getting money back from builder going through insolvency (>10k)

[1bertie]

Hi
We have contracted a building company to build an extension to our house.
We have paid him 90% of the cost, and the estimated work done is 30-35%.
He has not made significant progress for 3 months.
Now he informed us his company is technically insolvent and invites us to issue winding up proceedings as it does not have assets or money in the bank to enter into liquidation.
How can we get our money back?
Thank you

[DE DOGS]

Question is there a contract ? If yes then check on his assets property etc, of course, he would love you to wind up the Company he loses no money, then formes another Ltd Company. there must be a Bank Account somewhere that you can freeze it if you can locate it a Court order will sort that out.

[atticus]

insolvency can be very simply defined as there not being enough money to go around.

[atticus]

I would ask for FULL financial disclosure.

[1bertie]

I did ask him in an email to prove that he has no assets or cash but I doubt he will reply.
How can I ask for full financial disclosure that he cannot ignore or refuse? Is there a legal way to do this?
The letter he sent us to inform us about the insolvency is just written and signed by him, without even declaring his relation to the company in this letter.
I asked him for legal proof that what he says is true, when the insolvency process started and for a legal document from an authority saying his company is insolvent.
I don't think a simple letter like his proves anything.
Am I wrong?
many thanks

[atticus]

If you ask for full financial disclosure at least you have the request on record should it be ignored.

[islandgirl]

Is it a Ltd company? I understand you can sometimes go after the directors personally...does anyone know if this is correct?

[1bertie]

It is a ltd

[atticus]

How much money are we talking about?

Do you have legal expenses insurance?

The Insolvency Act 1986 details circumstances under which a liquidator may pursue directors personally. These laws are excellent in theory, but rarely help creditors who have lost money.

There are circumstances in which a creditor may be able to take action directly against directors, but such cases are expensive and hard to prove - and carry big costs risk if unsuccessful. For example, there is s423 Insolvency Act 1986, but the OP would at the very least need to know of a valuable asset transferred out of the company for less than full value. Another example of a successful claim is in a case several years ago called Contex Drouzhba v Wiseman https://www.bailii.org/ew/cases/EWCA/Civ/2007/1201.html.

[islandgirl]

Watching some of the baliff programmes (I know...sorry) they are often collecting money from Directors of companies. If it is still in business and not liquidated that may be worth a shot. Perhaps keep it under 10k and stay in small claims to keep costs low? No idea if that is possible but it is where I would be looking at this point

[atticus]

But first identify whether there is a legal basis to bring a claim! Bailiffs tend to become involved after judgment has been given.

[islandgirl]

Yes of course. But the CCJ must have been obtained against the director and they say in the commentry that in certain circumstances directors can be held liable personally - as Atticus wisely says you have to establish what these circumstances are first

[1bertie]

We are talking about more than 10k. Under 50k. I'd rather not say exactly for privacy issues just in case, maybe over cautious.
I can attempt contacting the small court for part of it.
I don't have legal expenses insurance, and the costs for going to court are quite significant fo me, at this point in time. Probably like for many other people on this forum.

Would it make any sense involving the police?
Does a letter sent by him on the company's headed paper, where the signature does not say his role in the company, declaring the company is insolvent, have any value at all? Shouldn't such notification come from a legal authority or solicitor or something like that?
Shouldn't his case have an adminstrator that deals with this insolvency issue that I can contact?
Does it make sense for me to register as creditor of this company?

Not being a solicitor or any law-related professional I find it bewildering that the law creates such circumstances where insolvency claims leave a client/ creditor etc totally unprotected and with great losses. Plus the high costs to bring them to justice will most of the time allow such individuals to carry on happily.
I understand I can proceed to court in maximum 6 years? I was wondering when does countdown starts.
Thank you

[islandgirl]

what does companies house say about the position of the company at this point in time?

[1bertie]

it says active, with accounts overdue.
Would you happen to know how quickly is the information updated on there?