Succession
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#1: Succession Author: Alison HLocation: Manchester PostPosted: Wed Jun 27, 2007 10:24 pm
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I was going to put this in Joey's Trunk, but it's more a vague waffly thought than anything else Embarassed . Although we're not told very much about the business side of the school, from what I gather the business was incorporated at some point, so by the end of the series it was a limited liability company, with Madge having a majority shareholding (presumably at least 75% to make it easy for her to pass special resolutions and other "exciting" things vaguely remembered from company law exams!) and Joey, possibly Dick, and various mistresses holding the rest of the shares in unspecified proportions.

The fact that Mlle Lepattre was originally Madge's business partner seems to get totally forgotten about as there's never any mention of the Lecoutiers or anyone else who might've inherited Mlle's part of the business being involved Confused .

Anyway, the point was that I was wondering if anyone had any thoughts on what Madge might've done if she decided to retire from involvement from the school altogether - would she've split her shares 6 ways between her children, given them to David as the eldest, given them to Sybil as she was the eldest girl and David would presumably have inherited the San, possibly given some of them to Joey, sold up, or anything else?

Sorry, that was very waffly Embarassed . I possibly need to go to bed as it's nearly half 11!

#2:  Author: PadoLocation: Connecticut, USA PostPosted: Thu Jun 28, 2007 1:00 am
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Perhaps Mademoiselle signed over her shares to Jem in return for her care at the San?

#3:  Author: TiffanyLocation: Is this a duck I see behind me? PostPosted: Thu Jun 28, 2007 2:35 pm
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Hmmmm.... Madge didn't like any of her daughters much, did she? So she might have wanted to split her shares between Dick and Joey, or Miss Annersley and Miss Wilson, or something like that.

I don't think Jem would have let her relinquish her shares, though. If she didn't want voting rights, etc, that's one thing, but it was a prospering business, so I imagine the shares would have been kept on and inherited by whoever inherited their estate.

#4:  Author: JayBLocation: SE England PostPosted: Thu Jun 28, 2007 3:49 pm
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There would have been tax considerations if Madge had just handed over her shares. I don't think she would have considered doing it until a good many years after the end of the series. She was still a relatively young woman (about the same age as Nell and Hilda, and they were showing no signs of retiring).

Of her children, Sybil and Josette were in Australia and therefore couldn't play any hands on part in the management of the school. Ailie and the twins were still at school and underage; the shares would have to be held in trust for them until they came of age. And aren't K&K destined for the army and the navy? They wouldn't be around much to make decisions.

If Madge hangs on to her shares, by the time she's in her seventies, the Russells' financial position will probably have changed a lot. TB treatment in sanatoria was on the way out in 1958, the year in which Prefects should take place. The San will either have been wound up or have diversified, perhaps into a private nursing home, by the early 60s. There might not be much left for David to inherit; the School might be Jem and Madge's primary asset.

By that time, of course, it won't be of such personal importance to Madge. All the staff she knew well and worked with will have long retired.

Madge's children will probably be established in careers and/or financially secure by that time, but there will probably be grandchildren approaching adulthood. (Were Sybil or Josette about to produce by the end of the series?) So, (having thoght this out as I've been typing) I think that in the end Madge might set up a trust fund for her grandchildren, to pay for their education and training, or enabling them to travel, or giving them a start in life by helping them buy their first house or flat.

#5:  Author: RobLocation: Currently in a rainstorm PostPosted: Thu Jun 28, 2007 6:33 pm
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Hmmmm ... interesting question.

Re - Mlle Lepattre
REASONED ARGUEMENT:
I seem to recall that Mademoiselle Lepattre said that she didn't want anything out of the school except for Simone and Renee's education. I've always assumed that this meant she didn't receive a salary, however she must have had some money, even if it was just to buy incedental things like stamps or to pay her train fares when she returned to Paris to visit her family? Presumably she wasn't independently wealthy since she wanted the Lecoutiers education in return for working at school, so perhaps it meant she didn't want anything out of the school in the way of dividends?

MORE LIKELY REASON:
EBD forgot that Mlle was supposed to have put money into the school.

