​Related Case Studies

  • Debt Recovery for a Factoring Company
    The Client is a factoring company and we were pursuing recovery of the money due to them under the terms of a written indemnity, which had been provided to them by a Director of the Company, which had gone into liquidation.

    The Director refused to pay the money due, claiming that there were invoices he had submitted to his customers, and if the Client collected these invoices, there would be sufficient funds to repay this debt. He further claimed that the client was in breach of the factoring agreement by failing to recover these funds.

    We were able to demonstrate that under the terms of the factoring agreement, the client was under no legal obligation to recover these funds. They were obliged only to telephone a certain number of customers to verify they had received the goods for which they had been invoiced, and to send out monthly statements, both of which they had done. 

    Judgment was successfully obtained against the indemnifier. However, he continued to refuse to pay, he claimed to be unemployed and have no assets, he refused even to submit a realistic payment proposal. In view of this, our client was left with no alternative than to pursue bankruptcy. A Statutory Demand failed to prompt any response, other that another refusal to pay, so a bankruptcy petition was issued. 

    The bankruptcy hearing was some three months away when the Debtor was served with notice of the Hearing. He waited until 24 hours before the bankruptcy hearing to instruct his solicitor to contact us to make payment. We recovered our client’s total debt, together with all bankruptcy costs, on the afternoon before the bankruptcy hearing was due to take place. 
     
  • Recovery of bad debt from Administrator
    Acting for a globally known and respected company, John Spratt received urgent instructions to advise on the possibility of their being able to recover a bad debt from a well-known retailer in administration.  The problem was that John’s advice to the client had to be that the Administrator was not in a position to pay the debt of any creditor from the company’s assets except (a) pro-rata with all other unsecured creditors at the end of the debtor company’s insolvency process or (b) if the payment was necessary in all the circumstances in order to maintain the business of the company in administration under his management pending a possible sale.

    Working closely with his client’s management team, and having enlisted the help of a colleague in the insolvency profession, and also with the help of John’s Partner Hitendra Patel, John was able to negotiate and draft an agreement with the Administrator that he would pay the whole of his client’s substantial debt rather than face the consequence of their withdrawing their services from the company in administration. This work was done largely over one weekend, with frequent written communications and many telephone calls.

    John’s clients were delighted with a wholly successful outcome, which seemed at the beginning to have been against the odds.
     

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