Obligation to notify creditors CVL ?

Discussion in 'Insolvency' started by Simon Morris 1977, Feb 22, 2018.

  1. Simon Morris 1977

    Simon Morris 1977 UKBF Newcomer Free Member

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    1 year ago we paid a deposit to a catering company for a wedding in January 2018. The company was run by a husband and wife. The husband was the sole director of the company, while the wife took care of running the business and booking events.

    The marriage broke down and the husband placed the company into creditor voluntary liquidation in November 2017.

    Although the husband was the director of the company, he did not maintain any financial records and as a result I was not notified that the company was in liquidation.

    The wife continued to trade under the same business name after liquidation and solicited the balance of the payment before the wedding to a different bank account and then failed to show up to the event.

    If I had known that the company was in liquidation, I would not have made the final payment.

    Looking deeper into the situation it appears that the wife has a string of unsatisfied CCJ’s against her name and is claiming that she has no money or assets. I think if I brought a claim against the wife, she will never pay.

    Before taking this to small claims court, I am trying to establish if my argument is reasonable against the husband to claim for our loss.

    As a company director the husband had a duty to maintain financial records including maintaining a list of deposits paid into the company for future events. If he kept to his legal duty, he would have known that I was a creditor of the company and subsequently would have notified me of the meeting of creditors. Because of his failure, I subsequently was defrauded by his wife.
     
    Posted: Feb 22, 2018 By: Simon Morris 1977 Member since: Jun 9, 2016
    #1
  2. Mr D

    Mr D UKBF Legend Free Member

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    Wife continued to trade under limited company name or just using the name without limited?
    Either way sounds like each of them failed in their duties.

    Your claim is against the limited company - the protection of the limited company would have to be removed before you could claim against the individuals.
    The company is now dissolved? Or still active?
    And do you want to spend the money to wind it up in order for directors conduct to be investigated?
     
    Posted: Feb 22, 2018 By: Mr D Member since: Feb 12, 2017
    #2
  3. Simon Morris 1977

    Simon Morris 1977 UKBF Newcomer Free Member

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    The wife continued to trade using the company name dropping the limited.

    The company is currently in liquidation - not active.

    I am trying to establish if I can claim against the director personally for his failure in duties as a director of the company.
     
    Posted: Feb 22, 2018 By: Simon Morris 1977 Member since: Jun 9, 2016
    #3
  4. Mr D

    Mr D UKBF Legend Free Member

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    So the wife used a different business. Not using the limited company.
    Therefore sole trader - and you can go against her personally. As you say though the chances of you getting money...

    The husband, first you would have to remove the liability shield of the company - who is liquidating the company? An insolvency practitioner?
    Need to check with them if they have you as creditor.
     
    Posted: Feb 22, 2018 By: Mr D Member since: Feb 12, 2017
    #4
  5. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

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    I think the only way you could claim against the male Director for the deposit is if you can show fraud occurred.

    http://www.legislation.gov.uk/ukpga/1986/45/section/207

    However if such a claim existed the Liquidator is probably best placed to take this claim and depending on the sums involved is unlikely to do so.

    Have you passed your concerns to the Liquidator (if they are still in office?)

    The balance seems to have been paid to the wife so I suspect your claim would be against her personally for the balance.

    You might want to consider a Court claim against her here:

    https://www.gov.uk/make-court-claim-for-money

    Easiest/best result might be for you to initially try and get the money back from you bank under S.75 of the Consumer Credits Act.
     
    Posted: Feb 22, 2018 By: Lisa Thomas Member since: Apr 20, 2015
    #5
  6. Big G

    Big G UKBF Regular Free Member

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    Unfortunately the limited company is liable for this debt and it is not up to you as a creditor to raise action against the directors. This is something that the liquidator or insolvency service will do on behalf of creditors if they feel that they can prove some sort of fraudulant trading but it is very rare that this will be done unless the fraud is very high.

    Sorry but the only thing left to do is contact the liquidator that was appointed.
     
    Posted: Feb 22, 2018 By: Big G Member since: Dec 15, 2010
    #6
  7. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

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    I have to disagree with Big G (sorry!) as the balance was not paid to the Ltd Company, it was paid to the wife.
     
