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Hi legal folk!
I'm in a pickle and wondered if you can help with some advice. I will try and bullet point as far as possible as this is a long and convoluted tale.
I, personally, am owed £1000 plus VAT from I job I was contracted to do in Jan 2020 - for which they have already been paid by the original event organiser. Payment to me was delayed and delayed and then they closed up shop just before lockdown. They haven't responded to any of my emails or letters before action. They let all their staff go owing them a months pay each.
I have subsequently banded together with 40 other performers and artists in the same boat. Many of these are owed up to £10k.
Several acts have now successfully won CCJ's against the company, but have received nothing.
To date nobody has received a penny and very few people have been able to have communication with the directors.
However today we have all been contacted with an offer which, on past record, very few of us trust.
They have also set up another company with the same (ish) name which they've registered at Companies House.
We are wondering what our options are and what we might be letting ourselves in for should we agree to it.
I hope that some of you folks might have some sound advice for us all.
I've pasted it below
"I am writing to you to discuss your outstanding monies that you are owed.
Firstly let me apologise that we are even in this position. As you know prior to this crisis we were in talks and had plans to get you cleared and uptodate.
However, due to alot of our business being international, our business was affected from as early as December. We had a few big jobs in Asia which formed part of our plan and cashflow which impacted the business tremendously when they started cancelling. We last 30% of our yearly revenue within 3 months.
Just like you, we are in a terrible position as our sector has been wiped out.
For complete transparency, I think it best to explain the full picture as it stands and leave it with you to come back to me.
At the start of the pandemic we had to seek insolvency advice as we were unable, like everyone, to pay our staff and performers.
Our accountants and insolvency lawyers both said we should wait to see what government help we could get first. So we did exactly that. But in the meantime, some performers applied to the courts to issue CCJs against us for the money owed. Although this is totally understandable, it then put us in a terrible position, because the banks will not issue the CBILS or bounceback loans with the CCJs on the file. So it put us back to square one.
Following further conversations with the insolvency team and our accountants, we have very little options here, and if we aren't cooperated with, and creditors don't work with us, then insolvency will be the ONLY course of action and we will have to liquidate the company, where no one gets any money sadly.
The company director and shareholder have managed to get some very limited funds together to try make a dent in this and come out the other end. They obviously will only inject these funds into the business if they can agree with the creditors. If they cant come to an agreement with the creditors it will mean that they cannot pay their debts and therefore be trading insolvently, and this is illegal and we will not put ourselves in this position.
The proposal we have is based on the total funds we have and trying to make it spread across all creditors, prorata to their invoice value.
Please could you come back to me with the total you are owed, so that I can compare it to what we have on file.
We then, in order for this to work, need to request that you deduct 25% of your outstanding invoice.
We then require the remainder 75% of the invoice to spread over 5 months, with an initial payment to you of 50% of your invoice upfront, so the remainder 50% will be paid over the 5 months.
Example : if you are owed £1000
1. You will need to reduce your invoice my 25% and your new invoice will read £750.
2. We then pay 50% of your new invoice value : £750 x 50% = £375. This is paid immediately upon you accepting the new terms.
3. The remainder £375 is paid over 5 months on the 15th of every month.
In order for this to work, and fit the funds we are injecting, we need everyone to agree.
This is no fun for us, and we can only imagine the position you are in yourselves, and this is why we have fought to get to this point and not liquidated the company. We want everyone to be looked after, from our staff to the companies and performers.
Had we not had the CCJs added to the account, this conversation would be different as we'd be getting government help. We couldn't even get any grants or other assistance due to us falling outside the grant criteria.
Please can you come back to me asap, along with your revised invoice, so that we can start getting you money in a time which we can only imagine is terrible.
To reiterate, if we can't come to an arrangement with you as per the above, then it would mean the business is trading insolvently and we must do what is right, legally, and put the company into liquidation. We cannot risk putting in the little funds we have into a business when we stand no chance of recovering it. So we need everyone to agree and hopefully we come out the other end in a position where we can help rebuild this business, keep everyone in work and help rebuild the industry.
