liquidating a business
Discussion
Got a bad shock last week that the company that I have contracted to for the last 27 years have been told that their main contract is giving notice of three months and then pulling out.
This means that my main contract will lose 85% of their business so they will not be viable, so last Wednesday they had a meeting with the staff and told them that as from 29th Feb they will no longer be trading.
They then had a meeting with myself to make certain that I would still supply couriers for the last three months, however in the meeting it was said that on the 29th of Feb they would be liquidating the business.
The outcome of all this is that I built my business up serving them and we went hand in hand (Or hanging onto each others hairy bits) over the years.
So the same difference as them, my business was made up of 85% of them and 15% of other customers.
So here's the crunch, as they have said that they are liquidating the business do I ask for the 5 weeks money I am owed and stop trading with them, do I keep trading and might get shafted or will it do me any good asking them to sign directors guarantees and would this mean that I would get my money.
As an aside after working for them for 27 years I would hope there would be some honour but no offence to Eric Mc they have a accountant as one of the 4 partners and because of this I am very scared of what way he might find for not paying me.
Your thoughts please folks. Grant (Very Worried)
This means that my main contract will lose 85% of their business so they will not be viable, so last Wednesday they had a meeting with the staff and told them that as from 29th Feb they will no longer be trading.
They then had a meeting with myself to make certain that I would still supply couriers for the last three months, however in the meeting it was said that on the 29th of Feb they would be liquidating the business.
The outcome of all this is that I built my business up serving them and we went hand in hand (Or hanging onto each others hairy bits) over the years.
So the same difference as them, my business was made up of 85% of them and 15% of other customers.
So here's the crunch, as they have said that they are liquidating the business do I ask for the 5 weeks money I am owed and stop trading with them, do I keep trading and might get shafted or will it do me any good asking them to sign directors guarantees and would this mean that I would get my money.
As an aside after working for them for 27 years I would hope there would be some honour but no offence to Eric Mc they have a accountant as one of the 4 partners and because of this I am very scared of what way he might find for not paying me.
Your thoughts please folks. Grant (Very Worried)
Edited by Drifting on Tuesday 4th December 00:26
Can you revert to payment up front based on an average from the previous 3 months and have that paid by CHAPS weekly in advance, they should understand in the circumstances, that should include outstanding invoices in the first payment.
I guess your concern is they don't pay you from now and then liquidate and you get to the back of the line.?
I guess your concern is they don't pay you from now and then liquidate and you get to the back of the line.?
They do seem to have been fairly up front and honest with you in that they have given you advanced notice of their intentions. Many businesses wouldn't be so ethical.
At least you have the opportunity to try and find some new work to replace - at least in part - your expected lost business.
Did your own accountant ever warn you of the dangers of being so dpendent on just one customer? Being over reliant on one customer can lead to "going concern" issues for your own business - as you have unfortunately now found out.
At least you have the opportunity to try and find some new work to replace - at least in part - your expected lost business.
Did your own accountant ever warn you of the dangers of being so dpendent on just one customer? Being over reliant on one customer can lead to "going concern" issues for your own business - as you have unfortunately now found out.
Thanks for the reply's I am trying to get them to pay up front but I don't think it will happen.
Eric you are right about all the eggs in one basket but with the way their business expanded so rapidly we were never able to service outside customers properly, so it looks like after all these years I will have to start from the bottom again.
Grant
Eric you are right about all the eggs in one basket but with the way their business expanded so rapidly we were never able to service outside customers properly, so it looks like after all these years I will have to start from the bottom again.
Grant
Hi Grant, I too have a Courier company and know all too well the dangers of alowing one company to become a large chunk of your income, not that easy to avoid though if you tend to grow organically!
Suggest you get on Courier Exchange and the like and pick up some work at lower margins whilst looking for some new leads of your own. Our leicester office dragged in loads off the site and built up a good turnover before replacing it with other work.
Best of luck, I will bear you in mind if we get stuck in Essex, are you mainly same-day?
Nick
Suggest you get on Courier Exchange and the like and pick up some work at lower margins whilst looking for some new leads of your own. Our leicester office dragged in loads off the site and built up a good turnover before replacing it with other work.
Best of luck, I will bear you in mind if we get stuck in Essex, are you mainly same-day?
Nick
If they will not pay up front then another option would be to ask for a guarantee from their bank to cover the amount of invoices normally outstanding under your normal terms of trade. Then if they go into liquidation & dont pay, you would recv funds under the guarantee.
Good luck with it.
Good luck with it.
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