Case Study: It’s All In The Timing
“Better three hours too soon than a minute too late.” – William Shakespeare.
We were instructed by Universal Leasing, a leading finance company, to recover sums due under a commercial finance agreement.
Our client entered into a hire agreement with a business which was backed by a director’s personal guarantee. The business defaulted on the terms of the hire agreement and it was subsequently terminated. We were instructed to pursue the guarantor for the sums that were due at termination.
A statutory demand was served however the guarantor refused to engage with our client and pay the sums owing under the finance agreement.
Following investigations, we learnt that the guarantor had recently fled the country and it also transpired that the guarantor was attempting to dispose of assets. An expedited bankruptcy petition was presented at the court pursuant to s270 Insolvency Act 1986.
We had sufficient evidence to present to the court that the guarantor was indeed disposing of assets and a petition should be presented on an urgent basis and before expiry of the 21 day period that the court usually expects to see conclude prior to any petition.
Upon receiving notification from the court that the petition had been presented, we contacted the conveyancing solicitor and were able to halt the sale of a property within hours of completion.
We discovered that exchange of contracts had already taken place sometime earlier and before presentation of the petition. As exchange had already taken place the parties to the sale were committed to the transaction and neither party was in a position to withdraw from the matter as it would have amounted to a breach of contract with serious financial implications.
Conveyancing solicitors are expected to carry out searches before exchange of contract to ensure that no pending petitions are revealed. This would give any buyer the opportunity to withdraw from a sale at that stage. The risks are great for any buyer that proceeds with a sale where there is a pending petition as the Trustee in Bankruptcy could look to reverse the transaction as void in the absence of any application to validate the sale.
An agreement was subsequently reached with the guarantor and an undertaking was given by the solicitors instructed to deal with the sale. Steps were taken to dismiss the petition to allow the sale to proceed and our client was paid in full from the proceeds of sale.
Liam Booth, Collections & Recoveries Supervisor at Universal, commented
“Greenhalgh Kerr achieved a fantastic result for our business and we are grateful for their guidance and tenacity in navigating the complexities of the case.
Joanna’s expertise and proactive approach ultimately resulted in a full recovery and we couldn’t be any more happier with the result.
We would highly recommend Joanna and the team at Greenhalgh Kerr to anyone seeking a professional and competent skilled team of lawyers.”
Take away points
Timing was key in this case and as a result of our fast actions we were able to secure payment in full for our client.
It is always extremely important in cases such as this to act promptly as delay ultimately diminishes the possibility of a recovery. The longer you wait the less likely you are to be paid!
Taking legal advice at an early stage can maximize your chances of recovery.
If you require our assistance with the recovery of your debt please contact our team of experts for assistance.
0333 200 5220