In the week that it is announced that audio workstation Sadie has been saved, Will Strauss wonders if other companies understand the implications of going into administration.

It's so lovely to report some happy news. The Sadie audio editing product has been saved from extinction. The assets of Studio Audio and Video, the company that invented it, have been bought by Prism Sound, the recoding and broadcast interface and converter manufacturer.

Prism has saved a product that was not only loved but also well used. Especially within the BBC. As Rupert Goodwin says in his blog, it is pretty important to Auntie Beeb:

  • You may not have heard of SADiE, but you will have heard its output - it's the editor of choice within BBC Radio, which rather depends on the software.

So, what happened?

Studio Audio and Video Limited was established in 1991. The digital audio workstation Sadie started life as a simple replacement for the two track tape recorder. It is now the de facto standard for radio feature production.

Following some difficult market conditions the company found itself in financial trouble. So much so that the Cambridgeshire based manufacturer was put under the control of accountancy firm Ensors on February 15th.

It remained under the control of the administrator until pretty much today (Tuesday 1 April) when a deal with Prism Sound was completed.

The employees within the BBC - and other users of Sadie - will be ecstatic at this news. When a company enters administration, and cut backs are made, not only do staff and suppliers lose out. People further down the supply chain are affected too. In this case it was the hundreds of operators at the BBC.

Notable administration

Clearly, for a company owner, administration is an unpleasant situation to be in.

It is described thus: "When a company or partnership gets into financial trouble an administrator or administrative receiver may be appointed.

"Administrators can be appointed to a company that is unable, or is likely to become unable, to pay its debts. They can be appointed by any of the following:

  • The courts

  • the holder of a qualifying floating charge over the assets of the business

  • the company

"An administrator's primary goal is to rescue the company as a going concern. If this isn't possible, the administrator will try to get a better result for the creditors than would be possible if the company was wound up.

Unfortunately, while the owner and maker of Sadie was distraught that his company went that way - and is now glad that his products will continue within the Prism fold - the way administration is viewed has changed slightly in recent times, especially in other parts of the broadcast market.

A back door escape

Where administration was once the beginning of the end for a company it is now occasionally a way for unscrupulous company owners to rid themselves of debt.

It is totally possible to transfer the assets of a company to another holding business, put a company into administration, not find a buyer, liquidate nothing at all and leave lots of creditors out of pocket as you start a new business, debt free.

Lots of people lose out. The Inland Revenue can probably cope. But there are small supply businesses, leasing companies, stationary providers, catering and cleaning companies, freelancers and lots more that end up out of pocket.

Sensible owners, if they can, pay off the people that are important to them when they start up again. Daft ones leave everyone hanging.

And then there are the staff. They are one of the first groups to suffer as a result of administration. Occasionally creditors get the chance to claw back some of the money they are owed. Staff tend to get diddly squat.

The reason I bring this up is because I believe that there will be a couple of London facilities going into administration in the next couple of weeks. And chances are they will come out it smelling of roses when they re-launch with no debts.

While they may think it is the only way out, I sincerely hope that they consider the impact that the decision will have on all the other people directly and indirectly involved.

Got an opinion on companies going into administration? Have your say below.