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Paying liquidated firms



Arthur

Well-known member
Jul 8, 2003
8,537
Buxted Harbour
Off topic and question for you all knowing NSC types.

Company A is a supplier to Company B. Every month Company A invoices Company B and every month Company B pays Company A into Company A's bank account..... or so Company B thought.

It's well known at Company B that the owner of Company A has several companies but what is unknown is that Company B has been getting services from Company A but paying money into the bank account of Company C.

Company C gets put into liquidation but the owner of Company A & C neglects to tell Company B so Company B pays Company A invoice as per normal into the bank account of Company C which has been now been liquidated.

Legally where does Company A stand? The bank won't return the money to Company B (we've asked) and as Company C is no more Company C can't give the money back to Company B as I assume the money has just been swallowed up in the debt Company C had?

This has just happened to me, I feel really sorry for Company A as they are a two man band and it's quite a considerable sum of money (certainly to a small business) but it's really his own fault. Has he got any chance of getting his money back? The latest is he's spoken to a lawyer who thinks it can be done but is going to charge him about a 1/3 of the invoice amount to do it. He's not the sharpest tool in the box (as I'm sure you've guessed), is he being taken ride?
 


Goldstone1976

We Got Calde in!!
Helpful Moderator
NSC Patreon
Apr 30, 2013
13,763
Herts
Ouch.

Did Company A give Company B the bank details of Company C originally? What does Company A's invoices say about payment & check the latest one(s) too - i.e. have the payment instructions changes recently? What are the legal statuses of Companies A and C - ltd or just T/A?

If you'd like to PM me, I may be able to provide some help....

The only way that Company B may have to fork out again is if Company A can prove that they told Company B to pay Company A, but Company B erroneously paid Company C instead.
 


Arthur

Well-known member
Jul 8, 2003
8,537
Buxted Harbour
Ouch.

Did Company A give Company B the bank details of Company C originally?

Yes they did. They were a company we've dealt with in the past also but they've not been operating as such for a while. I assume they owed a few quid and he was just winding them up write off that cost. Just daft that he didn't change the bank details over to the new company.


What does Company A's invoices say about payment & check the latest one(s) too - i.e. have the payment instructions changes recently?

The invoice still had the old (i.e Company C) bank details on it.

What are the legal statuses of Companies A and C - ltd or just T/A?

As far as I know they are separate entities.

If you'd like to PM me, I may be able to provide some help....

Thanks but it's fine. I was more interested to know if it was possible for the fella to get his money back. As I said he's a nice guy just not the sharpest tool in the box.

The only way that Company B may have to fork out again is if Company A can prove that they told Company B to pay Company A, but Company B erroneously paid Company C instead.

It's completely his fault and I'm not worried about us having to pay again and he knows that as well. He'd be daft to try and claim that as a) we've got the invoice with the wrong bank details to prove it and b) we've got to be his biggest customer so he'd be biting his nose to spite his face if he wanted to take us on for a months money.

Cheers for your help.
 




dougdeep

New member
May 9, 2004
37,732
SUNNY SEAFORD
Surely the answer these days is for Company A to go into liquidation then reform with the same staff and just a slight alteration to it's name. Something like Company A+
 




One Love

Well-known member
Aug 22, 2011
4,345
Brighton
Company C gets put into liquidation but the owner of Company A & C neglects to tell Company B so Company B pays Company A invoice as per normal into the bank account of Company C which has been now been liquidated.

Legally where does Company A stand? The bank won't return the money to Company B (we've asked) and as Company C is no more Company C can't give the money back to Company B as I assume the money has just been swallowed up in the debt Company C had?

Has a liquidator been appointed for Company C or is it being wound up by the directors?

I would have thought legally the bank should return you the money. Company B has no financial relationship with Company C and they are two completely separate entities. No goods or services provided, no invoice raised and no amount owed so surely you could argue the money has been transferred in error and should be refunded by the bank.
 




drew

Drew
Oct 3, 2006
23,007
Burgess Hill
Morally, as he owned company C and presumably it is being wound up and paying off debts, in effect he has had his money and that is paying off debts he has accrued. I guess company C was in the same line of work as company A so is he just winding up one company to avoid paying debt. If so, then tough luck. As some one else alluded to, it's a bit like football clubs that go into admin and then end up paying 5p in the £ of their debt but retaining all the original assets etc. This is of course not a legal opinion but how often does the law reflect morals!
 





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