November 30, 2015

Directors acquitted following firm’s collapse

Robert Peto, David Smith and Thomas Wright had been accused of failing to provide the 45 days’ notice of dismissal for the staff, when Midlands-based City Link collapsed on December 24.

A two-day trial heard that plans to inject £25million into the business had fallen through two days earlier.

It had been alleged that the three men would have known at this stage that jobs cuts were going to be inevitable and that they had failed to give the Business Secretary the statutory minimum of at least 45 days’ notice of redundancies.

Instead the company had kept trading up until Christmas Eve, when administrators took over. The two page HR1 form was sent on Boxing Day.

This month a Judge ruled that no plan was drawn up on December 22 to make redundancies and that the three men had maintained hopes of being able to save the company and its workforce by entering administration.

Smith, City Link’s former managing director, had told Coventry Magistrates Court: “Very clearly we were focused on moving to administration and trading through to Christmas without falling off the tightrope of wrongful trading.

“We only talked about the soft landing of the business and the orderly process of moving towards administration.”

The men were acquitted of the charge under the Trade Union Consolidation Act 1992.

At Royds our dispute resolution team has a wealth of experience representing clients in cases involving complicated insolvency laws. For more information please visit or contact Stewart Wilkinson or Ashok Patel.

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