Advice required for supplier who has gone under

[Obiwonkeyblokey]

Good Morning

I have recently had an office renovation done by a third party company whom we shall call office fitout ltd.

I still owe them a small amount of money for works which have not been completed and some chairs etc which are yet to arrive, however they have had the bulk of the money already ( in excess of £120k)

I belive that late last week one of their suppliers has issued a winding up order against them for bills which have not been paid. Since then I have had companies ( alarm companies, electrician, plumber) call me explaning that they have invoices outstanding with office fitout ltd for the work carrried out on our office.

Now if I have paid office fitout ltd in good faith, where does that leave me with the people who havent been paid? some of which are saying that the liability would now lie with me. I certainly dont wish to pay out twice.

I do have a sum of money left to pay to the project ( lets say 10k) I dont mind using that for some of the suppliers, however if the debts on my project are much larger than 10k, then how do I decide who gets the money.

Should I just sit tight and wait for any auditors etc to get involved?

thanks

O

[Piglet]

Who do you have contracts with? If you instructed Bustco and only have contracts with Bustco you are in a stronger position (check your contract with Bustco to see if there is anything that can push liability back to you)

BUT if you have contracts with Alarmco, Furnitureco etc. direct then I think you're in difficulty. You have a contract to pay them and you haven't. You might well have paid Bustco but if they haven't paid Alarmco then Alarmco are going to look to you for payment.

You need to check any contact paperwork you have ASAP and get yourself some specific legal advice.

[Piglet]

Sorry second post to say don't pay ANYONE until you've heard from Administrators etc.

[john_p]

You have no responsibility for Office Fitout Ltd's debts.

If they go into administration - the administrator will be responsible for sorting out the mess. The companies debts with their suppliers is not your concern. Definitely do not pay them.

However this doesn't stop an (eg) chair supplier turning up to demand his chairs back. So you need to establish contact with the administrator ASAP to determine the situation.

Pragmatically, I'd keep the 10k as long as you can till the dust has settled. Then use it to pay off the people who need to finish work to get your fitout finished..

[Obiwonkeyblokey]

thats what I was planning to do. I have no contracts witht he third parties involved.

thanks for your advice chaps.

[Obiwonkeyblokey]

UPdate on this.

It turns out it was voluntary liquidation.

I had a 3rd plarty supplier contact me today who installed some cupboard etc and are owed about 4k. They are saying that becuase they havent been paid, that legal title didnt pass over to office fitout ltd and therefore no title has been passed to us. They are quite insitent about retrieving their money or their goods.

everyones in the st basically, and now it turns out that my accountant saw the director of office fiout ltd in the bank on Wednesday ( prior to going into voluntary liquidation on Thursday withdrawing thousands in cash!)

Edited by Obiwonkeyblokey on Wednesday 26th November 14:56

[s,one]

If you pay the cupboard people direct I would wager that you will end up paying for it twice, one to the supplier and again to the reciever so sit tight. Your contract is with the fit out contractor, if Mr Cupboard fitter insists on removing his cupboards tell him your are not happy and will not pay him until your dealings are settled with the fit out contractors recievers. If he does remove them thats fit-outs problem, you could always ask him for a price to re-fit these cupboards raise an order direct and pay him accordingly, but not until your dealings are concluded with the recievers.
This is likely to take some time!and my advice is don't let go of your money too quickly.
If you need any more work of this nature done or this job finishing drop me a line (sorry but needs must)

Cheers

steve

[Boosted LS1]

You can tell the cupboard people that title/ownership of the cupboards is disputed so they are staying put for the time being. Also inform them that should they attend at your premises they will be trespassing and you will call the police if you think there may be a breach of the peace. Basically they haven't rights to remove this property at this stage.

[Obiwonkeyblokey]

Thanks Guys

[Brown and Boris]

On the basis of what cupboard man is saying, everyone with Woolworrh or MFI prodicts should beware the knock at the door from a suplier looking to repossess your kitchen or Xmas decorations! After all I suspect those goods remain theirs until paid for by Woolies too. Al TVR ownwers must have had a worrying few weeks last year as well.

[Bernie-the-bolt]

Mt personal experience is simply the title of goods does not pass until the invoice is paid in full.

I had a situation where I had supplied goods to company A who sold them to company B. Company A was teetering on the brink and bounced several cheques, they were about to go bust owing me money I'm sure. I by complete chance found the details of company B and asked them if they had paid for the goods. They had not, which (as I was told at the time) meant I was within my rights to ask for my goods back. Had they already paid company A I would have no been entitled to them. I spoke to the MD of company B, explained my position, offered an incentive and he paid my bill in full.

Company A then got straight on the phone to me and tried to read the riot act suggesting I was being unprofessional and how dare I speak to his customer etc etc. I simply told him to fk off and not ever cross my path again

I think you may be OK as you have paid someone money and you probably won't have to pay again.

Good luck either way

[Ash 996 GT2]

DEpends on their contract with their suppliers.

We often do third party work however, the goods/services are ours until paid for.

We would go in and reclaim no matter what.

[Bernie-the-bolt]

Ash 996 GT2 said:

DEpends on their contract with their suppliers.

We often do third party work however, the goods/services are ours until paid for.

We would go in and reclaim no matter what.

Ash that maybe the case, but I doubt you could just enter the property to retrieve your goods without a long and protracted court battle as it would be trespassing.

I'd still suggest sitting tight for the moment.

[RJD223]

We're in the construction industry (as a sub-contractor) and every single contract issued from any main contractor, that i've ever seen, specifically removes the sub-contractors rights to retention of title.

If this is the case with their suppliers then they have no claim to the goods installed within your offices.

You'll have to have a look at their specific contract before you can say for sure (might not be so easy to do).

We're just on the wrong end of this scenario at the moment where we've installed £45k + VAT's worth of kit and our customer has had a winding up petition taken against them.

Their bank accounts have subsequently been frozen so no one can get paid. We can't recover the kit as the contract specifically removes our right for retention of title.

More so you may find that the sub-contractor is still obliged to complete the works (as we are currently) even though the company is on it's way to being wound up/liquidated; else they may be liable for any liquidated damages/non-completion penalties you may have imposed.

It's all wrong in my opinion but that's typical of the construction industry.

Rick.