Exclusive: Directors' guarantee

richard@imutual
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Exclusive: Directors' guarantee

Post by richard@imutual » Thu Mar 10, 2011 10:47 am

With several cashback sites and their partner companies going into liquidation over the past year, the issue of trust now looms large. Specifically the danger that, if a company goes bust and you have awarded cashback which hasn't yet been paid to you, you stand to lose it :(

It is extremely unlikely that imutual will ever face such financial difficulties. But you can't be expected to take my word for that, so I wanted to provide some additional assurance.

Several months ago, I started a discussion about ring-fencing cashback but proper ringfencing costs money and would mean we would have to offer less than 100% cashback on our offers in order to fund it. Why? Because it is not sufficient to simply put unclaimed money in a separate account. Unless legal agreements have been drawn up, a company facing insolvency cannot set aside some of its funds for specific creditors (i.e. members); it must treat all creditors equally.

To overcome this (and as announced during Monday's webcast), I (and fellow director Mrs Y) have decided to take an unprecedented step; one which achieves the same 'ring-fencing' but at minimal cost. Normally a director of a company is not liable for its debts if it becomes insolvent (unless serious malpractice has taken place), but we the directors of imutual undertake the following:
In the event that imutual PLC became insolvent, we would personally guarantee payments to any member for cashback which had been validated (i.e. the merchant has either paid for the transaction or confirmed that the transaction is valid) but had not been paid out to the member
Please note this does not mean 'all cashback is guaranteed'. We still have to operate on the principle that we can only pay cashback when the merchant confirms that a transaction is valid.

But I hope you will agree that this is a significant undertaking that no other cashback company's directors have ever made. We're putting our heads (and home) on the block to demonstrate imutual's trustworthiness and our own confidence in the company.

I think this should help imutual to stand out from the crowd and give more people the confidence to join and give imutual a try :)

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Re: Exclusive: Directors' guarantee

Post by blythburgh » Thu Mar 10, 2011 11:40 am

Thank you for this. As you say, it can only apply to money that has been paid to the company and not pending amounts.

But it is a very welcome promise.
Keep smiling because the light at the end of someone's tunnel may be you, Ron Cheneler

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Re: Exclusive: Directors' guarantee

Post by Mel » Thu Mar 10, 2011 1:00 pm

A worthy commitment. Let's hope you never have to sell the mansion etc. to pay our pennies!

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Re: Exclusive: Directors' guarantee

Post by colsey » Thu Mar 10, 2011 1:17 pm

That's great Rich. Thanks given.

I doubt you can say, but how much was lost by members on the other site?

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Re: Exclusive: Directors' guarantee

Post by kevinchess1 » Thu Mar 10, 2011 1:19 pm

Get me thumbs up.
I can't see how a company can 'Ringfence' cashbac :?:
I mean if they give it to a Third partie what happens it the turd pary runs off/goes bust.
Could find yourself in the situ of not bein able to pay members threw no fault of your own.
I guess the only way you could do it would be to have some sort of auto systmn where as the money came in it went straight out to the members
but I'm certain the costs would be horrendous.
Me own PERSONAL VP is that I'd rather take a small risk with me cashbac so we can carry on fundin stuff like;
This and
This and
This and
This and
This and
This
Just me thoughts of course
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Re: Exclusive: Directors' guarantee

Post by kevinchess1 » Wed Mar 30, 2011 11:23 pm

As this thread is title 'Directors guarantee'
i assume, were you ever removed in a coup, then the DG would stop
at the same time :?:
Politically incorrect since 69

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Re: Exclusive: Directors' guarantee

Post by richard@imutual » Fri Apr 01, 2011 7:14 am

Yes. I would seem somewhat unfair if I were voted out by members and my replacement set about plundering the company finances safe in the knowledge that I still had to guarantee payments to members :shock: (a situation with which I am all too familiar :( )

Of course, any new director may wish to make the same guarantee. It's not mandatory but it would be up to the voting shareholders to decide how important that was

What I would say is that, if at any point I withdraw the guarantee, it should still remain in force for any transactions done up to that date (whether in pending or awarded status) and that members have a further six months to redeem. I think that provides more-than-sufficient safeguards :)
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