Not getting paid from company, Where do i stand?

[waiteu2]

Bit of a long one this
Basically i own a fit-out company who has done a lot of work sub-contract to a facilities management company and for 6 months been getting paid on time.
The amounts were small at the beginning increasing each month for the past 6 months.Works were carried out at one of their clients sites.

However this month its £17k and on the 1st November a further £51k is due.
The company have already told me they cant pay and on Monday will tell me if theyre going bust or not.
Im gutted i did not carry out due diligence at the time but with regular payments coming in i became a little complacent.

Ive loads of questions and will be seeking legal advice as soon as possible however one question i have is regarding the outstanding £51k.

The work that this relates to has not been paid to the Faclities managent company as its not due into them while month end.

Is it legal for me to remove my goods ie hundreds of metres of steel fencing,Control room desks/stud walls and partitions etc.. which the client has not yet paid the facilities management company for as yet?

I feel im just sat waiting for the client to pay the facilities management company who are point blank not going to in turn pay me.

No work or invoices have ever been disputed and the client is really happy with the work and wants us to continue with them direct should the FM compant go bust.

No idea where i stand at all.

Cheers. Craig

[smalleyboy1]

I would consider removing any loose materials from site and worrying about the legalities later. What are the terms of your contract with the FM company regarding ownership of work done but not paid for? Do you retain ownership until paid, sometimes known as a Romalpa clause?

If you did remove everything from site and the FM remains solvent, you may be kicked off the job. Would that be a larger long term loss than the current sums at risk?

No doubt somebody with legal knowledge will be along shortly, or somebody who has had a similar experience previously.

[bloater]

Most suppliers we use have a clause that it is there property until payment in full has been made, do you have any such clause?

[Lammylee]

I was owed £7K from a millionaire property developer who’s company went bust and still lived in a castle, and drives and Aston Martin and never got a penny back.

My advice would be to get all of YOUR materials back immediately and consolidate your losses!

[waiteu2]

Most suppliers we use have a clause that it is there property until payment in full has been made, do you have any such clause?

Theyre in our general T&C's but im now doubtful these were ever sent.
My core business is hotel refits which we have been doing for years with zero issues. Ive just gotten lazy and gutted ive taken my eye off the ball.
Does that now leave me high and dry?

[Chris_in_the_UK]

Theyre in our general T&C's but im now doubtful these were ever sent.
My core business is hotel refits which we have been doing for years with zero issues. Ive just gotten lazy and gutted ive taken my eye off the ball.
Does that now leave me high and dry?

I would remove the stuff you have not been paid for.

If they cannot pay you, I doubt they could chase you for this.

[waiteu2]

I would consider removing any loose materials from site and worrying about the legalities later. What are the terms of your contract with the FM company regarding ownership of work done but not paid for? Do you retain ownership until paid, sometimes known as a Romalpa clause?

If you did remove everything from site and the FM remains solvent, you may be kicked off the job. Would that be a larger long term loss than the current sums at risk?

No doubt somebody with legal knowledge will be along shortly, or somebody who has had a similar experience previously.

Id be happy not to work for them at all.
We took the work on as Hotels were closed during Covid so work became a little scarce, however thankfully they seem back up to speed now.

[BRGS]

Painful situation. You could remove goods against the 17K owed anyway as title to the goods remains with you until payment. If that is on the back of your invoices and no other contract exists then you can basically stand that up. In any case you can assert it.

Can you approach their customer and offer to finish up the work for a direct payment from them? It's bad form but not if your customer won't pay you.

If they go bust your chances are almost zero of recovering anything.

[waiteu2]

Painful situation. You could remove goods against the 17K owed anyway as title to the goods remains with you until payment. If that is on the back of your invoices and no other contract exists then you can basically stand that up. In any case you can assert it.

Can you approach their customer and offer to finish up the work for a direct payment from them? It's bad form but not if your customer won't pay you.

If they go bust your chances are almost zero of recovering anything.

Unfortunately all works are complete however there are future works required which the FM companies client want my company to carry out.
Difficult situation as the client only want us to carry out works on there premises as we have developed a good relationship.
Im of the mind that ill be offered some form of payment or maybe over a period of time but after looking at the directors histories of running companies of which all have gone into liquidation last one being £500k im certain theyre just fraudsters playing the system.

