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Pulling the cord: Shutting down a business

 Last December, we shut down the first business in which we invested; making baby food.   The reason was we were being sued for having glass in our food.  We took this very seriously and immediately shut down our production as soon as we heard that a client had found glass in her daughter's baby food, she was asking 100,000 pounds for distress and possible harm to her daughter.   We found this to be a strange reaction and so we asked for a sample of the glass, and what came out was that the glass was not from our pots.   In fact, none of the glass in our plant matched.  Because the ask was so large, the insurance company got involved as the Office for Product Safety and Standards.

The managers, ourselves sat down with the various authorities and in the end, the decision was made to shut down the company, first because we could no longer get insurance, and as such the business was doomed.   In reality, the meeting was far shorter than the authorities had anticipated because my wife was there to inform them that we were shutting down with immediate effect.   

I can discuss it now because the whole sorry saga was resolved a few weeks ago.   It seems that because the amount requested by the client was so large the insurance company got involved, it was their investigator who discovered that this client had used similar stratagems in the past to extract money from companies, claiming harm to her children.  

We had no idea if there was even any glass in her baby food, for us the damage had already been done, and we had closed the business, with the loss of 23 jobs.   This is the United Kingdom, there is no redress for a wronged business.   the reaction of the authorities was reasonable, glass had been found in baby food, and we could not continue since we could not identify the source of the glass.   

Financially, our losses were insignificant, we had invested about 250,000 pounds and had long ago recovered that amount in dividends, but it was still painful to see a business destroyed by a thief.   The truth was that this person used social media to her advantage.   

These are the lessons you learn.

Note:  As for the managers and the employees I am can report that they all found good and well paying jobs to replace their income.





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