# SeaFrance Goes Into Liquidation



## Binnacle (Jul 22, 2005)

http://www.bbc.co.uk/news/uk-england-16469300


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## Killisport (Mar 30, 2009)

This has been on the cards for a couple of months now. P&O in the market for a couple of nearly new ships?


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## ART6 (Sep 14, 2010)

The EC ruling is odd though. We had a similar situation here in Ireland where a small regional (but vital) airline went into administration. Because of its importance to the South East businesses, some MPs asked the government to consider bailing it out with public funds. The government refused on the basis that doing so was illegal under EU law as the airline was a private sector company.

The same government (and the UK and other EU governments) then bailed out banks to the tune of many billions. That, apparently,_ was_ perfectly legal. I have never been quite able to grasp that, as I was under the impression that the banks were also private sector companies.

I wonder -- Is this another case where there is one law for the bankers and a quite different one for everyone else?


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## Winebuff (Jan 11, 2010)

They helped force SpeedFerries out of business some time ago, it will be sometime before the cross channel market picks up again.
We used to go over a couple of time a year just shopping in City Europe in Calais but last time it was almost deserted and the train half empty.
The combination of French inflation and the falling exchange rate has ruined that trade.
Shame really it was a damm good day out.


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## Gollywobbler (Dec 4, 2010)

ART6 said:


> The EC ruling is odd though. We had a similar situation here in Ireland where a small regional (but vital) airline went into administration. Because of its importance to the South East businesses, some MPs asked the government to consider bailing it out with public funds. The government refused on the basis that doing so was illegal under EU law as the airline was a private sector company.
> 
> The same government (and the UK and other EU governments) then bailed out banks to the tune of many billions. That, apparently,_ was_ perfectly legal. I have never been quite able to grasp that, as I was under the impression that the banks were also private sector companies.
> 
> I wonder -- Is this another case where there is one law for the bankers and a quite different one for everyone else?


Hi Tony

[


> I wonder -- Is this another case where there is one law for the bankers and a quite different one for everyone else?


I think definitely yes, but I also suspect that the French Government might have had their knuckles rapped. 

About 8 years ago, Britanny Ferries were in strife and the French Government reportedly bought a 40% stake in the company, which kept it afloat. 

P&O Ferries then asked for similar help from the British Government - and were refused. According to the British Government, it would be a breach of EU anti-competition law if they helped P&O Ferries. 

Not unreasonably, critics demanded to know what was different about Britanny Ferries, in that case? There was never a satisfactory answer. Suddenly the British Government "does not comment" on what another sovereign Government might do.

I suspect that the French Government might have been told by the EC not to try to pull the same stunt twice by helping SeaFrance next. 

Cheers

Gill


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## Locking Splice (Oct 28, 2006)

Shame as they were nice ships, sadly in the last year vessels were getting more shabbier inside due to lack of catering crew on board, and what crew there was looking pretty fed up although the Deckies were always pleasant, sometimes the shops did not open and the Bureau de change would close after just ten minutes. On the plus side they could have sold their service on the speed in which they crossed the channel, they used to gallop past P&O.
Just the final waiting game now especially with Eurotunnel throwing their hat in the ring at the last moment.
The Berlioz and her sister the Rodin are still sitting at the Calais link span's, and travelling back last night from Calais we could Police everywhere in the port as they were apparently expecting some of the seafarers to try to get aboard the vessels. Rumour had it that thy might try and sink th ships on the berths . 
I for one will be sorry to see them go.

Regards
Yuge


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## Tony Collins (Aug 29, 2010)

> The same government (and the UK and other EU governments) then bailed out banks to the tune of many billions. That, apparently, was perfectly legal. I have never been quite able to grasp that, as I was under the impression that the banks were also private sector companies.


The effects of the banks going out of business would have very much exceeded the effects of a ferry company going out of business where competition existed.

Everyone in the country would have been affected, every company, every wage packet and every private account would have been put at risk. I am no advocate for the banks, (I think they have been greedy and stupid), but I understand the position forced the government to take action.

If a new shareholder (French Government) had invested money in Sea-France, all their competitors would have shrieked "FOUL" and rightly so. It is a pity that the company were not able to take remdial action before the insovency appeared on the doorstep.


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## Gollywobbler (Dec 4, 2010)

Tony Collins said:


> The effects of the banks going out of business would have very much exceeded the effects of a ferry company going out of business where competition existed.
> 
> Everyone in the country would have been affected, every company, every wage packet and every private account would have been put at risk. I am no advocate for the banks, (I think they have been greedy and stupid), but I understand the position forced the government to take action.
> 
> If a new shareholder (French Government) had invested money in Sea-France, all their competitors would have shrieked "FOUL" and rightly so. It is a pity that the company were not able to take remdial action before the insovency appeared on the doorstep.


