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| City Link owner defends handling of firm's administration | City Link owner defends handling of firm's administration |
| (about 4 hours later) | |
| Jon Moulton, the founder of the company which owned collapsed UK parcels firm City Link, said its administration was handled in the best way possible. | |
| News of the collapse was announced on Christmas Eve, but Mr Moulton said the timing could not have been avoided. | News of the collapse was announced on Christmas Eve, but Mr Moulton said the timing could not have been avoided. |
| On Monday, the administrators which now run City Link, said they had begun telling the 2,727 staff that "substantial" job cuts were now likely. | |
| There are still about 40,000 parcels at City Link depots across the country. | |
| Customers are being urged to collect parcels from depots from Monday. | |
| Mr Moulton, founder of investment business Better Capital, told Radio 4's Today programme: "We chased every possible way to save this company." | |
| He said that delaying the closure of City Link over Christmas had not been an option, as trading while insolvent was a criminal offence. | |
| He also defended criticism that taxpayers would end up paying for City Link staff's redundancy following administrator Ernst & Young's (EY) statement that it would refer employees to the government's statutory redundancy payments scheme. | He also defended criticism that taxpayers would end up paying for City Link staff's redundancy following administrator Ernst & Young's (EY) statement that it would refer employees to the government's statutory redundancy payments scheme. |
| Transport Union RMT's General Secretary Mick Cash said: "It says everything about the state of industry in Britain today that a donor to the party of government can wreck the lives of thousands of people, walk away and leave the taxpayer to pick up the redundancy costs." | Transport Union RMT's General Secretary Mick Cash said: "It says everything about the state of industry in Britain today that a donor to the party of government can wreck the lives of thousands of people, walk away and leave the taxpayer to pick up the redundancy costs." |
| Personal loss | Personal loss |
| But Mr Moulton said: "I don't think the taxpayer is going to end up footing much of a bill on this." He said that City Link had paid "a fortune" in taxes such as PAYE and said ultimately the government would be a net beneficiary of Better Capital's investment in the firm. | But Mr Moulton said: "I don't think the taxpayer is going to end up footing much of a bill on this." He said that City Link had paid "a fortune" in taxes such as PAYE and said ultimately the government would be a net beneficiary of Better Capital's investment in the firm. |
| "The taxpayer has certainly made an enormous amount of money out of private equity companies and their trading and success. | "The taxpayer has certainly made an enormous amount of money out of private equity companies and their trading and success. |
| "We are looking after money that has been given to us to invest, we are in the business of trying to make money for our investors," he added. | "We are looking after money that has been given to us to invest, we are in the business of trying to make money for our investors," he added. |
| Mr Moulton, a multi-millionaire, said he personally had lost £2m on the firm's investment in City Link. | Mr Moulton, a multi-millionaire, said he personally had lost £2m on the firm's investment in City Link. |
| Earlier on Monday, Better Capital said in its first statement since the firm went into administration, that it had tried various options to "maximise" its investment in City Link, including an unsuccessful attempt to sell the business. | |
| "In light of continued substantial losses, City Link could not continue as a going concern," it said. | "In light of continued substantial losses, City Link could not continue as a going concern," it said. |
| City Link, which was founded in 1969, was acquired by restructuring specialist Better Capital for just £1 in April 2013. | City Link, which was founded in 1969, was acquired by restructuring specialist Better Capital for just £1 in April 2013. |
| Parcel collections | Parcel collections |
| Meanwhile, in a statement on Monday, Ernst & Young said it had begun telling staff to expect heavy job cuts. | |
| "While no redundancies have been made today, the joint administrators believe that the company will unfortunately have to make substantial redundancies, which will take effect on 31 December. | |
| "Employees that are not immediately affected by redundancies will continue to be employed, and paid, to help return the estimated 40,000 parcels remaining in City Link's depots to customers and intended recipients, as well as assist in realising the company's assets and winding down its operations," the company said. | |
| The firm has said that parcel depots would "remain open for a short period of time" to enable customers and intended recipients to collect their parcels. | |
| It advised customers to use City Link's online tracking system to find out which depot to go to. | It advised customers to use City Link's online tracking system to find out which depot to go to. |
| Coventry-based City Link called in administrators on Christmas Eve after years of "substantial losses". | |
| Union RMT said it had been told by administrators that more than 2,000 staff will be made redundant on New Year's Eve. Remaining staff will be retained in the short term to wind down the company, union officials said. | Union RMT said it had been told by administrators that more than 2,000 staff will be made redundant on New Year's Eve. Remaining staff will be retained in the short term to wind down the company, union officials said. |
| The administrators said on Friday that they were gathering expressions of interest from parties interested in acquiring specific assets, divisions of the business or the entire firm, it added. | |
| But E&Y added that given the previous unsuccessful sale process administrators were "cautious about the prospects of finding a buyer". | |