Winding up orders

[DeveloperBloke]

hi there

i have a web dev business, ad one of my clients has made my life very difficult, as they have refused to pay. well he has pffered me 500 per month which i wont and cant accept.

they owe me £3500. now, i know about a stat demand, and also a winding up order.

once i serve the stat demand, how can this rat put in a dispute over the fact that he owes me £3500. how long can this delay the winding up order? the fact he owes me money (and about 5 other crditors who i will laso be contacting) is un disputable.

what steps could he take to dispute the order? what steps can i take to counter a dispute?

i have purposefully not turned the site off. What i am hoping is, is the only reason that he can dispute it, is if he sees the work as un satisfactory, yet if the site has been live for two months and he hasnt said anything, why is it suddenly un satisfactory.

also, a ltd bsuiness is seperate entity. can he dispute, seeing as he is an employee of the business?

io am also contacting the other creditors (around £15,000 worth), will this strengthen the winding order being passed. can we issue a joint order, will this give us more muscle.

when a winding up order is passsed, is it passed to look into the accounts of the bsuiness, which then determines whether money is owed or do i have to prove money is owed first (i know about the affidavit)


i also know that he currently does nto have two directors as the company secretary walked out, as he made her deal with the crditors he wouldnt pay. what could i do in regards to reporting him. would he be fined or anything.

this bloke seems that he is a serial con man. he has had two ltd comanies wound up before. will thsi be atken into acount

i hope that here is someone who works in thsi area who can help, i want to serve it asap, so he cant doa runner

many thanks

j

 

[DuaneJackson]

Whats to stop him doing a runner even after it's served?

It's not illegal to have just 1 director as long as you have a seperate secretary (and your articles allow it)

also, a ltd bsuiness is seperate entity. can he dispute, seeing as he is an employee of the business?

I assume so, how else can the company dispute except through one of it's officers?

I'd try to look at it in an unemotional way - after the time and expense of a winding up order, it sounds like you are still unlikely to get your money. Is it worth it?

You might say "yes" because of the principle and I think I might agree with you!

 

[DeveloperBloke]

this rat has made my life a misery.

it is a matter of principle, and i will enjoy doing it.

by the way, if the order is served then does the company pay the cost for the winding up order?

 

[Alpha]

You are unfortunately missing one point........the fact that it is a limited company!!!

If the reason that it has not paid is because it has no money to pay and no assets, even if you get judgement in your favour you may not receive anything.

It would actually be better to get a formal letter to him agreeing to pay you £500 per month which if he defaults on for more than two months you will consider the agreement terminated and will take the appropriate action (winding up) that way you may get some/all of your money and can then switch off the website.

I know it probably sticks in your throat to do it but it may be the best way round the situation.

its all a game of russian roulette!!

 

[DeveloperBloke]

the compnay does have money, and lots of it. i have insider information

 

[Alpha]

the compnay does have money, and lots of it. i have insider information

Well if you are confident that the knowledge is correct then provided that you have all reasonable documentation to hand i.e. agreed specifications for the work signed for or order for such, completed work signed off or at least have sent a letter when asking for payment for an explanation of any reasons for withholding such, making sure that you have given all reasonable opportunity for him to pay or provide you with any changes required then you should have no problem in getting a court order to pay.

If there are several of you owed money for several months there would be no problem in obtaining a winding up order.

 

[DeveloperBloke]

cheers for all your advice alpha, much appreciated

just another quckie

if he decides to dispute this, which i know he will, what is the process?

will he turn up when i issue the winding up order and he gives his case there and then, as do i, then the judge decides, or will he file some sort of doc which gets looked at seperately?

thanks

j

 

[bwglaw]

cheers for all your advice alpha, much appreciated

just another quckie

if he decides to dispute this, which i know he will, what is the process?

will he turn up when i issue the winding up order and he gives his case there and then, as do i, then the judge decides, or will he file some sort of doc which gets looked at seperately?

thanks

j

DeveloperBloke

You need legal advice here.

To issue a winding up order you have to pay about £650 upfront which includes Court fee and a deposit for the official receiver. You have absolutely no guarantee to get your money this way especially when dealing with £3500. You do need expert assistance when dealing with winding up orders.

You are better off accepting £500/month repayment. You should get this in writing and also state in the document that in the event of failure the debtor is liable for all fees in the recovery of the debt, this includes court fee, solicitors costs, tracing etc. Also in the document state the amount owed. You could also include the name and private address of the MD or business owner to guarantee your debt

As we speak I am currently dealing with a client that has been threatened with winding up proceedings. It is highly unlikely in my clients case because the debt owed by my client is £2000 even though its above the minimum of £750 the debtor has little assets and greater liabilities. If a debtor has offered a reasonable monthly payment plan and has not defaulted the creditor is not likely to get the winding up order

However, if you have to resort to legal proceedings you may be better off issuing a claim in the County Court and upon judgment if the debtor defaults the court order you can get a Warrant of Execution (about £50). This is a County Court Bailiff who has power to seize any assets the debtor has.

