Client in liquidation - advice please

[Mon Ami Mate]

Anybody have any knowledge of experience of securing outstanding invoices from a client that has gone into liquidation? The directors of this company have lied to me. They owe me several thousand pounds for an invoice that is several months old. I had traded successfully with them over time and had always been paid in 30 days. THe Directors assured me the company wasn't in any trouble at all, but had a short-term cashflow problem. Last week I was promised that the invoice would be paid in full by the end of the month. Today I have discovered by chance that the company was put into voluntary liquidation last week. I suspect that, as an unsecured debt, I won't get my money, but was wondering if I have any useful recourse. This is the fourth time this has happened to me in 18 months...

[enderbylass]

Sorry to hear that. After the liquidators and secured creditors have taken their bit you will probably not get a penny. I worked for insolvency practioners for 6years ,just attending meetings on behalf of clients that had lost money and all I can say is that at least attend the meeting of creditors when it is called. Face the directors and grill them on how long they knew the company was trading insolvently.

[dazren]

Mon Ami Mate said:

Today I have discovered by chance that the company was put into voluntary liquidation last week.

Did the directors call a meeting of creditors and put the company into liquidation or did a court do the honours with a compulsory wionding up order? If the former, you should have received notice in advance of the meeting.

Even if you can prove the company was trading insolvently when the company ran up the debts, it's a costly exercise going after the directors personally, with no guarantee of pay back.

DAZ
(out of date on insolvency law by 7 years)

[Mon Ami Mate]

dazren said:

Mon Ami Mate said:

Today I have discovered by chance that the company was put into voluntary liquidation last week.

Did the directors call a meeting of creditors and put the company into liquidation or did a court do the honours with a compulsory wionding up order? If the former, you should have received notice in advance of the meeting.

Even if you can prove the company was trading insolvently when the company ran up the debts, it's a costly exercise going after the directors personally, with no guarantee of pay back.

DAZ
(out of date on insolvency law by 7 years)

Apparently it's a voluntary liquidation, which is what has given me some hope. THe other three were all forced into liquidation and I got nothing. I haven't had any notice or correspondence at all - the directors all assured me last week that the company was fine, trading profitably and that I'd get paid in full by the end of this month.

[trunnie]

I'm a little out of date, but one of the things that liquidators used to have to do was submit a report to the DTI on the conduct of Directors. In the early 90's the DTI was so overwhelmed that only the worst cases made it to court, but these days they are a lot better at going after misbehaving directors via disqualification proceedings. Therefore although it may not get your money back, it may be worth making sure that you let the liquidator know about any questionable behaviour as it could mean that if there was serious misbehaviour then the ex-directors get disqualified.
If it is just normal commercial behaviour on their part though then it may just be a case of writing off the debt. Liquidators may seek to recover funds from directors if they continued to trade whilst the company was insolvent but this is difficult to prove and liquidators only seemed keen to do it if there was a clear prospect of getting the money back.

[jamesuk28]

Yeah Ditto that. Only real hope is to have the directors personally for "trading while insolvent in the knowledge that they could not realistically trade back into a solvent position". The mere threat of a personal action against them (assuming the above is correct) sometimes brings dramatic results without the need to actually sanction it.