Re - Madge's shares
REASONED ARGUEMENT:
I think Madge is unlikely to relinquish her shares in the school before she died as she remained very proud of her school, even in the glimpses of her that we have in the later Swiss books. I think this is unlikely to change even when she doesn't know the staff as well; admittedly this might mean that she was less actively involved in the running of the school but after she went to Canada, she didn't seem very involved - certainly in a physical sense - anyway.
After she was gone bawling presumably unless she specifically bequested them to someone else, they would have gone to David. I'd like to think that she'd have split them between Sybil, Josette and Ailie. I don't think that the fact that Sybs and Josette are in Australia should have made a difference - after all, for many years the main branch of the school was in Switzerland, whilst Madge lived primarily in Britain!

MORE LIKELY ANSWER:
Had EBD decided to remove Madge from the picture (either through her death or her 'retirement') I'd imagine the shares would have ended up with Joey Rolling Eyes ... unless David's wife (Mrs Mary-Lou Russell perhaps Laughing ) was considered equally suitable!!

#6:  Author: Alison HLocation: Manchester PostPosted: Thu Jun 28, 2007 9:15 pm
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I feel quite ill at the thought of Joey and Mary-Lou having control of the school Laughing ! I'd much rather see Sybil and Ailie (Josette was too "good") take control and shake everything up Wink .

#7:  Author: MiaLocation: London PostPosted: Thu Jun 28, 2007 10:22 pm
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JayB wrote:
There would have been tax considerations if Madge had just handed over her shares.


OMG, this is so sad, but I think she would have been OK taxwise because this would be pre-gifting - Alison am I right? You are so much more knowledgable than me Very Happy


Last edited by Mia on Fri Jun 29, 2007 9:52 am; edited 1 time in total

#8:  Author: Alison HLocation: Manchester PostPosted: Fri Jun 29, 2007 7:02 am
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Laughing So long as the school classed as a trading company, it should've been OK Very Happy .

#9:  Author: Fiona McLocation: Bendigo, Australia PostPosted: Fri Jun 29, 2007 9:41 am
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I always thought so long as something is bequeathed at least 7 years before you die no death tax is paid on it.
I always thought the school would have been bequeathed to Aile, Josette and Sybil as it's very much Madge's business whereas the San would be given to David, Kevin and Kester. I could also see Ailie having the controlling voting power as she is on hand and not on the other side of the world

In regards to Mademoiselle, I actually wonder once Madge retsarted the school in Guernsey did she do under her own steam or was it considered a continuation of the old one? They did sell the school buildings to Mr Flower so presumably the money would have been divided between Madge and Mademoiselle then unless they held onto it for restarting it again. And in that case I could see Mademoiselle's share going to Simone and Renee

#10:  Author: Alison HLocation: Manchester PostPosted: Fri Jun 29, 2007 9:58 am
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No inheritance tax if you survive at least 7 years after making the gift, but none anyway if it's a qualifying business asset. No capital gains tax payable immediately if it's a gift of a qualifying business asset/various conditions are met, and you claim gift relief.

*Ponders various tax implications of other CS-related matters.*

I really am a very sad individual ... Laughing

I like the idea of Ailie running the school Very Happy .


Last edited by Alison H on Fri Jun 29, 2007 9:59 am; edited 1 time in total

#11:  Author: CarysLocation: London PostPosted: Fri Jun 29, 2007 9:58 am
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Imagine if Mademoiselle's will was discovered in a Paris solicitors after the war, which revealed she had left her share to Simone and Renee. Theoretically Simone would then have more power than Joey-maybe that is why EBD convieniently forgot about Mademoiselle's share?

#12:  Author: MelLocation: UP NORTH PostPosted: Fri Jun 29, 2007 10:54 am
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Madge must have agreed to Mlle's initial idea that she was happy with expenses and tuition for Simone and Renee but surely when the school became sucessful she would have the honesty and integrity to insist on half shares? Apparently not! What a canny and ruthless business woman EBD made her out to be.

#13:  Author: jenniferLocation: Taiwan PostPosted: Fri Jun 29, 2007 11:28 am
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My impression was that the initial capital came from the Bettanys' (from selling their house), while Mademoiselle provided mainly ballast, in the form of maturity, and needed teaching skills.

I wonder how much actual decision making Madge was doing in the later years - she's in Canada for two years, there's an extended trip to the US in there, and then Australia, and two of the school branches are in Switzerland. Communication was a lot slower then - telephone calls were a chore, and no video conferences.

