here was what I was remembering - line towards the end. And it does seem to be the case in my gut - they still have some really good assets in there.
Collapse 'was not my fault', says Sea Containers boss
Independent Online: 22 October 2006
By Danny Fortson
Former chairman of failed group blames Government for the high price of GNER franchise
The former chairman of Sea Containers, the bankrupt transport and shipping group, has refused to take responsibility for the company's collapse, instead hitting out at the high price the Government charged for the GNER rail franchise.
Speaking for the first time since the company filed for bankruptcy protection last Sunday, James Sherwood also said he had no plans to forgo his $2m (£1m) severance payment.
Since stepping down in March from the company he founded, Mr Sherwood has become a lightning rod for criticism by investors. One investor said he had "blood on his hands".
Mr Sherwood built Sea Containers into a conglomerate with disparate businesses. In January, he helped recruit turnaround specialist Bob MacKenzie, who began furiously selling assets, including a ferry line and 14,000 containers, to raise cash, but it was not enough. The company filed for bankruptcy protection after it was unable to make a $115m bond payment. Under the filings, it listed $650m in debts and just $67m of free cash.
Mr Sherwood told The Independent on Sunday that the company was brought down by "factors ... completely beyond my or anyone else's control". Instead, he said, rising fuel prices and the 7 July London terrorist attacks were to blame.
He denied that the company overpaid when it agreed a £1.3bn offer for the GNER franchise, but added: "I should also say the Government required that certain assumptions were used in the franchise bid, like an annual GDP growth of 2.5 per cent. The Government insisted that these assumptions be used to obtain the franchise. It's a bit unfortunate that they may not stand by those assumptions later on."
Sea Containers is currently trying to renegotiate the contract with the Department for Transport. The UK's GDP growth rate would have affected the price of the franchise because it influences the rate of growth of the rail industry.
Mr Sherwood's $2m severance is now a claim in the bankruptcy process. "I'll get paid at the end of the day. The value of the assets of Sea Containers exceed the liabilities of the company."
The group's two pension schemes have a deficit of £133m and could be put into the Pension Protection Fund. Mr Sherwood receives $250,000 annually from his Sea Containers pension in the US.