Hi Tony Collins

I agree with you that saving SeaFrance would not ensure re-election for Sarkozy, so he would be unlikely to order the French Government to bother. 

I am not sure that I agree with the contentions in your first two paragraphs, though. 

A run on the clearing banks would cause the national Government to fall. I suspect that the pollies were more interested in their own political survival than they ever were in the real survival of their tax-payers.

A few weeks ago, I read that apparently Barack Obama has recently been bemoaning the American Government's decision to allow Lehman Bros to go to the wall. Apparently he didn't foresee that Uncle Sam's failure to protect Lehmans would cause as many knock-on problems as it has. A President with any moral courage and decency would resign after an admission like that, it seems to me. 

Since then, the FSA in the UK have admitted that they didn't really understand what the Bankers were up to, so they also didn't foresee trouble ahead. The idea of paying the Financial Services regulator to understand the products being hawked around in the international Financial Services market was apparently too much to expect from the FSA. The debacle has become a "learning opportunity" for them instead, it would seem. 

In defence of the FSA, I would comment that that dreadful man Peter Mendelson said that he and Blair were "intensely relaxed" about the giant Ponzi scheme over which they were presiding at the time. God forbid that considerations on behalf of the lowly tax-payer should ever interfere with feeding time at the trough, clearly!

Cheers

Gill


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## borderreiver (Oct 11, 2008)

Please do not use that Name (peter mendelson) Had to go and find a sick bag. he was part of the cause of our troubles


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## James_C (Feb 17, 2005)

Gill,
To be fair to Obama in regards Lehman brothers, it was his predecessor G.W. Bush who was in power when the company filed for bankruptcy and was broken up.


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## ART6 (Sep 14, 2010)

Private companies fail for all sorts of reasons -- a declining market, excessive overheads that have not been controlled, failure to move with the times, etc. etc. In the case of the French ferries, maybe it might be a bit of the first. A trawl of channel crossing fares for two people and a car suggests that (depending on times and dates) Eurostar was in some cases the most expensive by about £50 or was in the middle or low end of the range. The difference, maybe, is that the Eurostar crossing takes 35 minutes to Calais, while the ferries take anything up to two hours. Not everyone, perhaps, wants to load their car on a ferry and then wait two hours to get anywhere when they could do the same journey (without any weather considerations) in 35 minutes. The market has changed.

Should the governments have bailed out the banks and not the private companies, when the banks themselves were also private companies? I don't know, although I can't quite understand the difference between a private company that is a bank and one that is a shipping line, although the former is, we are told, too big to fail. However, no government can be expected to bail out every private company that fails.

I guess the big difference between the two is that when a private company goes down, it is the shareholders who lose most. After all, they speculated. If a bank goes down the bondholders who speculated lose most. Since those bondholders are in German and French banks etc. the bonds must the converted to sovereign debt to guarantee them. Their investment (and speculation) must be guaranteed, and any loss to them cannot be permitted by the ECB. 

Given that situation, therefore, I imagine that Sea France going to the wall is a minor blow to French pride, but from their government's point of view it is not material. However, the failure of foreign banks that have sold bonds to French banks would be very material indeed and would severely damage the French economy, which is already shaky. 

The Euro is already in big trouble, and the ruling elite in the EU cannot accept any more blows. Therefore, I wouldn't hold my breath for any rescue of Sea France either by the private sector or by any government action. If I had deep pockets, I wouldn't delve into them for any cross Channel ferry company nowadays. I believe the market is constricting. It's sad, but that's life!


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## Ron Stringer (Mar 15, 2005)

ART6 said:


> I guess the big difference between the two is that when a private company goes down, it is the shareholders who lose most. After all, they speculated.


While agreeing with much of your post Art, I would point out that those who lose most (and most unfairly) are usually the creditors. Those are people and organisations that have entered into a legal contract with the company that has failed and have supplied goods and services in good faith, expecting to be paid as agreed in the contract. They did not speculate, or believe that they were taking a chance, nor did they intend to. When the bankruptcy is declared they lose all hopes of payment.


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## ART6 (Sep 14, 2010)

Ron Stringer said:


> While agreeing with much of your post Art, I would point out that those who lose most (and most unfairly) are usually the creditors. Those are people and organisations that have entered into a legal contract with the company that has failed and have supplied goods and services in good faith, expecting to be paid as agreed in the contract. They did not speculate, or believe that they were taking a chance, nor did they intend to. When the bankruptcy is declared they lose all hopes of payment.


You are, of course, correct Ron. In fact in my post I did initially refer to both shareholders and creditors, but deleted the latter for clarity. The point I was making was that where banks are concerned it is the bond holders who lose most, and since they are other banks the domino effect comes into play. It doesn't do that where Sea France is concerned.

The other point is that when a company is liquidated, its assets are soled and used to pay off creditors to whatever extent possible. I would imagine that the ships might be worth a bob or two.


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