News

Covid-19: Cash flow and debt recovery

25th March 2020

Covid-19: Cash flow and debt recovery

In these difficult times cash flow can be vital. Debt recovery manager, Arshad Mohammad outlines one recent case where swift action led to a full recovery of monies owned, using our fixed fee debt recovery service.

Our client (Company A) was sub-contracted to provide installation services for a hotel. The contractor (Company B) put together the agreement and sent out the final account statement just under £1.5million.

Both parties signed the agreement and accepted the final account statement, however after paying over half the amount, Company B stopped paying.  A settlement agreement was reached but still there was no payment.

It was clear that Company B was using delaying tactics and had no real justification to withhold payment. Company B was trading but there was concern that it was in some financial difficulty.

We advised Company A that the best course of action would be insolvency proceedings as opposed to a County Court Claim, as Company B was unable to pay its debts when they fell due. We advised Company A to claim the full amount as opposed to the reduced figure as Company B had clearly breached the settlement agreement.

We sent a letter before action demanding payment in full informing Company B of the intention to proceed with a winding-up Petition pursuant to section 123 of the Insolvency Act.

As a result Company B paid Company A in full the outstanding debt of £60,000 within three days of receiving the demand at a fixed cost to Company A of £80.

Cashflow is key to businesses, particularly at the moment.  Swift action to collect debts has never been more important.

If you need advice on your debt collection processes or have exhausted your internal processes and have not been paid, and need to take action then you should not delay in seeking legal advice.  Utilising the specialist services of a firm such as ours to pursue any outstanding sums before it is too late. The earlier we are instructed, the quicker you can expect results.

We offer a 'no recovery, no fee' pricing structure, details of which can be found by clicking here: Debt Recovery Fixed Fees

If you would like to discuss any of these issues in more detail, you can contact Arshad Mohammad on 07595 657642 or arshad.mohammad@higgsandsons.co.uk

Julia Lowe on 07912 121805 or julia.lowe@higgsandsons.co.uk

If you have any other general queries or concerns that you feel we can assist with then please email supportingyou@higgsandsons.co.uk and somebody will get back to you as a matter of urgency.

 

Other news

Contact us

3 Waterfront Business Park
Brierley Hill
West Midlands, DY5 1LX

Email: law@higgsandsons.co.uk
Call Us: 0345 111 5050

Newsletter

Keep up to date with all the latest here.