[Dave O'Sullivan]

Firstly, get that £51K invoice in sharpish. Don’t wait for Nov 1st.
Secondly, talk to the primary business. Not ideal but they’ve been stiffed too and if you explain that you’ll be removing your materials due to non payment then they may wish to make some offer or recompense to lessen their disruption. Neither of you will win, but you might not lose too much.

[smalleyboy1]

One for somebody with insolvency knowledge but I recall if you started legal proceedings against them for any outstanding debt and they went bust, you may be treated as a preferential creditor and be at the front of the queue for payment.

I think there is hierarchy of creditors and those with court judgements and secured loans get paid first.

I’d suggest removing goods, materials etc as a starting point because if they do go bust, the site is likely to be secured by an administrator of the firm.

Are you a member of any trade body, can they provide access to legal advice?

[TKH]

Horrible situation…

Sounds like they’ve possibly already decided they are popping company ….(may have been pre planned once job at 99%)…and might be phoenix type hard to know..

But if your concerns are doing anything wrong yourself its highly unlikely anyone will persue you if you rapidly remove ‘your’ materials etc particularly given the 17k outstanding irrespective of the 51k…. “Title does not pass” etc…

If the materials are reusable great …you lose the labour….

Once insolvency practitioner or receiver appointed access and title might be more challenging..


But its still a judgment call only you can make as lets say its a cashflow issue they resolve next week..

Tough call but you know the client and have a feel..

Good luck sorry to hear your woes…

[adrianw]

If they go into administration, the administrators won’t care about you, you’re just a creditor way down the queue, if you could sell the fittings elsewhere I would go and remove them, or at least make it clear to the customer that you will be doing this in the next seven days, this will push it one way or they other, as someone has already said make sure all of your invoices are in, the administrators won’t care about you, they’re interest is in, their fees, the revenue, the banks, secured creditors, any creditors they need, then unsecured creditors but they won’t give a toss about them.

To recover anything you can, be absolutely ruthless, don’t be nice and don’t give a toss about anyone else.

[waiteu2]

Thank yo all for the advice. It really is much appreciated.

With regards to removing goods they are pretty much worthless however the ckient is a high profile energy company and the last thing they want is bad press or themselves being associated with non payment.
It is also a vey secure site but im confident we can gain access as we are well kown to the staff.
I think just the threat of our removing goods will start the phones ringing as the client will insist no goods are removed.
The main concern is that i know they (the FM company) have a payment of approx £70k due in on the 1st Nov from the same client which is in fact 100% of work that i have carried out.
It seems wrong that i have to sit and knowingly watch this happen whilst the directors distibute the cash as they see fit.

After doing more research i am certain that the way the FM companies are set up its basically fraudulent. Severeal companies with similar names.Directors with multiple business gone bust for large sums of money (£500k plus) per company.

The same directors seem to be acting as consultants for the FM company i am invoicing, with the sole director pretending to have no access to the bank as the 'consultants' are running the show.

[adrianw]

Assuming you will never deal with them again whatever the outcome, you could put in a winding up petition form, if they aren’t going bust it will concentrate their minds,

[leo1790]

I feel for you, its a horrible position to be in.
Happened once to me but it was 'only' £5k. When I received the statement of claimants and the directors report I knew we wouldn't be getting a penny, and we didn't.
I'd follow the advice given on here if possible and try to reclaim any materials you can.

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[MB2]

Assuming you will never deal with them again whatever the outcome, you could put in a winding up petition form, if they aren’t going bust it will concentrate their minds,

Agree with this - speak to Safe Collections and get a debt collector onto them fast and don't fall for the "you need to look reasonable". If they don't want to go bust yet they might pay you or give you something - especially if it is coming from a debt collection firm.

If there is anything on site you can take away - do, otherwise if you can't ID it all as yours go in there and mark it so if they become insolvent you can at least get it back (I know you said it was difficult/not much use but do try).

I would prepare for insolvency and not getting paid I am afraid to say - been there a couple of times sadly and it hurts.

I don't think can offer much more advice but feel to PM if you want have been through it a few times - you need to accept it is happening and do everything NOW to mitigate the impact on your business.

