Owed £50k - next move?
Discussion
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?
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?
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.
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.
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.
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.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.
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 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.
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.
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.
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.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.
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.
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
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
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?
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
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?
Company in his wife's name. Haven't checked LR.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
This was medical supplies.
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