28 replies to this topic

[Vertster]

I just receive notification that one of my clients has declared bankruptcy. And they still owe me a bunch of money! Now what? I have also been notified that I may have to "give back" some of the money they have paid in the last 90 days, because I received "preferential" treatment?

Anyone else on here been through this process and want to give me some advice?

[patrickh]

The client didn't tell you about this before you got the official letter? Thats pretty rude if he didn't. Anyways, I'd just hold on to what money you have gotton from him already and tell the lawyers they will have to peel it from your cold, dead hands

[Vertster]

I just recieved an email from her. Not the "official letter." I am considering what I should do, other than call my attorney.

[air-dog]

> have also been notified that I may have to "give back" some of the money they have paid in the last 90 days, because I received "preferential" treatment?

That seems a bit rich from them. I take it you got paid for some work you have completed and got some type of notification from the client like a sign off form or an email saying s.?

I would say that thats your money anyway. Do you think that the liquidator is trying it on?


...... Tell um you've spent it so they cant have it

<edit>

I just recieved an email from her.

Shes trying it on.

In English law you can say this to a creditor
"When I've got it, You can have it, but I aint got it, so until then... you aint getting it"

Theres a bitmore to it then that..... but thats the basic

</edit>

Edited by air-dog, 19 September 2003 - 12:40 PM.

[Vertster]

She says that its the bankruptcy trustee that would try to get it out of me, not herself. I need to research this a little bit and see what this means. It could be part of the US bankruptcy laws, in which case I may be hosed.

[air-dog]

Hope all goes OK Vertster,

I don't know much about US bankruptcy laws but a person is expected to get paid for work they've done aren't they? Even if you haven't completed the work, I would see if under US law, you can complete the work and then that becomes part of your clients sellable assets.

<EDIT>

Keep the money somewhere safe, dont give in easily and stick to your guns.

</edit>

Edited by air-dog, 19 September 2003 - 11:39 AM.

[Keyword Placement Ltd]

Wow, some people really like to intimidate others.

Did you have a written contract with your client, if so how does it cover payments, in particular in advance?

Was the contract governed by UK or Amercian law?

[polarmate]

How can funds paid to you before they declared bankruptcy be preferential treatment? Shouldn't this apply only to funds/assets that are still held by the company after they declare bankruptcy.

[Vertster]

This is in the United States. I kind of expected this after not being able to collect for 120 days!

I think they must figure that all creditors need to be put on equal ground, going back 90 days or something. She gave me preferential treatment compared to other people she owes.

[Haystack]

That sucks, verster. Have you thought about finding a client in the same industry who may be interested in the work you've done? If they can't honor their side of the contract there's no need to worry about a non-compete.

[deborah2002]

Maybe I'm missing something here, but if you had a contract with them, then doesn't that consitute YOU being one of their creditors?

As far as I know, as part of the bankruptcy they can't force you to give money back.
If, as I am assuming, you are considered a creditor, how can they ask you to give back money (and for what? To pay ANOTHER creditor?).

Tell 'em to jump in a lake AFTER you get the money owed to you!

Good Luck!

deb

[Vertster]

True enough. Plus I have the database of targeted leads we generated in the past year. I might be able to sell them, although since they have paid probably 80-90% of the total billed to them over that period, I am not certain I can claim ownership to their list

[Vertster]

And yes, I am listed as a creditor. Deb- it sounds like you hit the nail on the head. They want to "level the playing field" among creditors, apparently.

[Keyword Placement Ltd]

mate,

dont worry about anyone else. You look after number one here!

Nobody would ever dream of thinking of you in such a case, so why should you return the favour. Business is business - you got a partial payment which is better than nothing at all i guess.

It does highlight a difficult position though - How long to chase a client without being pushy and possibly losing any future good relations.

I've been there before myself but I declared very clearly from day 1 that I do nothing without payment. I dont even move my backside from the chair ( which accounts for its weight)
I let clients go 30 days, and on the 31st I am on the phone asking for payment - this tells every single one of my clients I am on the ball and they cant mess around

I do feel for your position though. Hang on to whats rightly yours!!

[Scottie]

Don't do anything without talking to a lawyer; especially don't give them any money back.

People are allowed to bully you in cases like this but often, they don't really have any legal recourse. It depends on a lot of things.

Sorry to hear it- what a huge pain!