Best of luck

[Bonny Marco]

Plenty of good advice already. I'm guessing you might have professional indemnity insurance. If you do, it's worth checking whether it covers you for legal advice or expenses or offers a legal helpline to assist in this situation. My old PI used to include legal advice cover, so I thought I'd ask.

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[adrianw]

Plenty of good advice already. I'm guessing you might have professional indemnity insurance. If you do, it's worth checking whether it covers you for legal advice or expenses or offers a legal helpline to assist in this situation. My old PI used to include legal advice cover, so I thought I'd ask.

Sent from my DN2103 using Tapatalk

His problem is, if administrators get appointed they make the rules, I found out the hard way in 2009, a company took me for a lot of money (480k) the only thing that actually happens is your creditors check that you are solvent

[xellos99]

You need to see a pro ASAP, asking on a forum wont get you anywhere

[Sinnlover]

You need to see a pro ASAP, asking on a forum wont get you anywhere

What sort of Pro would you suggest?
Lawyer?
Bailiff?
Administrator?
Hit man?

OP its a terrible situation to be in. I hope you are able to limit your losses, I would remove what I could asap

[learningtofly]

Thank yo all for the advice. It really is much appreciated.

With regards to removing goods they are pretty much worthless however the ckient is a high profile energy company and the last thing they want is bad press or themselves being associated with non payment.
It is also a vey secure site but im confident we can gain access as we are well kown to the staff.
I think just the threat of our removing goods will start the phones ringing as the client will insist no goods are removed.
The main concern is that i know they (the FM company) have a payment of approx £70k due in on the 1st Nov from the same client which is in fact 100% of work that i have carried out.
It seems wrong that i have to sit and knowingly watch this happen whilst the directors distibute the cash as they see fit.

After doing more research i am certain that the way the FM companies are set up its basically fraudulent. Severeal companies with similar names.Directors with multiple business gone bust for large sums of money (£500k plus) per company.

The same directors seem to be acting as consultants for the FM company i am invoicing, with the sole director pretending to have no access to the bank as the 'consultants' are running the show.

Is there any mileage in discussing/determining whether the client company can step in and do something for you? The dual motivation would be to stop the removal of goods/materials and to ensure you're around in the future to carry on working with them on a direct basis. I understand that their contract is with the FM company for whom you subcontract, but there may be some kind of workaround and it can't hurt to talk to them before they settle any outstanding invoices.

[adrianw]

You need to see a pro ASAP, asking on a forum wont get you anywhere

If administrators get appointed what sort of pro would you suggest?

[adrianw]

Is there any mileage in discussing/determining whether the client company can step in and do something for you? The dual motivation would be to stop the removal of goods/materials and to ensure you're around in the future to carry on working with them on a direct basis. I understand that their contract is with the FM company for whom you subcontract, but there may be some kind of workaround and it can't hurt to talk to them before they settle any outstanding invoices.

Good suggestion, I didn’t realise the OP was dealing with a sub contractor.

[Kingstepper]

Good suggestion, I didn’t realise the OP was dealing with a sub contractor.

He is the sub-contractor.

[murkeywaters]

Legally I'm not sure you can just enter a clients premises and start stripping out your goods, yes they are yours but its on someones else's property which would overrule your situation, isn't that what court orders and bailiffs are for?

Hopefully you get good advice and more importantly your money back..

[Kingstepper]

Legally I'm not sure you can just enter a clients premises and start stripping out your goods, yes they are yours but its on someones else's property which would overrule your situation, isn't that what court orders and bailiffs are for?

Hopefully you get good advice and more importantly your money back..

He's also said that they they are pretty much worthless, don't see why people keep suggesting grabbing them back TBH.

[murkeywaters]

He's also said that they they are pretty much worthless, don't see why people keep suggesting grabbing them back TBH.

He also said in the first post -

Is it legal for me to remove my goods ie hundreds of metres of steel fencing,Control room desks/stud walls and partitions etc.. which the client has not yet paid the facilities management company for as yet?

[learningtofly]

Good suggestion, I didn’t realise the OP was dealing with a sub contractor.

He is the sub-contractor.

It seems that the FM company is the main contractor, and the OP is the FM company's sub-contractor. I was suggesting that a dialogue with the client might offer some hope, and certainly can't hurt (particularly whilst the works in question have still to be billed and/or paid for).