I could see having an annual board meeting in England once a year during the long holiday, consisting of Madge, the heads and secretaries of each of the three branches (Glendower, Welsen and the main branch), plus a solicitor and an accountant, both hired to handle the larger scale finances and planning required in the school, and maybe an educational consultant or two. They could then make decisions on curriculum, number of new students to admit, major changes in policy, new hiring needs, renovations and expansions, etc. Madge would have final veto power, but would pretty much rubber stamp academic policy decisions, but be behind things like changing the uniform, or moving back to Europe.

I can't see deciding school policy such as course offerings or new hires based on votes by share, particularly when a number of the people owning shares don't have backgrounds in finances, management or education (*cough* Joey).

#14:  Author: TanLocation: London via Newcastle Australia PostPosted: Fri Jun 29, 2007 11:37 am
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I think Mademoiselle did receive some earnings from the company. I seem to remember a vague mention in one of the Tyrol books about a small, steady income was paid to the partners ...

#15:  Author: JennieLocation: Cambridgeshire PostPosted: Fri Jun 29, 2007 12:17 pm
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If Madge had died intestate, her estate would have been divided between Jem and her six children. I believe Jem would have inherited the largest number of shares, and the remainder would be divided equally between her children.

#16:  Author: KatarzynaLocation: North West England PostPosted: Fri Jun 29, 2007 12:44 pm
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no, bad idea - agressive take over bid from a disgruntled former chaletian who had been secretly obtianing shares from whereever she could!

#17:  Author: LesleyLocation: Allhallows, Kent PostPosted: Fri Jun 29, 2007 6:01 pm
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Katarzyna wrote:
no, bad idea - agressive take over bid from a disgruntled former chaletian who had been secretly obtianing shares from whereever she could!



Already tried that one! Laughing

#18:  Author: KatherineLocation: London, UK PostPosted: Fri Jul 20, 2007 7:45 pm
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Rob wrote:
Hmmmm ... interesting question.

Re - Mlle Lepattre
REASONED ARGUEMENT:
I seem to recall that Mademoiselle Lepattre said that she didn't want anything out of the school except for Simone and Renee's education. I've always assumed that this meant she didn't receive a salary, however she must have had some money, even if it was just to buy incidental things like stamps or to pay her train fares when she returned to Paris to visit her family? Presumably she wasn't independently wealthy since she wanted the Lecoutiers education in return for working at school, so perhaps it meant she didn't want anything out of the school in the way of dividends?

I was reading School At the other day and pondering this. Mademoiselle must have had something for her own general living expenses. So perhaps the point about not wanting dividends is right. And if she didn't put up her own money then it seems fair that she got a salary.

I imagine that the Russells/San paid for her once she was ill. Or perhaps she had savings as she wouldn't have had much to spend her money on at the Tiernsee. Not that I imagine they were paid that much and medical care would eat money. I reckon the Russells would have seen it as their job to look after her.

Tan wrote:

I think Mademoiselle did receive some earnings from the company. I seem to remember a vague mention in one of the Tyrol books about a small, steady income was paid to the partners ...


I don't remember this but that means nothing of course. There are a couple of point where EBD talks about Joey's money (eg the talk at the start of Althea and I don't recall anything there. But if the school was started with Bettany money then it was Joey's Madge's and Dick's (assuming Mdlle put up no capital)

I wonder how they split the profits. If we assume that according to the parents' will the money was split equally three ways than you could argue that the profits of the school should have been split three ways. But then Madge was the one who put in all the work and made it was it is (and does Joey get something for being the Spirit of the School !? And a food allowance for all those schoolgirl parties she hosts.)

And I wonder what Dick made of Madge using 'his' money to fund her school. (At least I think she put in all three's money) What if he'd wanted it out in India? Of course it all worked fine for him and he got plenty of free schooling out of it in the end.

#19:  Author: TanLocation: London via Newcastle Australia PostPosted: Fri Jul 20, 2007 8:12 pm
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I haven't got 'School At' close at hand which outlines the financial arrangements. I think it was the money that all three received - I imagine that Joey's share would have been a trust arrangement?

I don't remember the exact agreement that Madge and Mademoiselle made. However, I have found the quote - it is from the New Chalet School and does suggest that Mademoiselle had a financial interest. So what did happen to this when she died?

Seven years ago the Chalet School had been started by Madge Bettany - now Mrs Russell - with only eight pupils. During the years, it had grown till it numbered some hundred and sixty girls, and not only paid for itself, but provided a steady if small income for its two partners. Naturally, such a school cost much to keep going and up to date.

