Business into Administration

[jexjexjex]

Right.

 

First off, I'll clarify the title of this. It's not actually a theatre related issue and it's not my hobby/business that's gone to the wall, It's a cowboy builder issue at my house.

 

I just wondered if anyone had any experience of actually owing a business money for incomplete work or for services that hadn't been provided when they went bust?

 

Mods, if this isn't appropriate as it's not production related, then feel free to close it off.

[mac.calder]

It all depends on the administrators. If they decide to keep running the business to hopefully complete a number of jobs and receive full payment (allowing them to pay off more creditors), then the job may get completed and you will be charged as normal. If the job is not completed, they may engage the services of another contractor to finish the job, and split the fee. They may also sell all existing/outstanding contracts to another contractor, resulting once again in the job being finished and you paying the fee. They may not finish the job and send a partial invoice, leaving you grounds to refuse payment, or they may not charge anything at all.

[StevieR]

Our van rental supplier was put into liquidation the other year. The administrators made sure that we paid our remaining invoices to them. An incomplete job though, is another matter but as the others have said it will depend on what the administrators choose to do with such jobs. I would get in touch with them asap to find out what's going on.

 

Steve

[ImagineerTom]

In a nutshell - any money you've paid to them already (and where work or service's haven't yet been done) you can kiss goodbye to. Even if there are unused items left on site (for example if they're building an extention and the bricks have been delivered) those assets belong to the liquidators and will probably be returned to their owners rather than having to pay them.

 

You won't be obligated to pay for work(s) not actually done - there's a good chance the liquidators may /try/ and ask you to pay but it's only him doing his job and you can't be compelled legally to pay for something that hasn't been done. There's a slim chance that your job will be taken over by another company or the liquidators may authorise a sub-contractor to complete your job so that they can then bill you for the full amount but in reality this is VERY unlikely; all works undertaken/arranged by the liquidators are billable (typically at several hundred pounds per hour, even for low level Admin like making phonecalls to arrange a substitute contractor) and as a result the billable costs incurred by co-ordinating the completion of the job are usually more than the profit that would be made by completing the job.

 

It would be worth investigating sub-contractors/suppliers of your own to complete any outstanding jobs and paying them direct yourself as you'll be waiting an eternity for the liquidation process to be completed.

[Stan Hope-Streeter]

... all works undertaken/arranged by the liquidators are billable (typically at several hundred pounds per hour, even for low level Admin like making phonecalls to arrange a substitute contractor)

 

I have been stitched up several times over the years by hire companies going bust. On each occasion, the paperwork has included itemised listings of the administrators fees (and yes, they do charge hundreds of pounds per hour).

Every time, by some most mysterious coincidence (or perhaps not) their total bill has been almost equal to the residual value of the company. Thereby ensuring that we freelancers and the other creditiors ended up with nothing.

 

Oh and while we're at it, here's another mysterious coincidence...

Each time this happened, the administrators sold the assets at a knock-down price to friends or associates of the original owners, who then employed at least one of said owners in a new company which carried on exactly as before but under a different name.

 

I'm not Marcellus, but it's pretty clear that something is rotten in the state of, er, England.

[Dan Gruner]

... all works undertaken/arranged by the liquidators are billable (typically at several hundred pounds per hour, even for low level Admin like making phonecalls to arrange a substitute contractor)

 

I have been stitched up several times over the years by hire companies going bust. On each occasion, the paperwork has included itemised listings of the administrators fees (and yes, they do charge hundreds of pounds per hour).

Every time, by some most mysterious coincidence (or perhaps not) their total bill has been almost equal to the residual value of the company. Thereby ensuring that we freelancers and the other creditiors ended up with nothing.

 

Oh and while we're at it, here's another mysterious coincidence...

Each time this happened, the administrators sold the assets at a knock-down price to friends or associates of the original owners, who then employed at least one of said owners in a new company which carried on exactly as before but under a different name.

 

I'm not Marcellus, but it's pretty clear that something is rotten in the state of, er, England.

 

Yes, this is just another reason why I hate Lawyers, Administrators and the people connected with them. I have known people (creditors) that have been made to suffer greatly from the actions of these people, never mind the company that went under in the first place (through no fault of its own).

[lightsource]

I just wondered if anyone had any experience of actually owing a business money for incomplete work or for services that hadn't been provided when they went bust?

 

Make notes, and keep printed copies of everything.

Take photo's of the work done, and the state of things so far.

 

Remember the liquidators can only work with the job information the company supplied them, and as people leave the sinking ship, then things can become vague.

 

Also, make notes on all correspondance with the liquidator, dates, times, telephone numbers, contacts and details of all conversations.

[Brian]

... when they went bust?

In what way have they gone bust?

 

There are a number of way a company ceases trading which may affect the final outcome for you. If it's a 'phoenix' job then you may find the original builder is in a position to complete the work for you.

[jexjexjex]

Thanks troops for the insight.

 

Having found out a bit more through an accountant friend of mine making a few phone calls, it's defineitely as Brian says a phoenix job as the bas builder has already started up another company with a suspiciously similar sounding title!

 

Officially I don't know that he's gone bust, in that the administrators have not contacted me, but neither has he and we were already in "formal dispute" over any further payments being made until the job was finished to our satisfaction, which he was advised of - twice.

 

Aapparently in law because the company cannot now complete the job, any agreement there may have been to carry out the works is now void - breach of contract apparently - and we're at liberty to get the job completed by whoever we choose, which is good because, given the questionable quality of some of the finishings, he's not getting back across the doorstep!

 

What Trading Standards have advised is just as has been suggested here already - get the job finished using the remaining funds, but get a couple of quotes for everything and keep the paperwork.

 

They've also advised not to get in touch with the Administrators and to let them come looking for the money because, officially, I'm in dispute with Bob T Builder esq. as against dealing with some huge accountancy conglomerate. Apparently, if they get a letter outlining things, they'll pounce on it as a way of getting back some cash quickly. If I don't, then they have do all the digging through paperwork and spend loads of their time on it, thereby making what they could/can claim back less and less worth their while.

 

They've also suggested that because this is an "unsecured debt" the administrators are actually unlikely to come looking for payment, but I'm not taking the chance!

 

Copies of everything to date are already in a file and are about to be added to!

 

I'll keep you all posted in due course.