PracticeConsultingFord fails in court battle against Arthur Andersen

Ford fails in court battle against Arthur Andersen

Motor giant Ford failed in the High Court on Friday to remove Arthur Andersen as receivers for former paymaster-general Geoffrey Robinson's collapsed engineering group, Transtec.

Ford branded as ‘blackmail’ the Big Five firm’s threat to close Transtec’s Northern Ireland subsidiary plant unless a maximum of £65 million over five years was paid for a crucial cylinder supply contract.

Andersen held that the new contract was required to enable the plant to be sold, according to the Financial Times.

Mr Justice Jacobs ruled that Andersen had acted properly, dismissed the petition as an abuse of the court’s process and awarded costs against Ford.

He said that receivers were entitled to exploit a customer’s vulnerability since their primary responsibility was to raise money to repay creditors.

‘It is his job to get in as much money as he can’, the judge said.

The Campsie factory solely produces over half the cylinder heads Ford needs for its popular Explorer model.

Ford had sought to argue in court that Andersen’s demands amounted to blackmail as opposed to tough negotiation, and wanted the court to appoint a provisional liquidator for the plant.

The judge argued that Ford could even benefit from Andersen’s terms as an unsecured creditor.

Ford this week are set to go to the Court of Appeal to overturn the ruling and is reported to have stated on Friday that it would rather cut ties with Campsie than concede to Andersen’s terms.

Transtec folded last December following a £12m claim by Ford against them, but its Campsie subsidiary plant continued production after Ford chose to underwrite production.

Inland Revenue fraud investigators question Ford workers over charity tax scam

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