I'd also add that - if there's a realistic chance of getting work direct from the client in the future - letting matters become adversarial is the last thing the OP needs.

[Kingstepper]

He also said in the first post -

Is it legal for me to remove my goods ie hundreds of metres of steel fencing,Control room desks/stud walls and partitions etc.. which the client has not yet paid the facilities management company for as yet?

Okay, doesn't add up!

[MB2]

He's also said that they they are pretty much worthless, don't see why people keep suggesting grabbing them back TBH.

Because if they go insolvent in two years he may get back 1p on the UKP so anything is better than nothing at this stage.

[Kingstepper]

Because if they go insolvent in two years he may get back 1p on the UKP so anything is better than nothing at this stage.

Well he said it (and there will obviously be a cost in retrieving hundreds of metres of fencing and such like).

There will also be the cost of possibly antagonising the client who (as suggested above) might be best kept on board.

[Spoonbed]

Okay, doesn't add up!

I’m pretty sure you will find that once you have installed the goods into the building, then they are no longer yours( even though you may state contrary on your invoice regarding title etc)
This is the legal advice I was told when it happened to me ( AC Company)
I did actually think balls to it though, and did go in and remove the units( no comeback, but obviously still didn’t get paid)

[waiteu2]

Is there any mileage in discussing/determining whether the client company can step in and do something for you? The dual motivation would be to stop the removal of goods/materials and to ensure you're around in the future to carry on working with them on a direct basis. I understand that their contract is with the FM company for whom you subcontract, but there may be some kind of workaround and it can't hurt to talk to them before they settle any outstanding invoices.

Hi Tony
Thanks for responding.
Thats my thoughts exactly. i have a very good relationship with the FM company's client.
I did talk to them yesterday and they intimated depending on outcome future works would come direct to me.I havent broached the subject that as they havent yet paid the November invoices (51k) could they possibly withhold payment to the FM company until this is resolved. in other words as the goods have not been paid for title stays with me and they could end up paying for something that is about to be removed.

A couple of guys there have even told the FM company that they only wish my company to carry out any works for them so thats a small silver lining.

As an aside the FM company have a couple of other clients with whom they carry out a fair few quids worth of work so maybe they won't want to go bust and are looking at ways of a workaround.

I have a meeting with the FM company on Monday so ii think one way or another i'll know a little more then.
1st thing monday though is seek professional advice.

Thanks
Craig

[waiteu2]

In response to some of the above replies regarding removal of materials,its more to do with actually forcing a dialogue between the FM company and their client.
Ie inform the client that im about to remove my goods which will force them to to call the Main contractor(FM company) and demand a resolution.

The client is a high profile fuel company and the last thing they want is any awkwardness on their premises so the taking back of materials is more of a statement to force dialogue rather than to actually retrieve any monetary value.

Hopefully it wont come to that. However i am preparing for the worst.

[hilly10]

Get everything off site that’s yours, as said you will be way down the list when it comes to any creditors. I got took by one firm for 7k and then another company for 32k they then had the Gaul to set up a new company a week later and there is nowt you can do.

[murkeywaters]

Get everything off site that’s yours, as said you will be way down the list when it comes to any creditors. I got took by one firm for 7k and then another company for 32k they then had the Gaul to set up a new company a week later and there is nowt you can do.

Again all well and good retrieving your goods if the energy company allow, if not your entering someone’s property and removing questionable items on who owns them, your breaking the law and probably turning any dialogue you might have into a shut door.

It’s what court orders and bailiffs are for, that said I would be angry in the OPs position..

[adrianw]

Again all well and good retrieving your goods if the energy company allow, if not your entering someone’s property and removing questionable items on who owns them, your breaking the law and probably turning any dialogue you might have into a shut door.

It’s what court orders and bailiffs are for, that said I would be angry in the OPs position..

That isn’t correct, if you can prove it’s your property you aren’t breaking any law, and possession is nine tenths.

[murkeywaters]

That isn’t correct, if you can prove it’s your property you aren’t breaking any law, and possession is nine tenths.

I didn’t think that was the case, if a bathroom fitter didn’t get paid by the client then I can’t see it being correct where he can enter their house and remove the bathroom.

