Picsel US workers sue directors over 'unpaid wages'
We'll see you in court. Maybe
US ex-employees of Picsel, the Glasgow-based mobile software company that went titsup last year, are suing former directors of the firm for allegedly misleading them into working for free.
The five staff were employed by San Francisco-based Picsel Technologies Inc, a wholly-owned subsidiary of now-titsup Glasgow-based Picsel Technologies Limited.
The staff claim that that company directors Masood Jabbar and Imran Khand are guilty of "promising to compensate ... for the totality of their unpaid wages ... [while] knowing these statements were false". This resulted in them not getting paid for the best part of a year before the UK parent, Picsel Technologies Ltd, was wound up while the directors walked away from the firm's debts.
Picsel Technologies Ltd, chaired by Khand, collapsed, leaving creditors facing a payout of a penny on the pound according to the latest update (pdf) from the administrators.
That firm should not be confused with the currently-operating Glasgow-based Picsel Technologies Limited which is also chaired by Khand, who snapped up the assets of the former company from the administrators and promptly changed the name of the new company to match the old (the old company having been renamed "Lescip L", Piscel backwards, while in its death throes).
The two companies also have very similar logos. Visitors to the (new company's) site might also be confused by the assertion that it was established in 1998.
Spot the difference - one is bankrupt, the other's doing fine
The US employees plan to sue for back wages, and say the two directors "had knowledge of the uncompensated work performed by Plaintiffs and in fact, knowingly permitted, encouraged and/or required that such work be performed".
The action is being brought in San Francisco as that's where Picsel Technologies Inc. was based, but as the employees are in different states it's a federal action.
Imran Khand is probably beyond the reach of the local courts, but the filing identifies Masood Jabber as a "resident of California" and the complainants reckon that puts him within their grasp. They're demanding a jury trial, though the initial hearing scheduled for Wednesday had to be postponed while an International Service Of Process is obtained for Khand.
Not that the staff wanted things to end this way. Bill Vanke, who headed up Picsel's US operations, told us he was interested in buying the company from the administrators but said the phantasmagoria of companies that share the Picsel name was impenetrable: "You don't know who owns what it is you're trying to buy".
When the company got wound up last year the remaining UK employees did get the money owed to them, though some ex-employees who'd left pre-collapse were still pursuing the company though the tribunal system to claim their cash. US employees were not so lucky, so while the administrators are offering creditors a penny on the pound the staff of Picsel Technology Inc aren't getting a penny at all. ®
to previous commentors...
Rogerborg> the renaming to lescip was done by the administrators I believe, presumably as they knew they'd sold the rights to use those company names so didn't want any confusion...
McCoy> the last paragraph is certainly clumsy at best. Employees who were still with the company when the administrators sold it (that is, escaped the redundancy rounds by both the previous management and the administrators and had managed to keep their heads above water without leaving to get another job).
Graham Bartlett> Director's loans are perfectly legal; it's unclear from your post what was the illegal part of the first director's actions.
AC: Getting away with it
Happens way too often to count in the UK. Esther Rantzen and her programme ran regular spots naming people who'd run up huge debts on their business and stolen customers' money, then wound up the business and started another with the same name doing exactly the same thing, at no cost to themselves. Double-glazing was particularly notorious for it.
About 3 years ago now, an umbrella company "Prosperity 4" went bankrupt despite having a healthy turnover. One of the directors was taking illegal "loans" from the company. He paid them back, got off scott free, formed himself a new company, and bought P4's list of clients and fixed assets to carry on business as usual. (The other director was the one who particularly drove the company into administration - as well as illegal loans, he also invested the company's money in racehorses. Criminal action against him is still pending.) The new company is called "Tarpon" BTW, just in case you're tempted to do business with them.
, bcos one of the directors chose to illegally 'invest' the company's money in a string of racehorses
They certainly give good value for amusement purposes
It's legal to re-use the company name if "a company acquires the whole or substantially the whole, of the business of an insolvent company, under arrangements made by an insolvency practitioner acting as its liquidator, administrator or administrative receiver, or as supervisor of a voluntary arrangement."
Liquidators have godlike powers in these matters, and yes, PWC basically rubberstamped the respawn. It's no skin off their nose, and they'll doubtless be back for another bite at the cherry soon enough.
Characteristically, the renaming to "Lescip" was laughable childish and pointless, since the re-use prohibition is on all names used within 12 months prior to the insolvency, "or any name so similar as to suggest an association with that company", so triple fail.