IT IS midday on Friday and I am sitting in a café in Southwark waiting for a box to arrive.
With me are senior figures who worked at transport firm Ruskin Private Hire before being told they, and several hundred others, had lost their jobs after the company went into administration last month.
The box we are waiting for contains evidence; proof of their claim against Croydon Council for £2.5 million compensation and the key to the dispute which brought down their company.
For three years Ruskin officials claimed an indemnity clause in its deal to take hundreds of children to and from school entitles them to be reimbursed after the council terminated its original contract.
The council has spent £35,000 of public money fighting the claim and now Ruskin is convinced the administrators want to obtain the evidence to settle the case quickly and quietly.
Ruskin, which took 252 children to and from school in Croydon – as well as hundreds of others across London – each day, was placed in administration on February 14.
A few days earlier, staff removed evidence relating to its case against the council on the advice of a national journalist, who believed the receivers could be called in to gain control of its claim.
"Sure enough," a senior source told the Advertiser, "the first thing the administrators asked about was those documents. They locked the office down but couldn't find them. They've even been stopping and searching cars coming out of the lot. It's all they seem interested in."
Hence the box is brought from a secret location to the café by foot. As we sift through folders full of balance sheets, invoices and e-mails, another former Ruskin employee says he is convinced the administrators and the council will cut a deal.
"The administrators will settle for enough to cover their costs, but a lot less than the council owes, and then sign a confidentiality agreement and no one will be the wiser," he said.
"Well we don't think that's on. We've seen a well-respected business, which employs hundreds of people, fall apart. People need to know about that."
Ruskin was awarded a contract worth £4.1 million when the council outsourced its special needs home-to-school service in September 2009.
The company then received a tip-off from a source within the authority who was concerned that a Sutton Council officer advising the authority about the new-look service had left his job to join the company that had won the largest contract.
"We contacted the council and said we weren't going ahead," said the source. "We were assured that there was nothing to worry about. After a long meeting we agreed to move forward as long as an indemnity agreement in the contract was in place."
That clause is the basis of the legal dispute between the council and Ruskin. The Advertiser has seen a copy of the contract and it states the authority is liable for losses accrued by the company if the deal is terminated.
A senior figure at Ruskin said: "There had been a big capital investment in Ruskin – the depot, staff costs, vehicle hire – and the clause entitled it to be indemnified for all those costs if there was an early termination.
"There was a standard agreement in all the contracts but we wanted ours to be tougher because of the concerns we had."
The Advertiser has obtained e-mails in which the council's external solicitor DMH Stallard accepts Ruskin's indemnity. Its defence is now that another clause in the contract means it is not liable for "third party" losses, an interpretation Ruskin believes is not valid.
In March 2010 auditors Deloitte found "elements of non-compliance" in the way the new service had been set up. Two senior council officers were suspended for gross misconduct. One later resigned. The contracts were terminated by the council and put out to tender again.
When they were re-awarded in January 2011, Ruskin lost the majority of its routes, meaning a significant proportion of the investment it had made was wasted. Its bank, Aldermore, then started to question the validity of its new deal with the council.
"They weren't happy with how the council could just change the contract, they felt it wasn't worth the paper it was written on," said ex-senior manager at Ruskin.
"Normally having a local government contract is one of the strongest assurances a company can have, but in this case they deemed a contract from Croydon had no value.
"We repeatedly raised the indemnity with the council but they kept putting us off."
Pressure from the bank and its creditors took its toll. By last summer Ruskin had four mortgage charges and five County Court judgements against its name.
In August a winding-up petition was issued, which the HRMC agreed to adjourn while the dispute was worked out.
The company had already handed the council two files of evidence detailing the costs it had incurred as a result of the decision to re-tender. In November, frustrated by the lack of progress, it reluctantly lodged a claim with the High Court.
In January DMH Stallard sent a strongly worded letter to Ruskin claiming the case was motivated by the company's financial problems. It said the council had incurred legal costs of £34,788.50 plus VAT in relation to the claim and demanded the company cover the amount.
Meanwhile Ruskin was having weekly meetings with its financiers, who continued to demand information about the claim.
Last month the bank's patience ran out and the administrators FRP Advisory were sent in. A deal to save the company fell through and around 300 people lost their jobs.
