Can I sue the Director personally

[deepee]

We are owed just short of £1,000 from a company for service supplied. The company Director signed the contract in his name.

The Company, out of the blue, refused to pay their monthly bill with no warning so we are intending to sue but have noticed the Company is in the process of winding up.
We have also discovered, the Director has dozens of companies, lots dissolved,lots new and the actually Company in question is replaced by Company2 Ltd... It really has just got the number 2 added to it.

He is obviously playing the system, so really wondering if I can sue him personally?

 

[Lisa Thomas]

When you say he signed the contract in his personal name, was the contract in the name of the Company or in his personal name?

If the former there will be nothing you can do personally unless you can prove you have in someway been defrauded by him. Other than that only the Liquidator can bring claims against the Director personally if he has committed misconduct.

Sorry!

 

[The Sheriffs Office]

As above, if he signed as a Director of the Company then it is the Company that is liable and your debt remains with that.

All very frustrating I'm afraid.

 

[deepee]

Very frustrating, we have been totally scammed. If the company is in the process of being wound up, does that mean it is still active until it has been wound up?

What if I can prove the Director has setup other companies with the same name but a digit added?

Finally, when we called to request payment, the Director made some serious threats, could this be used if needed? It was a recorded conversation.

It seems ironic someone can set up a business, rip you off then wind up and setup another company with the same name bar a digit?

 

[ethical PR]

did you credit check the company before you started working with them. If not why did you offer them credit?

 

[The Byre]

The number of people who blindly enter into agreements and hand out credit willy-nilly to obvious fraudsters (when checking on these things is just a click or two away!) never ceases to amaze me!

 

[deepee]

The number of people that make assumptions based on no evidence never ceases to amaze me either..!

Yes, they were credit checked 5 years ago when the contract was signed, they were not credit checked again last month when they decided not to pay their bill however, neither of these response really helps.

 

[Mark T Jones]

The number of people that make assumptions based on no evidence never ceases to amaze me either..!

Yes, they were credit checked 5 years ago when the contract was signed, they were not credit checked again last month when they decided not to pay their bill however, neither of these response really helps.

Sadly you have been taken. Other than ensuring you are registered as creditors there is little you can do

There are forums on this site which actively promote this type of conduct

Whilst you say those responses don't help, you really should embed frequent checks in your process ( did you never pick up that the director had multiple directorships?). Classic long firm fraud revolves around building confidence without checks - this isn't fraud but it uses the same principles.

 

[The Byre]

The number of people that make assumptions based on no evidence never ceases to amaze me either..!

Yes, they were credit checked 5 years ago when the contract was signed, they were not credit checked again last month when they decided not to pay their bill however, neither of these response really helps.

There is a great deal more to due diligence and the monitoring of customers on credit, than just credit checks. Opening and closing multiple companies is a huge warning sign of a fraudster.

There are forums on this site which actively promote this type of conduct.

I have no respect for those who think they can hide behind the Ltd structure to run away from their obligations.

 

[deepee]

If the company is in the process of being wound up, does that mean it is still active until it has been wound up? Does this mean I can still sue the company until it is fully wound up? When is the cut off date?

 

[STDFR33]

If the company is in the process of being wound up, does that mean it is still active until it has been wound up? Does this mean I can still sue the company until it is fully wound up? When is the cut off date?

If you sued the company, would it have any means to pay?
Would you continue to throw good money after more than likely, bad money?

For the amount involved, even though it leaves a bitter taste, it's probably best to move on.

 

[14Steve14]

Whilst I feel for you, some people are fully aware of how the Ltd comapny system can be used to avoid paying debts, and your debtor could be one of those. The long string of previous companies should have been a warning.

Before taking any further action sit down and think it through. Any legal action is going to cost you money, so make sure that who ever you are planning to take to court, the company in this case, has the means to pay should you win. You will need company assets which may or may not have been sold to the new company, or money in a bank account that will still be there if you win. You will also have to do it before the company ceases trading.

What did the contract say about non payment and who the goods/service belong to in the event of non payment.

Personally I would waste little time in chasing someone who probably knows how to avoid your debt. Learn from this and put in place systems to prevent, or at least lower the risk from it happening again.

 

[SamStones]

As has been said by 14steve14 above, don't bother chasing this unless you're sure the original company had the money and will pay- use the time to improve your systems so this doesn't happen to you again.

You said you've worked for them for 5 years and reference monthly bills, so if you've had £1,000 / month out of them for 5 years consider yourself lucky- the profit from some previous months has paid for this unpaid bill.

As a mate of mine says: "that's £1,000 of experience you've bought".

 

[Lisa Thomas]

Very frustrating, we have been totally scammed. If the company is in the process of being wound up, does that mean it is still active until it has been wound up?

It depends whether it is a Compulsory Liquidation and the petition has already been served.

What if I can prove the Director has setup other companies with the same name but a digit added?

A person can be a Director of as many companies as they like unless they have been disqualified or Phoenix regulations have kicked in due to a previous Liquidation.

Finally, when we called to request payment, the Director made some serious threats, could this be used if needed? It was a recorded conversation.

Only from the point of reporting him to the police - that won't get you your money back I'm afraid.

It seems ironic someone can set up a business, rip you off then wind up and setup another company with the same name bar a digit?

As the Company has not yet been Liquidated the Phoenix Regulations won't yet kick in.

I appreciate this will leave a sour taste in your mouth but I doubt very much that the Director has personally set out to lose his business and Liquidate just to avoid paying your debt. There will be other factors involved and as the Company is insolvent they will have had no choice but to Liquidate.

 

[Lisa Thomas]

If the company is in the process of being wound up, does that mean it is still active until it has been wound up? Does this mean I can still sue the company until it is fully wound up? When is the cut off date?

There would be no point - you will merely rank as a unsecured creditor in the Liquidator, which you will anyway without a CCJ.