Owed £50k - next move?
Owed £50k - next move?
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Discussion

AB

Original Poster:

18,611 posts

212 months

Saturday 12th December 2020
quotequote all
I'll cut the relatively long story short. In a previous life (7 years ago) I did a lot of business with a guy who paid on time, made me a lot of money and I who I considered to be a friend at the time. I was working for someone else back then, he obviously made a lot more than I did.

Fast forward to 3 months ago, I've had my own business for 5 years and we're doing pretty well, I bump into this guy and we get chatting. I have in stock what he wants to buy. He asks for 14 days credit max but says he will pay as soon as he is paid as he's back to backing the deal, fair enough he's never let me down before so I agreed.

He collects the first half of the order on and sends his customer to collect the second half on the Wednesday. Whilst chatting to his customer he lets slip that he's paid in full already so I give my customer a quick call who says he can't pay just yet even when I mention I know he's already been paid.

Alarm bells start ringing and I don't let his customer leave with the goods. His customer is desperate for them so asks if he can pay me there and then and take them away. I agree... only to find out that my customer has sold them to him for half what I sold them for. More alarm bells.

He pays me the price I originally sold them for and off he trots with 50% of what he originally needed.

My customer now owes me the remaining £50k for 50% he's already taken and sold.

It began with excuse after excuse about raising funds etc etc and now it's pretty much radio silence. No replies to messages and he won't answer the phone.

£50k won't hurt us but I'm more irritated by the fact I appear to have been taken for a mug. I'm not throwing good money after bad at this but what would your next step be?

zygalski

7,759 posts

162 months

Saturday 12th December 2020
quotequote all
It's only £50k. Don't fret about it.

AB

Original Poster:

18,611 posts

212 months

Saturday 12th December 2020
quotequote all
I didn't mean to sound flippant about it, I'm certainly not being flippant about it and very much want the money back. However, if it's a lost cause what is the point of spending fortunes trying to get it out of him? He's someone I considered a friend, in hindsight it wasn't a wise move.

jeremyc

26,153 posts

301 months

Saturday 12th December 2020
quotequote all
Do you have a full trail of authorised Purchase Order(s) (or similar) from him and associated invoices from your business to him?

AB

Original Poster:

18,611 posts

212 months

Saturday 12th December 2020
quotequote all
I do indeed

jeremyc

26,153 posts

301 months

Saturday 12th December 2020
quotequote all
And what were the payment terms on your invoice: is the payment overdue yet?

If overdue, send a formal request for payment (with a timeframe) and, if still unpaid, follow up with a Letter Before Action and if necessary start a legal claim (you may wish to lawyer up for the latter).

Alternatively look at factoring the invoice with a third party and making it their problem.

Stay in Bed Instead

22,362 posts

174 months

Saturday 12th December 2020
quotequote all
Are you not on breach of contract with the original purchaser?

AB

Original Poster:

18,611 posts

212 months

Saturday 12th December 2020
quotequote all
jeremyc said:
And what were the payment terms on your invoice: is the payment overdue yet?

If overdue, send a formal request for payment (with a timeframe) and, if still unpaid, follow up with a Letter Before Action and if necessary start a legal claim (you may wish to lawyer up for the latter).

Alternatively look at factoring the invoice with a third party and making it their problem.
14 days on the invoice. 2.5 months overdue now.

Formal request has been sent and ignored.

I can't see anyone taking the invoice on, but I'll look into it on Monday.

AB

Original Poster:

18,611 posts

212 months

Saturday 12th December 2020
quotequote all
Stay in Bed Instead said:
Are you not on breach of contract with the original purchaser?
We're not in breach with anyone, they were our products that we own(ed).

Stay in Bed Instead

22,362 posts

174 months

Saturday 12th December 2020
quotequote all
AB said:
We're not in breach with anyone, they were our products that we own(ed).
Yes, but you appear to have a contract to sell them to the original purchaser but only supplied 50% of the order.

AB

Original Poster:

18,611 posts

212 months

Saturday 12th December 2020
quotequote all
Stay in Bed Instead said:
Yes, but you appear to have a contract to sell them to the original purchaser but only supplied 50% of the order.
Does that matter? We have loads left in stock to fulfil the original order.

Stay in Bed Instead

22,362 posts

174 months

Saturday 12th December 2020
quotequote all
AB said:
Does that matter? We have loads left in stock to fulfil the original order.
It may do if you sue him for payment. It will come down to the precise wording of the contact and invoice and when payment was due.

I don't think the fact you persuaded his customer to buy direct from you will help either. I know 'business is business' but you don't appear to have acted honorably this matter either.

Sorry.


Spitwad

270 posts

59 months

Saturday 12th December 2020
quotequote all
If it were me & it has been me a few times over the years, I'd be inclined to the view I'd been stuffed & going in with my size tens. I have used variously small claims through to statutory demands, usual caveats notwithstanding - no point suing someone who's skint, need your ducks in a row etc.

These though are always last resorts. By far & away the best remedy is sort things out miles away from legals if you can. If you can't then either go for it or write off the debt. By the sound of it & I understand my view is only what you've said, the guy is skint rather than malicious. If so, then they're not paying because they can't, so you might settle on a percentage, wait or send in (eventually) the bailiffs.

None of those are great & in the end, if you're in business, then you're in is the risk business.

Mr Pointy

12,580 posts

176 months

Saturday 12th December 2020
quotequote all
AB said:
Does that matter? We have loads left in stock to fulfil the original order.
Your had a contract to sell a certain quantity of items on 14 days terms. You've delivered half of them to your customer but you haven't delivered the second half - the fact you've done a deal with the end user might not be relevant.

AB

Original Poster:

18,611 posts

212 months

Saturday 12th December 2020
quotequote all
Thanks for all the replies. We didn't persuade his customer to buy from us, he offered as he was desperate. That was then put as a payment against the original invoice with our customer.

It's all quite complicated and a lot was done on trust, which I'm pretty pissed off has been broken.

Lesson learned I guess if I end up losing out.

anonymous-user

71 months

Saturday 12th December 2020
quotequote all
so he has took £50k's worth from you and sold it for £25k?

to a customer who was clearly willing to pay at least £50k

something is not right

my guess is he is skint and it will be difficult to get the money back quickly

but it is worth going to see him as you have a long standing relationship with him

my 2p worth

AB

Original Poster:

18,611 posts

212 months

Saturday 12th December 2020
quotequote all
That pretty much sums it up. Plan is to drive down and knock on his door this week if I get nothing.

FazerBoy

989 posts

167 months

Saturday 12th December 2020
quotequote all
Obviously this was a scam from the outset.

If you know where he lives have you checked on the Land Registry website whether he owns his house? If he does then at least you know there might be some equity there to go after (although of course it could br mortgaged up to the hilt).

Out of curiosity, what type of goods did you sell him?

Edited by FazerBoy on Saturday 12th December 13:52

roddo

579 posts

212 months

Saturday 12th December 2020
quotequote all
AB said:
That pretty much sums it up. Plan is to drive down and knock on his door this week if I get nothing.
I'd be taking a couple of friends for a run out with base ball bats!

AB

Original Poster:

18,611 posts

212 months

Saturday 12th December 2020
quotequote all
FazerBoy said:
Obviously this was a scam from the outset.

If you know where he lives have you checked on the Land Registry website whether he owns his house? If he does then at least you know there might be some equity there to go after (although of course it could br mortgaged up to the hilt).

Out of curiosity, what type of goods did you sell him?

Edited by FazerBoy on Saturday 12th December 13:52
Company in his wife's name. Haven't checked LR.

This was medical supplies.