very bad experience with research organisation

[Ghobashy]

Hi
I run a small business specializing in trading skincare products. In an effort to be different , I collaborated with a new startup formed by a team of professors from a well-known university in the UK. We embarked on a project to develop a new product, and over the course of two years, I invested more than £150,000 in the project Throughout this time, I received periodic progress reports, but when I received on of the report, I became suspicious about the actual progress made.

Being on the business side of things, I sought assistance from a technical expert, who confirmed my concerns: we were still in the early stages of the project despite two years passing and over 50% of the project budget being spent. I sought further advice from an industry expert, whose feedback was even more alarming. Not only was the project far behind schedule, but it became evident that the startup had misrepresented the milestones they claimed to have reached. They had issued invoices for work that had neither been completed nor was necessary at that stage of development.

When I confronted them with these findings, they attempted to obscure the issue with technical jargon, emphasizing the time and effort they had supposedly dedicated to the project. To my surprise, they even demanded an additional £50,000 in payment. Despite having an agreed-upon schedule, they failed to adhere to it. After several months of disputes, the company ultimately dissolved.

I am seeking advice on the best course of action moving forward. Any help would be greatly appreciated.

 

[Mark T Jones]

What formal agreement do you have in place? The answers should lie in that - particularly re ownership of the IP

Beyond that, you will have your work cut out proving anything

 

[Ghobashy]

What formal agreement do you have in place? The answers should lie in that - particularly re ownership of the IP

Beyond that, you will have your work cut out proving anything

The agreement says that I will own the IP of the final product , but they didn't finish except 20% of the project , and the documents are very basic cannot help me to continue somewhere else

 

[Mark T Jones]

You need to talk with a lawyer who specialises in such things (though I'm not sure how you'd define 'such things' in this case)

The initial consultation should be free

There are far too many variables and unknowns to get meaningful advice on a forum

 

[Newchodge]

the company ultimately dissolved.

You cannot do anything if the agreement was between the (now) dissolved company and the research organisation. The company could have sued for recovery of money paid on fraudulent invoices.

 

[Ghobashy]

You cannot do anything if the agreement was between the (now) dissolved company and the research organisation. The company could have sued for recovery of money paid on fraudulent invoices.

So I cannot sue the directors for fraudulent invoices ?

 

[Mark T Jones]

So I cannot sue the directors for fraudulent invoices ?

You can due anyone for anything. The question is will you win?

Fraud is incredibly hard to prove - essentially you have to prove that there was no intent to do the work or deliver.

As before, speak to a professional/specialist, but don't throw good money after bad.

Plus, learn from your mistakes - it was a costly one, but we all make them.

 

[Ghobashy]

You need to talk with a lawyer who specialises in such things (though I'm not sure how you'd define 'such things' in this case)

The initial consultation should be free

There are far too many variables and unknowns to get meaningful advice on a fo

You can due anyone for anything. The question is will you win?

Fraud is incredibly hard to prove - essentially you have to prove that there was no intent to do the work or deliver.

As before, speak to a professional/specialist, but don't throw good money after bad.

Plus, learn from your mistakes - it was a costly one, but we all make them.

Thank you Mark , yes I am afraid to invest more money on court proceeding , ending up with nothing

 

[Newchodge]

So I cannot sue the directors for fraudulent invoices ?

Only if they invoiced you personally, not the dissolved company.

 

[Ghobashy]

Only if they invoiced you personally, not the dissolved company.

Sorry but the dissolved company is the research organisation , not mine . Mine is still active , they are not

 

[Newchodge]

Sorry but the dissolved company is the research organisation , not mine . Mine is still active , they are not

To whom were all the invoices addressed?

 

[Ghobashy]

To my company , which is still active

 

[Newchodge]

To my company , which is still active

And to whom were the invoices paid?

 

[Ghobashy]

And to whom were the invoices paid?

to the research organisation , dissolved now

 

[Newchodge]

to the research organisation , dissolved now

There is no point suing a dissolved organisation.

 

[Lisa Thomas]

Your debtor no longer exists, because it has been dissolved. You would firstly have to pay to reinstate it to be able to purse it. However if the project was never finished it sounds as if you don't have any claim against the company. A Solicitor would need to advise. Also, you have to consider whether, even if you have a claim, and you reinstate the company, and you pursue the company and win an order against it, does the company have funds to repay you, some or all of your money, which I assume was unsecured.

 

[Ghobashy]

So there is no any liability on the directors , even though there was a clear misrepresentation and the work in the invoices falsely presented as finished and completed while that was far from reality ?

 

[fisicx]

So there is no any liability on the directors , even though there was a clear misrepresentation and the work in the invoices falsely presented as finished and completed while that was far from reality ?

Possibly. But as the company has been dissolved and there is no money I'm not sure what you hope to achieve. Your contract was with the company not the directors. If there was fraud then you might have a tiny opportunity to prosecute but your money has sadly gone forever.

 

[Lisa Thomas]

Possibly. But as the company has been dissolved and there is no money I'm not sure what you hope to achieve. Your contract was with the company not the directors. If there was fraud then you might have a tiny opportunity to prosecute but your money has sadly gone forever.

This

 

[Lisa Thomas]

As a very long shot you could make a complaint if you think they have committed misconduct here and there is a miniscule chance the Insolvency Services will investigate:

Reporting misconduct by companies, directors and bankrupts to the Insolvency Service

www.gov.uk

 

[Frank the Insurance guy]

So there is no any liability on the directors , even though there was a clear misrepresentation and the work in the invoices falsely presented as finished and completed while that was far from reality ?

You can pursue directors personally, but the onus is on you to prove that they ran the company negligently, or fraudulently and this was the direct cause of your financial loss.

If you are successful, the directors will be personally liable - they will have to pay out of their own pocket and personal assets (ie. irrelevant that the company has dissolved)

However, the question is what are your chances of being succesful? You will need to seek professional legal advice who can give you some guidance on this.

I suspect that your best option is to move one.