Please note this is a time sensitive matter so we must ask that you come back to us within 7 days. "
I'm in a pickle and wondered if you can help with some advice. I will try and bullet point as far as possible as this is a long and convoluted tale.
I, personally, am owed £1000 plus VAT from I job I was contracted to do in Jan 2020 - for which they have already been paid by the original event organiser. Payment to me was delayed and delayed and then they closed up shop just before lockdown. They haven't responded to any of my emails or letters before action. They let all their staff go owing them a months pay each.
I have subsequently banded together with 40 other performers and artists in the same boat. Many of these are owed up to £10k.
Several acts have now successfully won CCJ's against the company, but have received nothing.
To date nobody has received a penny and very few people have been able to have communication with the directors.
However today we have all been contacted with an offer which, on past record, very few of us trust.
They have also set up another company with the same (ish) name which they've registered at Companies House.
We are wondering what our options are and what we might be letting ourselves in for should we agree to it.
I hope that some of you folks might have some sound advice for us all.
I've pasted it below
"I am writing to you to discuss your outstanding monies that you are owed.
Firstly let me apologise that we are even in this position. As you know prior to this crisis we were in talks and had plans to get you cleared and uptodate.
However, due to alot of our business being international, our business was affected from as early as December. We had a few big jobs in Asia which formed part of our plan and cashflow which impacted the business tremendously when they started cancelling. We last 30% of our yearly revenue within 3 months.
Just like you, we are in a terrible position as our sector has been wiped out.
For complete transparency, I think it best to explain the full picture as it stands and leave it with you to come back to me.
At the start of the pandemic we had to seek insolvency advice as we were unable, like everyone, to pay our staff and performers.
Our accountants and insolvency lawyers both said we should wait to see what government help we could get first. So we did exactly that. But in the meantime, some performers applied to the courts to issue CCJs against us for the money owed. Although this is totally understandable, it then put us in a terrible position, because the banks will not issue the CBILS or bounceback loans with the CCJs on the file. So it put us back to square one.
Following further conversations with the insolvency team and our accountants, we have very little options here, and if we aren't cooperated with, and creditors don't work with us, then insolvency will be the ONLY course of action and we will have to liquidate the company, where no one gets any money sadly.
The company director and shareholder have managed to get some very limited funds together to try make a dent in this and come out the other end. They obviously will only inject these funds into the business if they can agree with the creditors. If they cant come to an agreement with the creditors it will mean that they cannot pay their debts and therefore be trading insolvently, and this is illegal and we will not put ourselves in this position.
The proposal we have is based on the total funds we have and trying to make it spread across all creditors, prorata to their invoice value.
Please could you come back to me with the total you are owed, so that I can compare it to what we have on file.
We then, in order for this to work, need to request that you deduct 25% of your outstanding invoice.
We then require the remainder 75% of the invoice to spread over 5 months, with an initial payment to you of 50% of your invoice upfront, so the remainder 50% will be paid over the 5 months.
Example : if you are owed £1000
1. You will need to reduce your invoice my 25% and your new invoice will read £750.
2. We then pay 50% of your new invoice value : £750 x 50% = £375. This is paid immediately upon you accepting the new terms.
3. The remainder £375 is paid over 5 months on the 15th of every month.
In order for this to work, and fit the funds we are injecting, we need everyone to agree.
This is no fun for us, and we can only imagine the position you are in yourselves, and this is why we have fought to get to this point and not liquidated the company. We want everyone to be looked after, from our staff to the companies and performers.
Had we not had the CCJs added to the account, this conversation would be different as we'd be getting government help. We couldn't even get any grants or other assistance due to us falling outside the grant criteria.
Please can you come back to me asap, along with your revised invoice, so that we can start getting you money in a time which we can only imagine is terrible.
To reiterate, if we can't come to an arrangement with you as per the above, then it would mean the business is trading insolvently and we must do what is right, legally, and put the company into liquidation. We cannot risk putting in the little funds we have into a business when we stand no chance of recovering it. So we need everyone to agree and hopefully we come out the other end in a position where we can help rebuild this business, keep everyone in work and help rebuild the industry.
Please note this is a time sensitive matter so we must ask that you come back to us within 7 days. "
