Insolvent Company

Discussion in 'Legal' started by Falkirk300zx, Sep 12, 2013.

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  1. Falkirk300zx

    Falkirk300zx UKBF Contributor Free Member

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    Bit of a strange one....

    A company had an unexpected insolvency event in which they owed me £6700 however, I owed them £6600. I was always willing to pay the difference.

    I spoke to the administrators and explained this, they implied 'don't worry, that seems fine'.

    Today I received an invoice from the company who bought them over demanding the full amount, I contacted them and explained the situation but they simply said "We bought the all the money that was owed and you owe us the whole lot", she said she would talk to her boss (i'm not holding holding my breath).

    The CVA has provisionally put in a sum of 23p in the £1.

    I have sought legal advice (still waiting on a reply), but desperately looking for advice/information if this is right!

    Thanks in advance.
     
    Last edited: Sep 12, 2013
    Posted: Sep 12, 2013 By: Falkirk300zx Member since: Mar 20, 2009
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  2. Alan R Price

    Alan R Price UKBF Newcomer Free Member

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    On the face of it the purchaser company bought the debt subject to the same terms and conditions that existed between you and the (now) insolvent company. My view is that set-off/contra still applies and the purchasing company is in no different position from the insolvent company. Set off is mandatory in liquidations and I would hazard a guess there is something in the CVA proposal confirming that the sale rules apply, so the purchaser is up a gum tree.
     
    Posted: Sep 17, 2013 By: Alan R Price Member since: Jul 5, 2010
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  3. Falkirk300zx

    Falkirk300zx UKBF Contributor Free Member

    55 2
    Thanks for the reply.

    My lawyer said that set off should have happened and will be contacting them to ask why but the administrator has simply said:

    "Please be advised that the Joint Administrators are not party to any contracts on behalf of the Company it is deemed that set-off is not applicable in this instance"


    Everything I have read so far says that set-off is a mandatory requirement mostly without exception and I seem to fall under the automatic set-off requirements??

    I don't see how they can do this!!
     
    Last edited: Sep 18, 2013
    Posted: Sep 18, 2013 By: Falkirk300zx Member since: Mar 20, 2009
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  4. Alan R Price

    Alan R Price UKBF Newcomer Free Member

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    Obviously we don't have access to all the facts and documentation here but I cannot understand the administrators' position. It is of course totally unsatisfactory for them to say baldly: "... it is deemed that set-off is not applicable..." and not back up the statement with reasoned argument. Still, you have lawyers acting for you, so no doubt they will advise accordingly.
     
    Posted: Sep 23, 2013 By: Alan R Price Member since: Jul 5, 2010
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  5. Dave Shaw

    Dave Shaw UKBF Newcomer Free Member

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    I think the situation sounds complicated and you should seek legal advice. You mention administration, a CVA and a purchaser of the business and whilst these 3 could all sit together it would be unusual.

    The timing is probably the defining factor in this - the administrators' response could relate to a situation where you recieved the supply post administration and the debt due to you accrued pre insolvency.
     
    Posted: Sep 24, 2013 By: Dave Shaw Member since: Nov 6, 2008
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  6. Falkirk300zx

    Falkirk300zx UKBF Contributor Free Member

    55 2
    Both services were supplied well before administration and the administrator actually acknowledged both the debt and the credit!

    I forgot my brother-in-law's brother worked for Deloitte so I asked him for advice and he is similarly confused but has offered to draft a letter free of charge!

    Lawyer is equally confused as 'insolvency set-off' should have taken place and just supplied the normal lawyer attitude of "remember they have to sue you, just dispute the invoice, it could take years etc"!

    Just have to wait and see what happens!
     
    Posted: Sep 29, 2013 By: Falkirk300zx Member since: Mar 20, 2009
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  7. Falkirk300zx

    Falkirk300zx UKBF Contributor Free Member

    55 2
    An update.....

    Had a chat with a CA specialising in Liquidation and didn't seem surprised that the administrator did this or their attitude about the whole thing. It seems that all the administrator cares about is selling the debt book and the other company only cares about buying it as cheap as possible.

    The current state of play is the company chasing my £6k have been told (on advice) to run and jump and a letter has been sent to the administrator asking why the rules weren't followed.
     
    Posted: Jan 7, 2014 By: Falkirk300zx Member since: Mar 20, 2009
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  8. Ian J

    Ian J Factoring Specialist Full Member - Verified Business

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    It is quite inconceivable that an Administrator can obtain greater title to a book debt than the original company had and they are well aware that all you need to pay them is the £100 difference but they are obviously trying to get heavy handed with you in the hope that you are daft enough to pay them the full amount
     
    Posted: Jan 7, 2014 By: Ian J Member since: Nov 6, 2004
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  9. Falkirk300zx

    Falkirk300zx UKBF Contributor Free Member

    55 2
    Update......

    Today I received a letter from another company telling me the company who are chasing me for this £6000 have themselves just gone into administration.

    Interesting to see if and when I get their letter in regards to this debt.
     
    Posted: Jan 22, 2014 By: Falkirk300zx Member since: Mar 20, 2009
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  10. Falkirk300zx

    Falkirk300zx UKBF Contributor Free Member

    55 2
    Looks like it's all settled now.... hopefully!

    The second company who 'bought' the debt went into administration but another company took them over and guess what? Another demand for £6K.

    I phoned them up and explained the situation, the guy said we need official confirmation that you are both a creditor and debtor. I pointed out that it was recorded within the official paperwork from the original insolvency, in which he replied "Oh... really??". The letter from the CA was resent and I've not heard a word since and I'm assuming that's the matter closed.

    If anyone wants a template of the letter from the specialist CA, then I'll post it up or message me.
     
    Posted: Jun 24, 2014 By: Falkirk300zx Member since: Mar 20, 2009
    #10
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