As for the workmanship. The debtor has to query the quality of the work within a reasonable timeframe, if 2 months have elapsed the debtor is unlikely to have a good case to argue that your work is unsatisfactory expecially if they have offered to pay £500/month.

If you need any assistance please let me know. You can PM me or email [email protected]

 

[multilingual]

I am no legal expert but I have been in similar situations in the past.

I used to look at the options and decide which course of action was the most appropriate.

For example, if this guy owed me £3500 I would work out how much of that is my actual cost? If my break even point is say £2000, and the rest is profit, then it is important to me to recover that £2000 first so that I am not losing money.

If he is offering £500 per month then in 4 months I will have broken even, and that to me is more important than spending yet more money chasing the guy as a matter of principle.

I did get very personal with one bad debt a few years ago and it distracted me so much that my business suffered. I learned not to get emotionally involved too much in such matters and now I simply look at the best way of limiting the damage.

I now accept bad debts as just part of being in business and write my future plans and financial projections to allow for it.

JB

 

[DeveloperBloke]

yes, i hear what you are saying here.

i have now caught up on my cash flow, through extra hours etc. this bill of 3500 is for my time, i have no direct costs involved, apart from my fixed outgoings

he paid his deposit there and then, he gave me no reason to doubt him paying, until he launched his new album and it failed. he is a sour man who believes he is a rolling stone, has been wound up before, been sued by the governtment for fruadulantly handing out degrees and doctorates (found that out this morning)

after speaking to someone who used to be in business with him, its not the first time he has basically conned people into doing work and not paying them

now that i have caught up with my cash flow, i can simply write the debt off if i want to, but why should i? he caused me a lot of agro, i couldnt pay my rent , plus other things.

i have seeked advice, but i didnt ask any questions abotu the dispute procedure. i am going to take him all the way to court, and get what i am owed, as well as what other creditors are owed by this conman. getting a county court judgement only says that he has to pay. ok a bailiff can go in (at extra expense) and attempt to recover goods, but i feel i have a good case to wind him up. he deserves it. whilst this may seem personal, and im not denying its not, i am determined to do this, but i am also ensuring that it does not affect my busines in general.

in regards to the costs, i am int he process of conrtacting the other creditors and seeing if they will pay part of the costs with me.

thanks for all the advice so far. really appreciated

j

 

[multilingual]

I wouldn't want you to write the debt off, just didn't want you to throw good money after bad. If he is offering £500 per month and you are not in financial strife then it sounds like a reasonable solution. If he agrees to this then you can at least be sure of getting your money eventually.

If you wind him up and the company is not worth a carrot then you will lose all your money plus the extra legal fees.

Accepting the offer is the lesser of two evils I would say.

Best of luck.



JB

 

[fastfences]

Excuse me, guys. But where's 'Nic the Chick' when she's needed?
cheers, Nigel

 

[multilingual]

Probably doing her make up.

:wink:

JB

 

[Ian J]

If you get your Winding Up order and it's a big if, the court will appoint the Official Receiver to wind the company up and distribute the assets. As an unsecured creditor you will come bottom of the pile and invariably in situations like this there is very little left over for the unsecured once the secured creditors and prefs have been paid and the OR has had his whack.

County Court is one route which has the advantage of being cheap but has the disadvantage of being slow and inefficient as many debtors will rub their hands in glee when told that a summons is being issued in the County Court as they will know that they can mess you around for a few more months.

The High Court is much more efficient and speedy but proceedings have to be issued by a solicitor and there is no DIY route so it is a much more expensive undertaking.

I agree with all of the others here that accepting £500 per month is the sensible option from a purely financial point of view but if you do so, confirm the agreement in writing so that he can be deemed to have accepted the debt and therefore cannot later dispute it.

 

[bwglaw]

If you get your Winding Up order and it's a big if, the court will appoint the Official Receiver to wind the company up and distribute the assets. As an unsecured creditor you will come bottom of the pile and invariably in situations like this there is very little left over for the unsecured once the secured creditors and prefs have been paid and the OR has had his whack.

County Court is one route which has the advantage of being cheap but has the disadvantage of being slow and inefficient as many debtors will rub their hands in glee when told that a summons is being issued in the County Court as they will know that they can mess you around for a few more months.

The High Court is much more efficient and speedy but proceedings have to be issued by a solicitor and there is no DIY route so it is a much more expensive undertaking.

