Liquidation Fraud.

[B16JOP]

We are a Limited Company who are owed some £200,000 by a company we did work for. (Limited). If we do not get this money we shall have no alternative but to cease trading but the debtor has offered £30,000 says that if we pursue the debt in court he will liquidate and we get nothing. Is there any way we can pursue the full amount and prevent him liquidating?

[bovine]

if he is suggesting liquidating, then presumably his company doesnt have the assets to cover your debt. He may simply not be able to pay - not good news for you.

Take the £30,000 then pursue for the rest and see what happens. But make sure the payment isnt in full and final settlement. If he liquidates you may get something back, but its really going to depend on what type of business it is, how much debt it has and what assets it has.

Maybe you can get one of the creidt checking companies to give you more information on their current financial status (im not really sure how much information this kind of thing will give you, but im sure someone here can help with that).

[lucy*tenable]

We are a Limited Company who are owed some £200,000 by a company we did work for. (Limited). If we do not get this money we shall have no alternative but to cease trading but the debtor has offered £30,000 says that if we pursue the debt in court he will liquidate and we get nothing. Is there any way we can pursue the full amount and prevent him liquidating?

If you would like me to have a look into the company feel free to PM me the details and i can have a look for you. Obviously this will be done by PM / email and won't be posted on the site.

I am also going to have a word with my legal guy to find out where you stand (he's in a meeting at the mo) so i'll post back shortly.

Youn can email me at lucy.auty@tenable-solutions.co.uk

[JGOffshore]

We are a Limited Company who are owed some £200,000 by a company we did work for. (Limited). If we do not get this money we shall have no alternative but to cease trading but the debtor has offered £30,000 says that if we pursue the debt in court he will liquidate and we get nothing. Is there any way we can pursue the full amount and prevent him liquidating?

Sounds as if the company is insolvent as it cannot pay its debts. It might be worth your while putting them into liquidation yourself and making sure the insolvency practitioner sets up a creditors committee. Then you/they can look to see if the company has been trading whilst insolvent. If it has then the directors can be held personally liable for the debts of the company.

[JGOffshore]

Take the £30,000 then pursue for the rest and see what happens. But make sure the payment isnt in full and final settlement. If he liquidates you may get something back, but its really going to depend on what type of business it is, how much debt it has and what assets it has.

I can't imagine they will pay other than on the basis of "full and final". It looks like you either go down the route I outlined above of take the £30k and forget the rest.:mad:

[lucy*tenable]

If the debtor is truly insolvent and the case is a ‘can’t pay’ rather than ‘won’t pay’ situation then you may have no alternative but to allow the company to enter liquidation. Accepting the £30,000 may be your best option, though I would not advise to allow this to be in full and final settlement, you should accept the payment as a deposit for the rest.

If the company is not insolvent and simply won’t pay, then you should take them to the civil courts. A county court claim would be cheapest, but they do not have the legal authority to enforce judgments of over £5,000. If the company is not insolvent, then any IP they approach is under an obligation not to allow the company to be liquidated. Though the definition of this legal point is quite wide. You could try a solicitor’s letter of claim, which is the beginning point of any claim to ascertain what their response is when actually threatened by

If the company is insolvent, then it would be a false economy to bring a claim through the civil courts, as you would come to costs that would not get you anywhere.

A good way to ascertain as to whether the company is insolvent or not is to check their companies house accounts, which are public information. Also obtaining a credit reference for them is a very good indication. As i mentioned previously if you PM me the company name i can investigate the company finances to help you come to an educated guess as to the company’s potential technical insolvency.

I would be wary in this situation, if the company is truly insolvent, how does it have access to £30,000 immediately?

[Ian J]

If the company is not insolvent, then any IP they approach is under an obligation not to allow the company to be liquidated. Though the definition of this legal point is quite wide.

A company is insolvent if it's unable to pay it's debts on the due date therefore this company has already declared that it's insolvent.

I have a rather jaundiced view of insolvency practioners as most would rather perform some sort of insolvency action than tell the company to carry on otherwise they wouldn't be in a position to receive their lucrative fees.

A good way to ascertain as to whether the company is insolvent or not is to check their companies house accounts, which are public information. Also obtaining a credit reference for them is a very good indication.

In most cases (especially the SME sector) the published accounts are so far out of date as to be virtually worthless and I don't see the point of taking out a credit reference when it looks like the opening poster is one of the major creditors and cannot get paid.

[Ian J]

What kind of work did you do and is it repossessable ?

[B16JOP]

It was building work so not repossessable.
Thank you everyone for your replies - very interesting reading.

[Dave Shaw]

If the debt is not disputed then you may be able to issue a Statutory Demand for the debt - which should be very cheap to do and may crystalise their thoughts.

Obviously without further information it is difficult to judge whether they are trying it on or not - a credit check may identify other issues such as CCJs, but it may not.

As pointed out the company has admitted that it is Unable to Pay its debts as they fall due and as such is insolvent. If you have doubts you could take the matter into your own hands and seek the appointment of a liquidator or administrator.

This would give you control but would have some cost implications. There is also no guarantee that the outcome will give a better return than the offer on the table.

You may also be able to get an enquiry agent to investigate and try to find out what assets the company has but there are cost impliactions of this.

It may also be possible with the customers agreement for an investigation as to the financial position of the company to be undertaken - i.e. a firm of accountants go in and report to you whether the deal is a good one and whether there any alternatives. If the customer is not willing to let you do this then it would imply they have something to hide. Again there are cost impliactions of this but it may be something that can be met by the customer through negotiation.

Dave

(http://www.totalitysolutions.com)

[SteveN20]

I'm following this thread with interest - I have a similar (although significantly smaller sum involved) situation. The point made about data from Companies House being largely useless is a good one. It seems very difficult to locate accurate, up to date information on companies financial/trading claims without spending more money, with no guarantee of any return at all.

Good luck with it.

Steve.