Supplier gone bust we want our money back
Discussion
We placed our first order with an electrical supplier for a bit of niche custom made business. We've paid a 5 grand deposit against a 16 grand order to pay for materials. 2 weeks later the supplier goes bust - they were fairly long established so bit of a surprise and sorry for them, it happens. The letter we've received seems fairly standard and short, attached -
Anything we can do, particularly thinking they may have some stock of the raw material of what we've ordered?
Anything we can do, particularly thinking they may have some stock of the raw material of what we've ordered?
Edited by Largechris on Thursday 6th October 11:34
Sadly I think you've lost your deposit with little chance of recovery. In my experience the liquidators fees often seem to tally closely with the realised value of any company assets; meaning customers like yourself and other creditors will lose out as there's very little, if anything, to distribute. Meanwhile they've pocketed the majority of any monies from debtors and the sale of any stock and assets. Vultures. The revenue and other preferential creditors will have first dibs wiping out any remaining funds. If by chance there is anything left to be distributed, be prepared for a long wait, the process can take months.
Largechris said:
We placed our first order with an electrical supplier for a bit of niche custom made business. We've paid a 5 grand deposit against a 16 grand order to pay for materials. 2 weeks later the supplier goes bust - they were fairly long established so bit of a surprise and sorry for them, it happens. The letter we've received seems fairly standard and short, attached -
Anything we can do, particularly thinking they may have some stock of the raw material of what we've ordered?
If it's B2B it depends what the terms of business say. If your £5k was to buy £5k of materials on your behalf and you owned the materials and the bill of sale/contract/PO states that, then you might get lucky and be able to go and collect the materials. Best chance is to drive to their site now with all paperwork you have and see if you get lucky.Anything we can do, particularly thinking they may have some stock of the raw material of what we've ordered?
Edited by Largechris on Thursday 6th October 11:34
mike_e said:
Sadly I think you've lost your deposit with little chance of recovery. In my experience the liquidators fees often seem to tally closely with the realised value of any company assets; meaning customers like yourself and other creditors will lose out as there's very little, if anything, to distribute.
I suppose the directors could have paid their dues, or as many of them as possible, BEFORE ceasing trading - thereby leaving fewer customers and suppliers stranded and only the vultures losing?Mr Overheads said:
If it's B2B it depends what the terms of business say. If your £5k was to buy £5k of materials on your behalf and you owned the materials and the bill of sale/contract/PO states that, then you might get lucky and be able to go and collect the materials. Best chance is to drive to their site now with all paperwork you have and see if you get lucky.
This.B2B is a whole different ball game.
Simpo Two said:
mike_e said:
Sadly I think you've lost your deposit with little chance of recovery. In my experience the liquidators fees often seem to tally closely with the realised value of any company assets; meaning customers like yourself and other creditors will lose out as there's very little, if anything, to distribute.
I suppose the directors could have paid their dues, or as many of them as possible, BEFORE ceasing trading - thereby leaving fewer customers and suppliers stranded and only the vultures losing?And it is illegal, if I recall, to prioritise debt when the company is insolvent .
ConnectionError said:
The went into liquidation because they could not do this.
So there is nothing to pay suppliers' bills and and customers' deposits, but there is something to pay receivers...ConnectionError said:
And it is illegal, if I recall, to prioritise debt when the company is insolvent .
I believe HMRC has first dibs, but otherwise honest Joes should be ahead in the pecking order. Something is wrong when suppliers and customers lose money, but receivers make money.And have the directors concerned lost their houses, or are they scot-free and off to the auction to buy all the stuff back for 50p?
NordicCrankShaft said:
A bit rubbish really that 2 weeks before they've ceased trading they've taken that lump of money from you. Dont beleive for one minute they didn't know this was looming but still took your cash anyway.
It’s a poor show yes. If they do rise like a Phoenix I may send the boys round.Reading that letter again : -
1. It is from the company not the receiver.
2. The liquidation will commence at the end of October.
This suggests to me that they have not yet gone into liquidation and are still trading (illegal if they are knowingly insolvent as they are potentially using assets and money to support the business that could be used to pay off creditors)
I would did deeper and quickly.
Go onto companies house website and find the company, register and follow it, the liquidation will be documented there as things progress.
1. It is from the company not the receiver.
2. The liquidation will commence at the end of October.
This suggests to me that they have not yet gone into liquidation and are still trading (illegal if they are knowingly insolvent as they are potentially using assets and money to support the business that could be used to pay off creditors)
I would did deeper and quickly.
Go onto companies house website and find the company, register and follow it, the liquidation will be documented there as things progress.
ConnectionError said:
Reading that letter again : -
1. It is from the company not the receiver.
2. The liquidation will commence at the end of October.
This suggests to me that they have not yet gone into liquidation and are still trading (illegal if they are knowingly insolvent as they are potentially using assets and money to support the business that could be used to pay off creditors)
I would did deeper and quickly.
Go onto companies house website and find the company, register and follow it, the liquidation will be documented there as things progress.
The letter states they ceased trading on 30th September.1. It is from the company not the receiver.
2. The liquidation will commence at the end of October.
This suggests to me that they have not yet gone into liquidation and are still trading (illegal if they are knowingly insolvent as they are potentially using assets and money to support the business that could be used to pay off creditors)
I would did deeper and quickly.
Go onto companies house website and find the company, register and follow it, the liquidation will be documented there as things progress.
Order of creditors:
secured creditors with a fixed charge (after costs of realisation)
insolvency practitioners’ fees and expenses
preferential creditors
secondary preferential creditors
prescribed part creditors
secured creditors with a floating charge
non-preferential creditors
shareholders (for insolvent companies) or individual (for personal insolvency cases)
HMRC is a secondary preferential creditor
The company is still trading, regardless of what they have told you by the fact they haven't appointed an administrator. It would seem they intend to sit back and wait for a month to collect any monies owed to them.
Until the administrator is appointed you have every right to seek recovery of the monies owed, and they would not get into hot water for paying you back as its monies paid 'on account' not for goods supplied, so you would not be deemed a preferential creditor.
In the first instance write back asking for the adminstrators details, and see if you get a response. The money has pretty much gone as others have said.
Until the administrator is appointed you have every right to seek recovery of the monies owed, and they would not get into hot water for paying you back as its monies paid 'on account' not for goods supplied, so you would not be deemed a preferential creditor.
In the first instance write back asking for the adminstrators details, and see if you get a response. The money has pretty much gone as others have said.
As above, Administrators haven't been appointed yet. So at the moment I would get round there yourself and negotiate nicely.
If the materials for your goods haven't been delivered yet but have been paid for, perhaps they'll give you the name of their supplier and you can have the materials delivered to you. Or if their supplier hasn't used the £5k yet perhaps you might even get the £5k back from them.
It's all about what the contract you agreed says and what you can negotiate before they appoint someone.
If the materials for your goods haven't been delivered yet but have been paid for, perhaps they'll give you the name of their supplier and you can have the materials delivered to you. Or if their supplier hasn't used the £5k yet perhaps you might even get the £5k back from them.
It's all about what the contract you agreed says and what you can negotiate before they appoint someone.
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