    Posted: Feb 22, 2018 By: Lisa Thomas Member since: Apr 20, 2015
    #7
  8. Big G

    Big G UKBF Regular Free Member

    408 99
    No need to apologise Lisa.. You are right to disagree as I have read it again and appear to have completely missed the following paragraph :

    "The wife continued to trade under the same business name after liquidation and solicited the balance of the payment before the wedding to a different bank account and then failed to show up to the event."

    Under the circumstances it is the wife who is liable for the payment and you should definitely pursue her for the same.

    Apologies for not reading the first post properly!!
     
    Posted: Feb 22, 2018 By: Big G Member since: Dec 15, 2010
    #8
  9. Simon Morris 1977

    Simon Morris 1977 UKBF Newcomer Free Member

    12 1
    Hi Lisa,
    Tnx for your reply.
    I believe that fraud did occur by the female (non director). I am not sure if the husband had any knowledge of the activities of the company. The liquidator is not overly keen to take any action as the sums involved are not big (£3k) and the company had no assets to liquidate.
    So from what I understand even-though the male director failed in his duties as a director, he is still protected by the veil of the company and only the liquidator can take further action if he/she is motivated to do so?
     
    Posted: Feb 22, 2018 By: Simon Morris 1977 Member since: Jun 9, 2016
    #9
  10. Big G

    Big G UKBF Regular Free Member

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    Yes Simon that is correct however, as the funds were paid directly to the wife in to a different bank account than the Ltd Co then you have a right to demand the return of this payment.
     
    Posted: Feb 22, 2018 By: Big G Member since: Dec 15, 2010
    #10
  11. Mr D

    Mr D UKBF Legend Free Member

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    Actually getting the money when she has other CCJs that she doesn't pay....
    To be fair, after the first CCJ is there really a threat to the person?
     
    Posted: Feb 22, 2018 By: Mr D Member since: Feb 12, 2017
    #11
  12. Simon Morris 1977

    Simon Morris 1977 UKBF Newcomer Free Member

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    Not sure if worthwhile paying for the small claims process if she is just going to ignore the CCJ. I think I will report her to the police for fraud and cut my losses.
     
    Posted: Feb 22, 2018 By: Simon Morris 1977 Member since: Jun 9, 2016
    #12
  13. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

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    The police will not be interested in fraud - it will be a civil matter.

    How much were the payments?
     
    Posted: Feb 22, 2018 By: Lisa Thomas Member since: Apr 20, 2015
    #13
  14. Simon Morris 1977

    Simon Morris 1977 UKBF Newcomer Free Member

    12 1
    £1500 deposit (pre liquidation) and £3000 balance paid to the wife (post liquidation)
     
    Posted: Feb 22, 2018 By: Simon Morris 1977 Member since: Jun 9, 2016
    #14
  15. ethical PR

    ethical PR UKBF Legend Free Member

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    Have you run a credit check on her. If she has any assets such a property you could get a charge against it, if you take her to court and she doesn't pay.
     
    Posted: Feb 22, 2018 By: ethical PR Member since: Apr 19, 2009
    #15
  16. Simon Morris 1977

    Simon Morris 1977 UKBF Newcomer Free Member

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    From the checks I did, she had no assets in her name. The house is in the name of the husband.
    Assuming I did get a judgement against her, can a hold be put on bank accounts ? How hard do the bailiffs try and seize assets? My concern is that she already has 2 unsatisfied CCJ's and 4 CCJ's against a company she is a director of. She doesn't seem so concerned about the court judgments.
     
    Posted: Feb 22, 2018 By: Simon Morris 1977 Member since: Jun 9, 2016
    #16
  17. Mr D

    Mr D UKBF Legend Free Member

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    Her company does not matter, it is separate from her.
    How hard the bailiffs try and seize assets depends partly on the individual. As an individual the power of the bailiffs is limited and they can be kept out.
     
    Posted: Feb 22, 2018 By: Mr D Member since: Feb 12, 2017
    #17
  18. Lisa Thomas

    Lisa Thomas UKBF Enthusiast Free Member

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    You might be able to recover the money from your bank under s75 of the consumer credit act
     
    Posted: Feb 26, 2018 By: Lisa Thomas Member since: Apr 20, 2015
    #18