Building dispute - need to put a small claim in but worried they may be going bankrupt

[Loueytb3]

Need advice on a dispute we have with a building company. Basically, they built us an extension ? no problems, really fantastic workmanship, really pleased with them. So we asked them to build some decking and do some more internal work to the house and gave them 10k for the work (not the total cost, but still a large percentage of it). At this point it all went downhill and to cut a long story short, they apparently got a large tax bill at the same time as we paid the 10k. They anticipated it would take a couple of months to sort the tax bill before getting back to normal trading again with cashflow available to purchase the materials for our decking. In the meantime, they came and constructed the base for the decking (with temporary boarding on top). They have still been doing other jobs during this time.

Having got nowhere in getting a sensible start date out of the Director (who we had been dealing with), I sent a strongly worded letter last month asking them either to do the work within a month or give the 10k back or we would take legal action. I got a holding email which said that they hoped to have a clear answer at the start of September. We then went on holiday and have just returned. I spoke to the Director yesterday who said they were waiting for a contractor to pay them and also payment from another job and then they hoped they would have the cash for the materials. He is meeting with the client on Friday and would come back to me then with a response.

However, I also spoke to the project manager who has been fab and feels awful about the whole situation. He told me that apparently they were setting up a new company (but that the Director had factored in our outstanding work). Now alarm bells started ringing because why would you do that if you had no issues trading?

I am now worried that he is going to make the company bankrupt, meaning that we wouldn't be able to recoup our 10k, and start up a new company and carry on trading.

I want to wait until the weekend to hear back from the Director as he has given his word he will get in touch, but if we don't, we will be putting in a small claim over the weekend.

We will clearly win our claim but if they have no cash (or have gone bankrupt) how will we get them to pay up?

If they have gone bankrupt can they set up a new company with the same director? Can we go after them instead?

If the company goes into receivership or liquidation you may end up only getting a proportion of your money back. At worst you may get nothing at all.

If this company becomes insolvent the director can set up a new company unless he is disqualified from acting as a director, is personally bankrupt or is subject to a bankruptcy restrictions order or undertaking. There are some conditions he must comply with if he wants to use the same or a similar name. You cannot pursue the new company for the debt and it is unlikely you would be able to pursue the director personally.

If you used a credit card to pay your deposit you can get your money back from your credit card provider if this company does go under or fails to carry out the work.

We didn't use a credit card - the money was paid directly into the company account.

If he has a CCJ against him then can he be prevented from being a director of another company. I need to check whether there are any outstanding.

A CCJ would not prevent him from being a director of another company. He would only be prevented if he has been disqualified, is personally bankrupt or is subject to a bankruptcy restrictions order or undertaking. If any of those was the case he would not legally be able to act as a director of his current company.

How would you find that out?

Sorry - meant to say that he has a CCJ outstanding against him personally (from 2010) but there are none against the company.

You can search the register of disqualified company directors here. You can find out about bankruptcies here. To be honest I doubt you will find anything.