I agree with all of the others here that accepting £500 per month is the sensible option from a purely financial point of view but if you do so, confirm the agreement in writing so that he can be deemed to have accepted the debt and therefore cannot later dispute it.

The rules on priority creditors, I understand, has been abolished. Say, if a debtor owes to Inland Revenue, and ABC Ltd, it does not now give Inland Revenue any priority over any assets.

County Court is the best place to start and enforcement proceedings can be made in the High Court Sheriff Office, which will involve the High Court Enforcement Officers to seize the debtor's assets. Even this route can fail. There is no route in the legal system that can 'guarantee' you any success.

Where I am currently staying, they do't believe in the legal system to recover debts. They go to the debtor with their friends and cousins ready with a few handy fists - it works! Not encouraging anyone to take this option!

 

[Ian J]

The rules on priority creditors, I understand, has been abolished. Say, if a debtor owes to Inland Revenue, and ABC Ltd, it does not now give Inland Revenue any priority over any assets.

Not so. The Enterprise Act 2002 abolished the Crown preference previously enjoyed by Inland Revenue and Vat but other forms of preferential creditors remain with fixed chargeholders at the top of the tree and employees, landlord and floating chargeholders ranking ahead of unsecured creditors.

 

[bwglaw]

The rules on priority creditors, I understand, has been abolished. Say, if a debtor owes to Inland Revenue, and ABC Ltd, it does not now give Inland Revenue any priority over any assets.

Not so. The Enterprise Act 2002 abolished the Crown preference previously enjoyed by Inland Revenue and Vat but other forms of preferential creditors remain with fixed chargeholders at the top of the tree and employees, landlord and floating chargeholders ranking ahead of unsecured creditors.

Ian, upon reading my posting again I did not make myself clear. Crown preference, as you correctly state has been abolished. Other preferential creditors remain in place, and I doubt this will change i.e. employees, landlords etc. My example in my posting re: Inland Revenue was therefore correct.

So applying the rules to the original poster's situation he is not likely to have priority for sums due to him if the debtor, say has a debt with a bank, upon which the bank has placed a charge as is the case with most banks lending to Ltd Companies.

 

[Ian J]

So applying the rules to the original poster's situation he is not likely to have priority for sums due to him if the debtor, say has a debt with a bank, upon which the bank has placed a charge as is the case with most banks lending to Ltd Companies.

That is what I said and is why I recommended that he did not go down the Winding Up route

 

[Alpha]

I think that we are unanimous in what he should do however being fuelled by the thoughts of revenge I would be willing to bet that what he will do is what he originally had in mind.

The other point that I did not address and both handson and ianj have alluded to is that he may have the impression of having lots of money but this could be owed to lenders who may have charges on the business.

In business there is no place for allowing emotion to overule common business practice(much as I'm sure that we all have someone that we would like to wind up.

:twisted: )

 

[gapgb]

I agree with the others when they say get professional advice, sounds like the chap will use every trick in the book to avoid paying you. Take advice from nicthechick or other debt collection agents. They will know how to counter his moves.

My experience with debtors who start to lie isn't great, it's never ended up well for me and it's a bitter pill to swallow.

General question - how many people get some form of payment up front when starting a higher value project?

Guy

 

[DuaneJackson]

General question - how many people get some form of payment up front when starting a higher value project?

Might be worth one of the mods splitting this out as a seperate thread - but yes, I do. Generally 40% with a new customer.

 

[gapgb]

done

Guy

 

[Admiral Collections]

Okay, okay. Im back from putting on my lip gloss and I can see you guys have all gone into Alpha male mode again, complicating matters.

Developer Bloke, I will PM you!


Nic :wink:

 

[steve atkinson]

screaming and shouting wont get you anywhere
if you supply him then you must know of other companies that also supply him
make sure they are they know hes not paying his bills
you may find that money suddenly appears from nowhere when other people know about him not paying people they do take an interest i can assure you
play the sniddie game
it will cost him more in the long run

 

[Admiral Collections]

Or send Steve round, he is 19 stone 6ft bodyguard/boxer who now does aromatherapy!


Nic :wink:

 

[winton50]

I have to disagree with Steve,
If your motive is to do the best for your business then take a deep breath and work out how you can get the most money back for the least cost.

Letting other (possibly larger) creditors know about this guy will just cause a gold rush and he'll disappear and you'll get nothing. If you think people like this care about CCJ's and winding up orders you are in cloud cuckoo land and if you think it will stop them starting again, usually in the same building with the same name but with '2005' at the end then you are deluding yourself.


seriously swallow your pride and just go for maximum return using a professional debt collector.