Media Square buyout sparks calls for law change
The controversial sale of Media Square to its former management by administrators PwC has sparked calls for a change in the law to block management buyouts which have not received the approval of creditors or shareholders.
Bob Willott, editor of Marketing Services Financial Intelligence, asked: “At Media Square, despite their best efforts the incumbent management had failed to restore the company’s fortunes, so why should they have been rewarded with a second chance?
“And who determines whether the price paid for the buyout is the best available, or whether the management should be allowed to buy at a price that may be less than it would have been if the business, or its component parts, had been sold sooner?”
To resolve such conflicts Willott suggests it might be better to impose a five year ban on any former director of an insolvent company from returning as a director or shareholder of any company that acquires all or part of that business.