With the claim having legally passed to the administrator, the box is all Ruskin has left.
Owner: Legal barrier to shedding light on closure THE former owner of Ruskin Private Hire has expressed his frustration after being banned from speaking about his company. Chief executive Roger Lynch promised in last week's Advertiser to tell the full story behind its downfall, only to be forbidden by the administrators. Commenting on this week's revelations, he said: "I have been made aware of certain comments that have been made following the closure of Ruskin Private Hire. "I have said before that Advertiser readers will be given further information on why the company closed and I would love to be able to do that. "Unfortunately, at this point in time, I cannot make any further comment as I have received a letter from the administrator's solicitors prohibiting me from doing so. "For the moment I offer my personal apology to all those affected by this situation – parents, staff and, most importantly, the children we transported for many years." Council: 'We have no choice but to fight this' THE council said Ruskin Private Hire's case "lacks validity" and defended spending thousands of pounds on legal fees. A spokesman said: "Ruskin has brought a high value claim against the council despite what we have said to them about its lack of validity at all stages including before they brought it. "Although neither the council nor its legal advisers consider the claim has merit there is no option but to defend the position unless Ruskin withdraws as we cannot prevent parties from bringing claims if that's what they decide to do "The council cannot legally use public money to settle a claim it considers invalid. "We have engaged with Ruskin at all times, have been entirely open with them and sought to explain clearly and carefully to them why this claim really ought not to have been brought. "We have also set out to them the evidence and detail which would be required to prove any validity to the claim." Firm came close to taking Ruskin over A DIRECTOR of the firm interested in taking over Ruskin Private Hire after it went into administration has described the company's downfall as a "grave concern". Medical Services Ltd had all but agreed a deal only to be told by the administrators they had run out of time to have things set up for the end of half-term. The company is backed by Falck, a Danish firm which is one of the largest suppliers of emergency medical services in the world, operating in 43 countries. Joe Sheehan, managing director of Medical Services, said it had signed a confidentiality agreement with administrators FRP Advisory not to discuss details of the process. But, speaking in a personal capacity, he told the Advertiser that Ruskin and its chief executive Roderick Lynch (also known as Roger) had been dealt a rough hand. He said: "I think what has happened to him, his company and his employees, is of grave concern. "Over the years he has played a part in developing legislation and improving accessible transport for adults and children against the odds and in very difficult economic times. "He built a successful business, brought employment to south London and was a well-regarded figure in the community. "If Roger had as much access to accountants and lawyers as big corporates do, he would still be in business. London needs more organic businesses like his." Both sides believed a deal could be done only for FRP Advisory to call a meeting on February 21, a week after they had been called in, to announce the company had ceased trading and about 300 staff had lost their jobs. Some drivers and guides joined replacement firms called in by the council but many did not. Among those that did, at least a dozen are considering legal action, backed by two unions, after being offered reduced hours and changed terms and conditions. A spokesman for FRP Advisory said: "Despite some expressions of interest for the business and assets of the company, regrettably a solution could not be found. "The joint administrators had no alternative but to cease the trading of the company and to make redundant the staff of the company." Council officer resigned after his concerns were ignored THE senior council officer who resigned because of his misgivings over how the school service had been outsourced later wrote a signed statement in support of Ruskin Private Hire. In the document, obtained by the Advertiser, the senior transport officer said he and others in the department did not believe the decision would lead to any savings. He was alarmed when Olympic (South) Ltd won contracts despite their bid being higher than its competitors and further concerned when Sutton's Michael Lawrence, who advised on the procurement process, joined the company as a director. "I told senior management about my concerns but my warnings were not heeded," he wrote in the statement. "I then took it higher and sent an e-mail to Alison Critchley, who was then the director responsible. Alison was not interested either and replied that, having investigated, there was nothing to worry about. "A further e-mail to Jon Rouse, the council's chief executive, was similarly rebuffed. "I was extremely frustrated at the council's failure to look into what I believed were genuine concerns about the whole procurement process and therefore I felt that I had no other option than to resign." A subsequent investigation revealed his concerns had been well-placed. Two senior officers were suspended and the contracts later re-tendered.