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Share Purchase Agreement
Buyer refusing to pay balance due to an 'overstated' balance sheet on completion.
Buyer has provided no evidence other than part of a letter which indicates that his accountants 'think' there was an error of £x at completion.
Buyer wants a reduction of the error plus 4 x the amount for 'finding it'.
Seller's solicitor initially wanted to go down debt collection route i.e. winding up. However, as the buyer had indicated that there was a potential 'claim' they felt it would be thrown out of the insolvency court if it was defended. Instead, they issued a Letter before Claim. This highlighted a number of issues that the Buyer has failed to do - inform seller as soon as a discrepancy arrived, failure to pay on dates but the key defence is that the buyer is time-barred from set off. They can submit a legitimate claim but cannot offset. With the money paid, the onus is then on the Buyer to spend money to recover.
Buyer has failed to respond to the Letter before Claim.
Buyer has failed to respond to a follow up asking whether solicitors are instructed for service of proceedings.
Buyer has failed to respond to any offer from Seller to sit down and discuss position.
Solicitor is now suggesting that only course of action is County Court Multi-Track, a process that could take 1-2 years, will cost Seller a significant sum up front.
Buyer is solvent and clearly using process to either delay payment, putting head in the sand or (more likely) to force the Seller's hand into spending money and bank on this never actually getting to court and settling on a reduced amount.
Buyer is busy and does not handle pressure well. Are other options available other than County Court?
Thoughts?
Buyer refusing to pay balance due to an 'overstated' balance sheet on completion.
Buyer has provided no evidence other than part of a letter which indicates that his accountants 'think' there was an error of £x at completion.
Buyer wants a reduction of the error plus 4 x the amount for 'finding it'.
Seller's solicitor initially wanted to go down debt collection route i.e. winding up. However, as the buyer had indicated that there was a potential 'claim' they felt it would be thrown out of the insolvency court if it was defended. Instead, they issued a Letter before Claim. This highlighted a number of issues that the Buyer has failed to do - inform seller as soon as a discrepancy arrived, failure to pay on dates but the key defence is that the buyer is time-barred from set off. They can submit a legitimate claim but cannot offset. With the money paid, the onus is then on the Buyer to spend money to recover.
Buyer has failed to respond to the Letter before Claim.
Buyer has failed to respond to a follow up asking whether solicitors are instructed for service of proceedings.
Buyer has failed to respond to any offer from Seller to sit down and discuss position.
Solicitor is now suggesting that only course of action is County Court Multi-Track, a process that could take 1-2 years, will cost Seller a significant sum up front.
Buyer is solvent and clearly using process to either delay payment, putting head in the sand or (more likely) to force the Seller's hand into spending money and bank on this never actually getting to court and settling on a reduced amount.
Buyer is busy and does not handle pressure well. Are other options available other than County Court?
Thoughts?
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