TUPE is the key
TUPE (The Transfer of Undertakings (Protection of Employment) Regulations) is always a key issue in terms of any corporate rescue.
When a business is sold from one person to another then TUPE generally applies. This has the effect of transferring some liabilities from one organisation to another.
I have not been able as yet to clarify the position as to exactly which liabilities transfer through administration.
My understanding is that the liabilities for redundancy payments rest with the administrator if redundancies are made during administration. That is a reason why normally a lot of redundancies occur during administration.
There are press reports indicating that other liabilities transfer. This may mean that the only way forward that anyone will finance is to have completely new businesses set up and employ new staff (which are, of course, likely [but not guaranteed] to be people who were made redundant). It does appear that TUPE scuppered the SAIC possibility.
If the business is not bought as a "going concern" then TUPE does not apply.This press release from PWC
explains the situation.
It has been represented inaccurately in various places.
The key phrase is:"We have received a copy letter from SAIC early this morning which communicates to the DTi that they are not willing to acquire either the whole or part of the business on a going concern basis. "
In the press conference they also said they would not even work with a third party.
Although Intellectual Property Rights have been sold to SAIC they also need the people who know how to use the IPR. That also leaves an opportunity open.