life-belt measures?”
He hesitated, picking away at the teeth. “I can advise you,” he said, “but I cannot act for you. As an auditor I must keep a certain distance from my clients’ affairs. In effect, I can only point out a course of action you might wish to take.”
“Then please point.”
He fiddled some more with his mouth and I felt sore and in need of sleep and not scintillatingly bright.
“I would suggest,” he said carefully, “that you might call in an insolvency practitioner.”
“A who?”
“Insolvency practitioner. Someone to negotiate for you.”
“I didn’t know such people existed.”
“Lucky you.”
“Where do I find one?” I asked blankly.
“I’ll give you a name. I can do that at least.”
“And,” I asked gratefully, “what will he do?”
“She.”
“Oh... well, what will she do?”
“If she thinks the brewery can be saved—and to do that she will have to make her own independent assessment of the position—if she thinks there’s still life in the corpse she’ll set up a CVA.”
He looked at my face. “A CVA,” he explained patiently, “is a creditors’ voluntary arrangement. In other words, she will try to call together a meeting of creditors. She’ll explain to them the scope of the losses, and if she can persuade them that the brewery can go back to trading at a profit, they will together work out a rate at which the debts can be paid off bit by bit. Creditors will always do that if possible, because if they force a firm into total bankruptcy, they don’t get paid much at all.”
“That,” I said, “I understand.”
“Then,” Tobias went on, “if the committee, acting with the brewery, can produce to me a budget and a forecast that will satisfy me as auditor that the brewery has a viable future, then I can sign the firm’s accounts, and it can continue to trade.”
“Well...” I thought for a bit, then said, “What are the chances?”
“Fairly reasonable.”
“No higher?”
“It depends on the creditors.”
“And... er... who are they?”
“The usual. The bank. The Inland Revenue. The pension fund. The suppliers.”
“The bank?”
“The Finance Director organized a line of credit for expansion. The money’s gone. There’s no expansion and nothing in the bank to service the loan. To pay the interest, that is to say. The bank has given notice that they will not honor any more checks.”
“And the tax people?”
“The brewery hasn’t paid its employees’ workers’ compensation contributions for six months. The money’s vanished. As for the pension fund, it’s evaporated. The suppliers in comparison are small beer, if you’ll excuse the dreadful pun; but the can suppliers are berserk.”
“What a mess,” I said. “Aren’t there any... we... assets? ”
“Sure. The brewery itself. But there’s an outstanding loan on that, too, and nothing left to service it with. The bank would foreclose at a loss.”
“What about the pubs the brewery owns?” I asked.
“The tied houses? The Finance Director mortgaged the lot. To put it
More than enough, I thought, to give Ivan a heart attack.
I asked, “How much is missing?”
He smiled. “How big is a fog?”
“You mean, you don’t know?”
“Our embezzler was the Finance Director. He worked the three-card trick. Find the queen... but she’s gone to a nice anonymous bank account forever and all you have left is debts.”
I frowned. “You’re not being awfully precise.”
“I warned Sir Ivan last year that I thought he had an open drain somewhere, but he didn’t want to believe it. Now he’s so ill, he still won’t face it. I’m sorry to say it, but there it is. And he would rather cover up the theft, if he can, than admit to the world that he—and his whole Board of Directors—has been careless and even stupid.”
“And he’s not the first down that road.”
“Far, far from it.”
“So... what are your life-belt measures?”
He hesitated, picking away at the teeth. “I can advise you,” he said, “but I cannot act for you. As an auditor I must keep a certain distance from my clients’ affairs. In effect, I can only point out a course of action you might wish to take.”
“Then please point.”
He fiddled some more with his mouth and I felt sore and in need of sleep and not scintillatingly bright.
“I would suggest,” he said carefully, “that you might call in an insolvency practitioner.”
“A who?”
“Insolvency practitioner. Someone to negotiate for you.”
“I didn’t know such people existed.”
“Lucky you.”
“Where do I find one?” I asked blankly.
“I’ll give you a name. I can do that at least.”
“And,” I asked gratefully, “what will he do?”
“She.”
“Oh... well, what will she do?”
“If she thinks the brewery can be saved—and to do that she will have to make her own independent assessment of the position—if she thinks there’s still life in the corpse she’ll set up a CVA.”
He looked at my face. “A CVA,” he explained patiently, “is a creditors’ voluntary arrangement. In other words, she will try to call together a meeting of creditors. She’ll explain to them the scope of the losses, and if she can persuade them that the brewery can go back to trading at a profit, they will together work out a rate at which the debts can be paid off bit by bit. Creditors will always do that if possible, because if they force a firm into total bankruptcy, they don’t get paid much at all.”
“That,” I said, “I understand.”
“Then,” Tobias went on, “if the committee, acting with the brewery, can produce to me a budget and a forecast that will satisfy me as auditor that the brewery has a viable future, then I can sign the firm’s accounts, and it can continue to trade.”
“Well...” I thought for a bit, then said, “What are the chances?”
“Fairly reasonable.”
“No higher?”
“It depends on the creditors.”
“And... er... who are they?”
“The usual. The bank. The Inland Revenue. The pension fund. The suppliers.”
“The bank?”
“The Finance Director organized a line of credit for expansion. The money’s gone. There’s no expansion and nothing in the bank to service the loan. To pay the interest, that is to say. The bank has given notice that they will not honor any more checks.”
“And the tax people?”
“The brewery hasn’t paid its employees’ workers’ compensation contributions for six months. The money’s vanished. As for the pension fund, it’s evaporated. The suppliers in comparison are small beer, if you’ll excuse the dreadful pun; but the can suppliers are berserk.”
“What a mess,” I said. “Aren’t there any... we... assets? ”
“Sure. The brewery itself. But there’s an outstanding loan on that, too, and nothing left to service it with. The bank would foreclose at a loss.”
“What about the pubs the brewery owns?” I asked.
“The tied houses? The Finance Director mortgaged the lot. To put it
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