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Tight spot ATM!

T

tedkj

[H]ard|DCer of the Month - July 2008
Joined
Jun 25, 2008
Messages
138
Hi people,

I just wanted to share with you what's been going on with me for the last few days as I havn't been as active and dedicated as I would like.

When I got home from my vacation, I was faced with the fact that one of my biggest customers (I run my own IT-consulting firm) had gone bankrupt. It was a large customer, and they had worked up a substantial bill as I had been working almost 100% dedicated for them since January.

The last bill they covered was the one I sent on the 15th of Jan. and they have been slow with payment before simply because it's such a large company and things take forever. It never dawned on me (too focused on summer and vacation) that they were in financial trouble, and the person I worked for at the company was just as suprised as me when the hammer hit.

Combined amount of the unpaid bills is close to $57.000, this is including some recent laptop and desktop purchases which I won't get covered either. I've had a chat with the bankrupcy broker today and I'm one of the people with the smallest claim, and the company is pretty much dry when it comes to liquid assets. Also most of their property is already 'lent' (don't know the proper english word) to them by financial partners...

All in all, I'm in a pretty bad financial situation now, but I have atleast some hope that I will get atleast some of the money even though it seems like a slim chance at the moment. I'm not broke tho, and I'm in control of things, I just have to survive on the very bare minimum for some time. Just giving you a heads up on why I've been so preoccupied lately. I've promised myself to try and not give it too much thought now and continue with my normal life as there is little for me to do now but to wait it out and see..

Heres to hope (and hard lessons learned). ;)
 
Hope things get better soon!

 
Can you repo the laptops and other items, then sell them to make up some of the loss?

 
Kendrak said:
Can you repo the laptops and other items, then sell them to make up some of the loss?

Click to expand...

Good question, since they didn't pay for it, it's technically your property (most bills for hardware sales mention full ownership till it's fully paid).

Anyway, I wish you good luck and I hope things get better later. As you said, a good lesson is to never rely on a single big customer to float yourself and get as many as you can handle to spread the risk.

 
Kendrak said:
Can you repo the laptops and other items, then sell them to make up some of the loss?

Click to expand...

Initially I thought I could, but by law it is the bankrupcy estates property now. However, according to my lawyer, I can file a complaint because I was not notified about the financial situation even though the exces and members of board knew of it going down the hill for some time (before the purchases were made).

I'm trying to get a deal going with the estate. If I pay a symbolic sum to the estate for the merchandise as this would help alot since I have customers who could potentially use this gear provided I give them a nice deal.

However, this practice is covered in it's own section under law and is illegal since all property should be sold to the highest bidder and split amongst all creditors. Will see how it works out, but I'm told I have a good case to get atleast the equipment cost settled since it was purchased after the company knew it had no assets to cover the bill.
 
tedkj said:
Initially I thought I could, but by law it is the bankrupcy estates property now. However, according to my lawyer, I can file a complaint because I was not notified about the financial situation even though the exces and members of board knew of it going down the hill for some time (before the purchases were made).

I'm trying to get a deal going with the estate. If I pay a symbolic sum to the estate for the merchandise as this would help alot since I have customers who could potentially use this gear provided I give them a nice deal.

However, this practice is covered in it's own section under law and is illegal since all property should be sold to the highest bidder and split amongst all creditors. Will see how it works out, but I'm told I have a good case to get atleast the equipment cost settled since it was purchased after the company knew it had no assets to cover the bill.
Click to expand...

Ouch, that explain it... Hope you win since nobody sane would sell or make a deal if they knew about the financial situation.

 
Sunin,

Did you refund the money for the previous GiveOut? Even tho I highly appreciate the gesture, I cannot and will not accept the refund.

I am in a not-so-good place right now, but I will manage without much trouble. I will have to focus on living efficiently and I've promised myself this will not put me off balance - and it won't!

Infact, I will do another GiveOut to spit in the ugly face of fortune today once I get some suggestions on good deals for the Horde! ;)
 
Hey Tedkj ---

sorry to hear of your misfortune.

Did you get the hard dc'er of the month questions? Just checking. No hurry on my part.

I hope things turn out better for you. 57,000 is a big chunk of money.