Surely the only way is to instruct the law/bailiffs..

[spud767]

This guy didn't get paid either ... https://youtu.be/MVAa2KeJZsM just saying.

[adrianw]

I didn’t think that was the case, if a bathroom fitter didn’t get paid by the client then I can’t see it being correct where he can enter their house and remove the bathroom.

Surely the only way is to instruct the law/bailiffs..

Unless they are working for the courts, bailiffs and debt collectors have no more fights than you and me.

Edit, rights

[Kingstepper]

Unless they are working for the courts, bailiffs and debt collectors have no more fights than you and me.

Though would probably win more!

[murkeywaters]

Exactly, that’s why I said law and bailiffs, it’s a pain and long drawn out process but really the only correct way to retrieve goods from a property..

[smalleyboy1]

Depending upon the size of the client (energy company) a contractor going bust or not paying sun-contractors probably won’t register in the local press or national press.

You should know more after your meeting on Monday but get some legal advice and see if the client would be willing to pay you directly for all future work.

[MB2]

Hi Tony
Thanks for responding.
Thats my thoughts exactly. i have a very good relationship with the FM company's client.
I did talk to them yesterday and they intimated depending on outcome future works would come direct to me.I havent broached the subject that as they havent yet paid the November invoices (51k) could they possibly withhold payment to the FM company until this is resolved. in other words as the goods have not been paid for title stays with me and they could end up paying for something that is about to be removed.

A couple of guys there have even told the FM company that they only wish my company to carry out any works for them so thats a small silver lining.

As an aside the FM company have a couple of other clients with whom they carry out a fair few quids worth of work so maybe they won't want to go bust and are looking at ways of a workaround.

I have a meeting with the FM company on Monday so ii think one way or another i'll know a little more then.
1st thing monday though is seek professional advice.

Thanks
Craig

Definitely try this and say they can't pass on good title if your not paid. I would even offer them the goods at the price you were charging the FM company so it is an incentive to them to "go direct".

I have been in similar situations and the biggest danger is being afraid to offend the client who, remember hasn't paid you yet I am sure you have paid your suppliers and staff.

[Theboydonald]

You also have to take into account that forewarning them about collecting materials may lead to them ensuring you can't gain access. Hope it works out for you, I was burnt the odd time as a plasterer by shysters property developers.

[jaytip]

Just a thought but is this possible?
You know how much you are owed by the FM company, the client knows how much they have to pay the FM company. Obviously the amount being paid to the FM company is going to be higher than what the FM company is going to pay you, so ask the client to just pay the FM company the difference between the two.
They get to keep the work done, you get what you are owed and the FM company get the % they would have had anyway.

[JasonM]

Just a thought but is this possible?
You know how much you are owed by the FM company, the client knows how much they have to pay the FM company. Obviously the amount being paid to the FM company is going to be higher than what the FM company is going to pay you, so ask the client to just pay the FM company the difference between the two.
They get to keep the work done, you get what you are owed and the FM company get the % they would have had anyway.

Far too sensible, it’ll never work.

[smalleyboy1]

Just a thought but is this possible?
You know how much you are owed by the FM company, the client knows how much they have to pay the FM company. Obviously the amount being paid to the FM company is going to be higher than what the FM company is going to pay you, so ask the client to just pay the FM company the difference between the two.
They get to keep the work done, you get what you are owed and the FM company get the % they would have had anyway.

If FM company continues to trade, client is likely to be in breach of contract. Depending upon the size of the project, most clients prefer not to get involved with subbies. However if it is a relatively small project without proper contracts in place, it is an option.

Would be good if client supports you but ultimately, they want their project finished and probably don’t want to get involved.

[waiteu2]

If FM company continues to trade, client is likely to be in breach of contract. Depending upon the size of the project, most clients prefer not to get involved with subbies. However if it is a relatively small project without proper contracts in place, it is an option.

Would be good if client supports you but ultimately, they want their project finished and probably don’t want to get involved.

Agree with the far too sensible comment but yes will probably not happen.
Definately an option though as at this time i do have a good relationship with the client although i am aware that could change pretty quickly tomorrow.

We'll see though i do get the feeling ill be offered something at a later date as a stalling tactic until the company becomes insolvent.
Goint to be a busy monday morning i think!