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I'm doing this on behalf of a friend.
He is an agent for a well known fashion designer company and sells exclusively in the UK on their behalf under a properly appointed Agency Agreement.
Without any word of warning, the company was put into voluntary liquidation which means that the commissions due to him for both the spring and the autumn collections won't be paid.
The affairs are now in the hands of the liquidator who says that they MIGHT get some payment when everything is finalised but only for the current season (spring) as the autumn collection won't be handled by that company.
The company has been purchased by another person now who is not liable for the commissions of the original company despite him taking the order book for delivery as originally presumed.
So it looks that the work of the agent for two seasons will go unrewarded and the amount of commission lost will be a six figure sum. This is a massive loss to him and will create a problem, as can be expected. No new agency agreement has been made by the new company owner to date and might not be made either since the sister of the new owner is herself a fashion agent..
We are one of the customers of the original company and the agent, our friend, was the one who took the orders for the two seasons.
Since we were on a payment plan for the amount of the order we are still paying the company direct. I don't know how this works as the cheques were made out to the now liquidated company and as it's been closed I can't get my head round the fact that the bank account for therm is still open to receive payments.
I would prefer to make my payment to the agent instead and want to know how this would be accommodated within the law.
As I understand it, any payment made to a creditor of a company instead of the company directly, can be used to reduce our own debt as a consequence. The payment would naturally be recorded and would be seen to reduce the creditor's debt to the agent.
Am I correct in this assumption? I'm sure I've seen some early topic on one of the forums giving the impression that his would be OK.
I think the easiest way to ask this question is, can we as a debtor to a company make payments to a creditor of the company to absolve our responsibility and consequentially reduce the debt to the agent by the company?
He is an agent for a well known fashion designer company and sells exclusively in the UK on their behalf under a properly appointed Agency Agreement.
Without any word of warning, the company was put into voluntary liquidation which means that the commissions due to him for both the spring and the autumn collections won't be paid.
The affairs are now in the hands of the liquidator who says that they MIGHT get some payment when everything is finalised but only for the current season (spring) as the autumn collection won't be handled by that company.
The company has been purchased by another person now who is not liable for the commissions of the original company despite him taking the order book for delivery as originally presumed.
So it looks that the work of the agent for two seasons will go unrewarded and the amount of commission lost will be a six figure sum. This is a massive loss to him and will create a problem, as can be expected. No new agency agreement has been made by the new company owner to date and might not be made either since the sister of the new owner is herself a fashion agent..
We are one of the customers of the original company and the agent, our friend, was the one who took the orders for the two seasons.
Since we were on a payment plan for the amount of the order we are still paying the company direct. I don't know how this works as the cheques were made out to the now liquidated company and as it's been closed I can't get my head round the fact that the bank account for therm is still open to receive payments.
I would prefer to make my payment to the agent instead and want to know how this would be accommodated within the law.
As I understand it, any payment made to a creditor of a company instead of the company directly, can be used to reduce our own debt as a consequence. The payment would naturally be recorded and would be seen to reduce the creditor's debt to the agent.
Am I correct in this assumption? I'm sure I've seen some early topic on one of the forums giving the impression that his would be OK.
I think the easiest way to ask this question is, can we as a debtor to a company make payments to a creditor of the company to absolve our responsibility and consequentially reduce the debt to the agent by the company?
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