 
I know you're not in the US so I don't have a clue how much my knowledge applies to you. However, even though you may be one of the smaller "creditors" you should have a bit more clout when it comes to physical property which they did not pay off that you still have rights to. Technically, since they don't own the property you should still have claim to it. Otherwise, the bankruptcy is selling off property which they do not have ownership of. As far as the labor or service charges go, you'll probably be SOL on that.

I know you've already spoken with the bankruptcy lawyer, but I have a feeling they aren't telling you the full story or anything like that. It's in their best interest to be able to keep as much equipment and whatnot to be sold to be put towards paying off creditors due to the bankruptcy. Remember, the lawyer you are dealing with is basically working for the company which went bankrupt. The more equipment and assets they can sell, the better deal they can make through bankruptcy.

There are a couple other things you may want to look into. Part of it has to do with ownership of the equipment, I believe. There is a difference between the debt being secured and unsecured. I don't understand a damn bit of that but at my former job I had a little bit of dealing with it on the fringe so to speak. Another thing which may make a difference is how long the debt has been owed to you. Even though you may be one of the smaller creditors, if your claim is older than others, it should give you a better chance at getting some of your money.

Per US laws for bankruptcy, the company (or bankruptcy lawyer) must notify each and every creditor in regards to the bankruptcy so each creditor can file claims on what the company owes.

Basically, about the only way you're going to get money out of this company through the bankruptcy is to get a lawyer to take care of filing and handling the claims. If your bankruptcy laws are anything like those in the US, you would get buried in a pile of paperwork and whatnot very quickly. Also, if the bankruptcy dealings are anything like those in the US, it could be years before you see any type of money out of them. That's the main reason why I think you should have a lawyer do some digging about getting at least the hardware back that you still have a lien on since you might be able to get that much sooner.

 
SmokeRngs said:
I know you're not in the US so I don't have a clue how much my knowledge applies to you. However, even though you may be one of the smaller "creditors" you should have a bit more clout when it comes to physical property which they did not pay off that you still have rights to. Technically, since they don't own the property you should still have claim to it. Otherwise, the bankruptcy is selling off property which they do not have ownership of. As far as the labor or service charges go, you'll probably be SOL on that.

I know you've already spoken with the bankruptcy lawyer, but I have a feeling they aren't telling you the full story or anything like that. It's in their best interest to be able to keep as much equipment and whatnot to be sold to be put towards paying off creditors due to the bankruptcy. Remember, the lawyer you are dealing with is basically working for the company which went bankrupt. The more equipment and assets they can sell, the better deal they can make through bankruptcy.

There are a couple other things you may want to look into. Part of it has to do with ownership of the equipment, I believe. There is a difference between the debt being secured and unsecured. I don't understand a damn bit of that but at my former job I had a little bit of dealing with it on the fringe so to speak. Another thing which may make a difference is how long the debt has been owed to you. Even though you may be one of the smaller creditors, if your claim is older than others, it should give you a better chance at getting some of your money.

Per US laws for bankruptcy, the company (or bankruptcy lawyer) must notify each and every creditor in regards to the bankruptcy so each creditor can file claims on what the company owes.

Basically, about the only way you're going to get money out of this company through the bankruptcy is to get a lawyer to take care of filing and handling the claims. If your bankruptcy laws are anything like those in the US, you would get buried in a pile of paperwork and whatnot very quickly. Also, if the bankruptcy dealings are anything like those in the US, it could be years before you see any type of money out of them. That's the main reason why I think you should have a lawyer do some digging about getting at least the hardware back that you still have a lien on since you might be able to get that much sooner.

Click to expand...

I agree with this exactly and that's what I'm trying to say with the invoice terms. Most invoices tell that you own the parts you sold until it's fully paid so you should be able to claim, at least on the equipment on the unpaid invoices. If it's fully paid, it's the property of the bankruptcy estate.

Maybe ask a different lawyer (no ties with the bankruptcy people) and check this.

 
Man, in all seriousness I hope everything works out for you Tedkj. I just wish it wasn't people like you that go out of their way to help humanity (folding, "give out's", etc) that always seem to get the "royal shaft" :( I wish more of us had the abilities you have for helping humanity. Thanks for everything you've done and will do :D Please just remember the old saw "life ain't fair" (or something like that) :(

Please "keep a stiff upper lip and a loaded shotgun or in the present, a loaded Mac 10" (only kiddin' :p)

FOLD ON!

