Help a client is going bust owing me a heap of cash

[hahaimawitch]

Does anyone know about limited company law. My main client is going bust and owes me alot of money. I have paid my suppliers who worked for me to deliver the contract and am is deepest do do if I can't sort it.
Would really welcome some advice.

[trice]

This happened to us last year. You are probably in the do do. We had no comeback at all. Get in and repossess any equipment if you can. Once they are in receivership you can't even do this.

[prh47bridge]

I'm assuming your creditor is a limited company. If that is the case you are in a very difficult position. You have no comeback against the directors or shareholders in most situations. It is up to the liquidator to pursue the directors if they are guilty of wrongful trading, fraudulent trading or similar.

You should only repossess equipment as recommended by Trice if your contract with them specifies that the goods remain yours until they have been paid for. If you haven't got that term in your contract, the liquidator may come after you for compensation on the grounds that you have removed goods which belonged to the company.

You will need to log your claim with the liquidator and respond promptly to anything he sends you. The liquidator has to get as much cash as he can for the company's assets and then distribute the cash. The order in which debts are settled is laid down by law. You are an unsecured creditor so you only get paid when the fees and charges of insolvency, and the secured and preferential creditors have been paid in full. It is therefore likely that you will at best get paid just a part of the money owed to you. At worst, you may not receive anything.

If you are trading as a limited company you have some protection. If you are trading as a private individual you have got real problems I'm afraid.

[traceybath]

I don't think its good unfortunately.

DH had this happen to him last year - some people are utter knobs and continue trading when they know they will not be able to pay their suppliers and then 2 weeks later they've got a new business.

I would get a solicitor involved pronto but you may have to write it off - DH did unfortunately.

And I know you don't want to hear this but DH is now fastidious about credit checking all new clients, big payments up front and staged payments all the way through a project.

Any chance that the work you've done could be re-used for another client at all?

[hahaimawitch]

It isn't looking good. It is so sad, the problems are happening due to one dangerous idiot who has behaved so uprofessionally it is terrifying. Whats worse he is a contractor who came in to cover the oweners maternity leave and we now know he isn't insured so we can't sue him either.
The whole thing is vile. They are LTD there are no assets, the owner is going to loose her home.

[prh47bridge]

It is terrible when something like this happens. One company failure can bring down a number of others. If the owner is gonig to lose her home she must have personal guarantees. With no assets I suspect you won't get any of the money owed to you unless the liquidator is able to take action against the contractor. If he is uninsured that would only be worth it if he has significant assets and there is a strong case against him.

You have my sympathy. How bad will this be for you? Do you have enough other clients to carry on? Are you trading as a limited company? It may be that you will need to take steps to protect yourself/your business from your creditors while you sort this out.