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Hi, sorry about this situation. First thing you will need to put your request for payment in writing for whatever is due. Such a letter would go something like this, "Dear Mr. Ms.______________ as you know we have provided shipments to your organization/business and have invoiced you. We would like to maintain a good relationship with your company, however several of the invoices we have sent are past due in the total amount of $___________ (then list the invoices). As yo know we have been working with you in terms of payment but the balance due is now too large to ignore. We would appreciate a phone call and immediate payment of the past due balance. We have not opted to seek local counsel. However if payment is not received in house within five days, you will leave us with few options to keep us whole. We hope such action will not be necessary. This letter is sent without prejudice to all of the rights and remedies our company may have at law,, or in equity, all hereby reserved on our behalf" Sincerely, ***** *****
Now to be sure they may file for bankruptcy but you may be able to get immediate payment or your good back by "reclamation" Otherwise, it is true that if they file for bankruptcy you probably will not be paid in full for your invoices. I think the best thing is to make as much noise as possible so you get some payments in while they have not filed for bankruptcy. If they do file, definitely submit a claim. You can contact me for more information and I will assist. Hope this has helped. Please let me know if you need more details or if you can rate me. I am a NY Attorney with this sort of experience so please let me know if you need more details. Best regards, ***** ***** Esq.
Hi Nishat, are your shipping terms FOB? If so then probably the people who have received the goods now have title. OK, so by law, they must tell you if they have filed for bankruptcy because if they do it would be illegal for you to try and collect. There is a Federal Court Website called Pacer that would have the information online if you wanted to check. However, it is their obligation to tell you immediately. By the way, if they file for bankruptcy but accepted goods after the filing, then the new goods would not be covered by the bankruptcy and they would be subject to payment. I know you are caught in the middle. You want the business but need to be careful. If your customer is in the NYC the check Pacer for the Federal Bankruptcy Court for the Southern District or the Eastern District of New York State. If they file for bankruptcy please let me know and I can help you with the forms at no charge. It's not a large task Best, Sean
Hi Nishat, yes I think that either they or their customers own the goods. In any case I don't think it's feasible to try and reclaim good that are in the hands of ultimate customers. IN that case, I don't think that you could do a charge back with the customers. Most likely they paid your customer and have no interest in the matter. That is an interesting point though. I don't think that the paychecks are a good sign of bankruptcy. Many times a a company could reorganize without losing a step in terms of operating capital. Really, it is to their benefit to tell you if they have filed and are staying in business. because it takes them off the hook for all of their past due obligations and leaves them funds for new merchandise. It is a mess. Nishan--btw, I'm heading out for awhile so if you have any more questions, I'll get right back to you. If I have been helpful in the meantime I would be grateful if you could rate me. I will still be available to you. Thanks, Sean