Not Paid for Services Delivered - Forced Liquidation or Press

[Andrew89]

I am looking for legal and media advice to form a kind of game plan as to next steps to take, as this is out of my comfort zone..

I have not been paid a large amount of money (ten's of thousands) by a Limited Company which is run by someone fairly well known in the public eye - this is work that has been delivered by myself and the company have not paid me. I have sent a statutory demand with no response and the next step is force this individual with his limited company which he claims has no assets, into liquidation. This will cost around 3-4k without any promise or probably remote chance of getting any money back from it - but what it does do is force the Isolvency Practitioner to investigate him for misconduct and find out exactly what happened to the money that should have been paid to me, and provide full documents as to where the money went, which has so far been requested but not provided. (There have been all sorts of avoidance tactics, lies and excuses so far, which often contradict each other)

What i am asking is, as he has not paid anything as yet and is claiming to have no assets left in the business, should i serve a petition on him for winding up to see the response (according to various legal professionals who have looked at his accounts, the company appears to be in ok shape) OR shall i go to the press and ruin his reputation, so no one will ever trust him or want to do business with him again, and therefore it will be more difficult for him to rip off innocent individuals like me. The first option isnt cheap and the second option may even pay me! I know i need a game plan, but without much experience in these matters, as thank god this is a first, i thought i would seek some advise.

If its legal plan b- why should you end up more out of pocket?

I’m a journalist OP. Depending on the level of fame, and on the public interest (in the legal sense) we probably wouldn’t touch this until you’d actually gone to court because that’s the point we can report it without fear of libel action (court proceedings have privilege which means, in layman’s terms, a report of them is exempt from defamation).

There are other more robust publications that would cover proceedings before they get to court but those are along the lines of the Daily Mail and, well, depending on who the respondent is, you’re likely to get some ferocious pushback and scrutiny into your own affairs.

Forcing him into liquidation would probably stop him trading again as a director for at least 3 years but possibly a lot longer if they find him guilty of misconduct. It also tarnishes his reputation and will stay on his file. Its much more harmful than i first thought. Plus it will force an investigation by the Insolvency practitioner into his affairs - if found guilty of misconduct there could be severe consequences. We could even pursue him personally

Not super famous but there is a connection to some very famous - sorry for the vagueness. I think the tabloids will be interested. When you say the respondent, you mean the director? He doesn't really know me, i was just on the payroll. Not sure how my personal business would make this story interesting - whats actually happened is very interesting, and any diversion into my very interesting personal business would be completely irrelevant and dilute the story - sorry maybe i have misunderstood you? As i said, this isn't familiary territory for me

In legal terms, the respondent would be the company, but I think JaniceBattersby is referring to the director.

What I think JaniceBattersby is trying to tell you is that, if you persuade a paper to publish your story despite the risk of being sued for libel, the individual concerned and their friends could well push back hard and dig for anything embarrassing they could reveal about you. The fact that it may dilute the story you want to tell is irrelevant as far as the press is concerned. They want to sell papers and a good bust up helps. And reporting anything negative the celebrity says about you will help to balance the story, making it less likely they will get sued for libel.

Your other concern if you go to the press is that the individual may sue you for libel. Yes, you could sue them for libel if they say anything untrue about you to the press, but libel cases are expensive. Are you sure you would have the resources to take them on?

I think you may end up disappointed with the effects of the liquidation. Liquidators don't really pay much attention to the conduct of the directors unless huge sums are involved and/or there's lots of compelling evidence of fraud, etc. Their "investigation" is usually very superficial. Likewise there's no guarantee of the directors being banned from being a director in future - again, things have to be very serious for that to be considered. If there's any counter claims or defence of their behaviour, the liquidator may well simply not bother taking further action and just chalk it down to being a business dispute. The "bar" for them to take action really is very high indeed.

Oh I don't plan to speculate on anything - i was only going to share the facts of what has happened - the facts alone speak for themselves. I can evidence all the facts. I am not sure you can get sued for libel when you are simply sharing facts and can prove them? Unfortunately for them, i don't have any skeletons in my closet.

Thanks - are you a lawyer or do you work in insolvency - just wondering what the source of your information is?

If you can prove the facts, any attempt to sue you will be unsuccessful. But they can still sue you. If they do, you will end up substantially out of pocket. You would be awarded your costs if you win, but that won't cover your full legal costs.

I've been a chartered accountant for 40 years, and have had numerous clients who've suffered bad debts or flawed goods/services from firms whose directors have been "not entirely honest" to say the least. Likewise also had a fair few clients who've gone under themselves, sometimes for genuine/innocent reasons, sometimes for sheer incompetence. In all those cases, not a single one has resulted with the liquidators/administrators/companies house taking action to disqualify etc. We're not talking tiny cases either, some of the firms involved went under owing six figure sums and there was a level of "evidence" of incompetence or fraud, but no action taken. I'd say you'd have to be looking at 7 figure sums and clear evidence of fraud for any action to be taken. Administrators/liquidators are mostly concentrating on recovering enough funds to pay themselves and if anything is left over for creditors, then happy days.

Sounds obvious, but did the creditors actively pursue the company/director through the insolvency process? From what i understand the solicitor needs to apply pressure to the insolvency practitioner to get them to investigate.
There are 2 of us at present and even if we can't get any money back - for services delivered - we want to try our best to ensure he is tarnished by this and cannot easily go on to do the same to others. If there are 3 of us, we can set up a creditors committee and will have more control/power in the process.

I have also been given a personal guarantee by the director on text msg that i would be paid - but that did not happen.

In that case perhaps i could ask the paper to set up a legal tab, to cover all costs in case he decides to sue? Call me an optimist, but i am a firm believer that justice should prevail.

Why would the paper do that?

Bluntly, going to the press is the nuclear option. The press might publish your story, but don't expect them to help you beyond that. And be prepared for the fallout. It may be ok, but it can be vicious.

Yes its definitely good advice to heed, which i will. However i am convinced there are other creditors so if we can find them, then we will have more power and its not as if he can viciously attack each one of us that he owes money to - it will be clear he is in the wrong.

A friend of mine used the forced liquidation process & got paid. The creditor was a restaurant run by a TV chef & was consistently late with payments & building up significant debts. Friend considered court action to recover the debts. He could have opted to get CCJ but instead he decided to force liquidation. ( I don't recall why he went for this option, I'm afraid. He is a former accountant turned trade supplier - so he was well up on company law.)
If you go for forced liquidation the company has to respond if they want to keep trading. They can't just ignore you like they can with a CCJ. In my friend's case, the company paid up as they did have funds & didn't want the reputational damage.

I don't know if there is money left in the company - probably not - however he clearly does not want to put the company into liquidation, because of reputational damage, risk of being investigated by the liquidators and i believe there has been misconduct and wrongful trading on several levels.

But this does not guarantee the liquidators will do their job properly if there is no or little money left in the pot to pay them