 
I agree with Smokrings and Xilikon.

You should get yourself an attorney with bankruptcy experience immediately. Don't listen to the opposing side... you need good counsel that is looking out for your interests.
 
SmokeRngs said:
I know you're not in the US so I don't have a clue how much my knowledge applies to you....

Click to expand...

Big thanks for taking the time, Smoke! I've gotten a lawyer to look through all this, but he only started yesterday, and we only discussed the basic stuff. He will look through all the papers and work on it this week and we'll have a meeting again on thursday.

Xilikon said:
I agree with this exactly and that's what I'm trying to say with the invoice terms. Most invoices tell that you own the parts you sold until it's fully paid so you should be able to claim, at least on the equipment on the unpaid invoices. If it's fully paid, it's the property of the bankruptcy estate.

Maybe ask a different lawyer (no ties with the bankruptcy people) and check this.

Click to expand...

Thanks for the tip! I did check the copies of the invoices, and infact the company that sends out my invoices have specifically stated that all items are considered unsold, until paid in full. I don't know if this can be backed by any law in Norway, or if it's just put on the invoice to make it seem 'official', but I'll be sure to ask about this tomorrow early!
 
tedkj said:
Big thanks for taking the time, Smoke! I've gotten a lawyer to look through all this, but he only started yesterday, and we only discussed the basic stuff. He will look through all the papers and work on it this week and we'll have a meeting again on thursday.



Thanks for the tip! I did check the copies of the invoices, and infact the company that sends out my invoices have specifically stated that all items are considered unsold, until paid in full. I don't know if this can be backed by any law in Norway, or if it's just put on the invoice to make it seem 'official', but I'll be sure to ask about this tomorrow early!
Click to expand...

Despite my slow typing skills, it didn't actually take much time. If I wasn't getting old and my memory going south I probably could have remembered more and explained it better.

I think the invoices will be a big thing. As I said, if they haven't paid for the equipment, then it should be yours by default since ownership has not transferred to the other company until it was paid for. And, I don't think the bankruptcy can claim anything that is not actually owned by the company in bankruptcy. At least here in the US, selling something which does not belong to you isn't exactly legal.

 
With my very limited knowledge of bankruptcy I was aware that the bankruptcy lawyers would determine exactly what was owned by the company in question and what was not due to unpaid invoices etc. as in your case. It was my understanding that this would reduce the value of the estate but thereby reduce the value of claims. In your case it sounds like they are doing the opposite, anything on the premises will be sold as the bankrupt companies property.

 
I cant offer much advice, other than to say, good luck and I hope things work out for the better..

 
Some good news, some bad!

My lawyer called me up 1 hour ago and informed me that he had been in a meeting with the bankrupcy estate, and they have agreed to cover the bill for the equipment I sold including interest since they had unlawfully included the equipment in the estate. The equipment is already included in an estate-auction they have going amongst the other larger creditors.

That means about $15k is covered for now. However, the debt in the company is big so when the estate is closed, my laywer said I can't expect to get much of the $40k, but I do have the option to sue them based on the fact that the board knew about the dire financial situation since February, and infact informed some of their partners about it, but not some of the smaller partners including me.

From what I understand they did this because they sought help from their partners, and were drafting a deal which would keep the company afloat for a few more months, but the partner pulled out of it after it had gone over their books etc.

Either way, this will help me a great deal and if I end up getting around $20k, I will be alright with it all. :)

Thanks for your support!
 
Getting 20K$ out of 57k$ from a bankrupt company is a good deal indeed since most deals I saw around (I often work to fix computers in the bankruptcy officiers) is often less than 10% of the outstanding debt. I hope your lawsuit uncover more money but to be honest, don't expect too much unless you sue the owners and the board of director personnally.

 
I'm glad to hear you will get some of what is owed you.

I'd sue to try and recover some of the other monies. You where trying to help them out and be a good business partner/supplier and they screwed you, on purpose. It be something different if they where too stupid to know they where in trouble.

 
Damn that sucks. Sorry to hear about that!

Most bankruptcies pay about .25-.50 on the $1.00 so if you get 15k out of 57k, you're right in there near the bottom. :/
 
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