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Alex J.
Alex J., Litigator
Category: UK Law
Satisfied Customers: 3665
Experience:  LLB, LPC, DELF
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I had to put a group company into receivership in 2010 due

Customer Question

I had to put a group company into receivership in 2010 due to the non payment of an outstanding bill, the sum was £250,000 a blow the company couldn't survive, we had been pushed into arbitration which took an age and with all the delays etc we had run out of time and money, a ploy I felt the local authority had purposely used to push us to the limit.
The receivers (PWC) looked at the case and continued the process as they thought it was a good case, the short story is they won , the bill plus interest and additional sums included the final award of £365,000, if the authority had paid the bill as was proven I would not have had to put the main bread winning company of the group into receivership.
I would like to know is it possible for me as the managing director of the whole group of companies who has suffered a catastrophic loss in a group company sue the local authority for the loss of the company.
Brendan XXXXXX
Submitted: 1 year ago.
Category: UK Law
Expert:  Alex J. replied 1 year ago.

Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you - did the company go into receivership or administration? Did the company exit administration or was it liquidated? Kind regards AJ

Customer: replied 1 year ago.
Hi AlexAfter taking professional advice we had to call in the receivers otherwise the non payment could put the other group companies in serious difficulties, the company is in liquidation and as I'm aware it is still ongoing, the liquidators fees have been astronomical and have virtually wiped out all the monies received.
The receivers/liquidators Price Waterhouse Cooper have to say the least made a very tidy profit on there involvement.I have discussed this issue with others and there seems to be an opinion that my position as the MD of the Group and the Group losing an asset which was the main bread winner within it, if I was to sue the local authority regarding the loss of the asset due to their non payment in the first place, any monies gained in an action would belong to the company that had the agreement not the overall owner of the group, I'm not of that opinion and I feel I need to find a different angle to approach this case.
I'm looking to put in multiple Freedom of Information requests to the local authority to see if there was anything in council meetings or emails that may show they deliberately caused the original non payment, I'm thinking there must me some way to progress it.RegardsBrendan
Expert:  Alex J. replied 1 year ago.

Hi, Thank you. Was the debt with the local authority a contractual debt? Kind regards AJ

Customer: replied 1 year ago.
Hi Alex,The company was Called Windowman UK Ltd which was a manufacturer and installer of upvc/vinyl Windows, as part of the contract we also had to install Composite Doors which at the beginning of our first contract we bought in from a specified door supplier named by the council, this was a tendered contract.We won several tendered contracts prior to becoming the specified partner for the council for the supply and installation of Windows and Doors.Windowman Group Ltd owned Windowman UK Ltd, I believe Windowman Group Ltd should have a case to sue the council for the ultimate loss of the company due to their original non payment.RegardsBrendan
Expert:  Alex J. replied 1 year ago.

Hi, Thank you. Did the council receive the benefit of the service? At best you could buy the debt from the administrator, but that assumes the administrator has not already sued the council for the debt? Kind regards AJ

Customer: replied 1 year ago.
Hi AlexThe situation was I had started an action against the council for the non payment, we were forced down the route of arbitration which is supposed to be a better option but it took an absolute age after one delaying tactic after another by the council, while this was going on we were having to still do our work and run the company, it became apparent that we were in a very difficult position and I think it was a definite ploy by the council, we ran out of time and money to continue the process, we had to make a decision as I stated previously we had to call in the receivers.
They obviously looked at this case and due to the amount of money to be gained they got a conditional fee agreement with solicitors ( Something that was never offered to us by our own Solicitor ) and felt the case was a strong one and ultimately won the case, the outstanding bill was paid in full plus extras and interest, the reason for my question is, as it was proved that the bill should have been paid ultimately we lost the company because of that non payment and as such the group company which owned it has suffered a massive loss as this company within the group was the biggest bread winner.
I would like to know if I had a potential case to sue the council for the loss of the company due to their actions and underhand tactics, specifically as we were at the time in a full partnering agreement with them.RegardsBrendan
Expert:  Alex J. replied 1 year ago.

Hi, Thank you. I do not think an action of this nature will be successful. I do not think a court will hold the council responsible for the dissolution of a private company because it refused to pay. There is a chain of events, whereby the council cannot be held responsible for the overall financial health of this company, the council could not have not that the company's existence was dependent on one contract. Now you mentioned a partnership which is a slightly different matter. What did this "Partnering Agreement" actually say? Were you partners in business or were you just a supplier to the council?