#20:  Author: KatherineLocation: London, UK PostPosted: Fri Jul 20, 2007 10:30 pm
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Quote:
We are orphans, with a sister twelve years younger than ourselves to be responsible for . . . Between us we seem to have some fairly decent furniture, this house, and three thousand pounds in East India Stock at four per cent.—or something over a hundred pounds a year.’
‘Twenty over,’ interjected Dick.
‘We can’t live on that in England,’ she went on, unheeding the interruption.

Interesting. At the start of that 'we' refers to Dick and Madge as the responsible people. By the end it's 'we', meaning Madge and Joey who can't live off 120. Rather implies Dick won't be needing the money - perhaps as he is seen to be more capable than Madge of earning.

#21:  Author: KBLocation: Melbourne, Australia PostPosted: Sat Jul 21, 2007 12:13 am
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Tan wrote:
Seven years ago the Chalet School had been started by Madge Bettany - now Mrs Russell - with only eight pupils. During the years, it had grown till it numbered some hundred and sixty girls, and not only paid for itself, but provided a steady if small income for its two partners. Naturally, such a school cost much to keep going and up to date.


Of course, that assumes that Mademoiselle was the other partner. It could have been Dick.

As for Mademoiselle when she is ill, there is this quote, also from New:

Quote:
'But, Hilda, what will Mademoiselle do? We all know here that she has nothing but what she earns. And then, she has helped her cousins, the Lecoutiers.'
'We needn't trouble about that, said Miss Annersley. 'The Russells will see that she does not want. And as for the Lecoutiers, Simone will, in two years' time, have finished her course at the Sorbonne, and come here to teach. Renee's education is secured here, of course; and when she is sixteen, she is to go to the Paris Conservatoire for training. Her music is very good. And then Mrs Russell suggests that Monsieur and Madame Lecoutier should take one of those large, chalets they are building on the Sonnalpe and let rooms to visitors. They would be near Mademoiselle - and Simone, when she returns. And there is much need for pensions up there, as you know.'
'That's like Madame,' said Miss Edwards thoughtfully. 'Yes; that would certainly seem to solve all difficulties so far as Mademoiselle and the Lecoutiers are concerned-‘


Actually, the first part of that quote does imply that Mademoiselle is not getting money from the running of the school, but only from the salary she earns as teacher and headmistress.

#22:  Author: Mrs RedbootsLocation: London, UK PostPosted: Sun Jul 22, 2007 1:27 pm
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Katherine wrote:

Interesting. At the start of that 'we' refers to Dick and Madge as the responsible people. By the end it's 'we', meaning Madge and Joey who can't live off 120. Rather implies Dick won't be needing the money - perhaps as he is seen to be more capable than Madge of earning.


Well, that was rather the point, wasn't it? He was about to take up this shiny new job in India, leaving his sisters alone at home. And I don't suppose a young forestry officer earned all that much - he probably couldn't have sent a great deal home, although I'm sure he would have done his best if he'd had to.

From an earlier post:
Quote:
I imagine that the Russells/San paid for her once she was ill. Or perhaps she had savings as she wouldn't have had much to spend her money on at the Tiernsee. Not that I imagine they were paid that much and medical care would eat money. I reckon the Russells would have seen it as their job to look after her.


I'm sure they would - but, of course, one could make an interesting argument in favour of Cornelia Flower's rich father paying all Mademoiselle's expenses as he was so grateful to her for looking after Corney. Bunny treats, anybody?

#23:  Author: jenniferLocation: Taiwan PostPosted: Mon Jul 23, 2007 2:49 am
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Madge does imply that she could support herself on a teaching job, although her choices would be a bit limited as she has no qualifications. It's providing for Joey, who would have school fees, and who tends towards ill health, that's the big issue.

Dick seems to have no trouble a few years later supporting a wife and four children on his salary, though, although maybe he is getting some of the revenue from the school.

#24:  Author: Mrs RedbootsLocation: London, UK PostPosted: Mon Jul 23, 2007 6:50 am
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jennifer wrote:
Dick seems to have no trouble a few years later supporting a wife and four children on his salary, though, although maybe he is getting some of the revenue from the school.


I think it possible that, in that era, men's salaries tended to be increased on marriage, as they were expected to support the family. And since Mollie was the boss' daughter, I dare say her father ensured that Dick kept her in the style to which she was accustomed.....



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