Insolvency legislation and the procurement dilemma

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Thoughtful post from procurement expert Peter Smith on last week’s news that three City Link directors are set to be prosecuted for not giving the UK government sufficient notice that the firm was due to enter bankruptcy and make thousands of staff redundant. Mr Smith argues that the 90-day notice the law requires is “nonsensical”, since every customer of that firm would pull its business as soon as it could, thus further accelerating the impending bankruptcy. “So the act of announcing the potential administration will almost certainly send the firm into a more rapid decline. Whereas taking another month or two to try and turn things round might just (in a few situations at least) pay off and save the firm.”