Can an "insolvent" entity take you to court?

lovelar

SORRY ...this is a long one...

Just curious.... the nursery I sent my children to had to close down in April due to lack of funds. It was a community association run nursery.

I had a dispute with them over monies I paid them that have not been registered on my account. This first occured in August 2008, when I gave cash on a Friday teatime to a staff member who couldn't find the receipt book.... I had no reason to be concerned...I'd been using them for nearly 8 years and so didn't give it a second thought. It happened on 2 other occasions in September and October... as we (all the parents) were never given invoices or statements (unless we pestered them for one) then it was often impossible to know what you owed at any given time.

However I kept a log of everything on a spreadsheet, with all weekly fees and payments that I made (I seldom had to make cash payments as childcare vouchers covered most months unless there was a school holiday in which case the fees were higher).

When I was finally given a statement in October after weeks of asking, I noticed that my balance was £480 higher than it should have been, so I immediately questioned it with the nursery manager who said "she'd look into it".... basically, she never came back to me and I kept asking and she kept saying "oh yeah I forgot I'll look into it"

Roll forward to December and still no answer and the committee secretary emailed me about my "balance" on account... I reiterated my complaint about the £480 of missing payments. I documented EVERYTHING in an email to her and she replied to say the committee would investigate.

Roll forward to February and the Committee chairman wrote me a very nasty letter about my balance. . I rang him and he was very nasty to me about it and said how very convenient I had decided to report this now and why had I not reported it before, so I pointed out I had reported it in October and reminded him about the emails to the secretary...(The secretary btw denied ever having ANY emails off me and basically LIED about it to the committee). when it had come to my attention and also that I had been correspending via email with his committee secratary.... he basically called me a liar and said he very much doubted I had sent any emails....well as I don't delete important emails I COULD prove I had documented everything to them and took great pleasure in sending him a long letter with copies of every email. Since writing that letter which he demanded I write no later than 28th Feb I have heard nothing. Then in March they announced they were closing... I asked them to give me a FINAL bill as off the nursery closure date so I could ensure a zero balance. I requested this EVERYDAY in the 3 weeks notice we had been given...I got nothing...although I got a hand scribbled note saying the treasurer was still looking into the £480. I continued making payments while the nursery was still open, but as soon as it closed and because I did not know the final balance I ceased making payments, assuming they would of course be endeavouring to collect all debts and be writing to parents.

Roll fwd 31st May and I get a letter threatening to take me to court for an o/s balance of £830...it detailed the final 5 weeks childcare as separate invoices (none of which I ever had). So I responded in writing detailing all the payments I made and stating that in my opinion I only owed £340. I asked for copies of the invoices and for them to check their bank account. I got a hand scribbled note through the door 2 days later agreeing that they HAD received all the payments I listed and that they agreed with my figure of £340 so I immediately paid it!!! I figured they had realised that their appalling book keeping (yes it was their own accountant had written to them and told them they had to buck their ideas up) had led them to realise it was probable they had mislaid the money!

So I was pretty annoyed to come home today to another letter from the chairman saying that I still owed this £480 and that I should have asked for receipts sooner (I asked nearly every day and it wasn't until they finally gave me a statement that I discovered what had happened)...and stating therefore that my "claim" wasn't good enough but that as a gesture of goodwill they would meet me 50/50!!! And that basically if I did not accept this kind offer they would take me to court for the full amount!!


Well you can imagine my initial reaction..... there is NO WAY I am paying this money again..... but it also leads to question whether they can even take me to court anyway.... they closed the nursery as they were insolvent.... they had no money... how can they take someone to court...


Incidentally I am not the only parent receiving these letters... I am still in contact with many of them and everyone of them has had letters threatening court action and some of them don't owe a single penny, but their record keeping was so poor, they have not recorded payments of theirs either!!!!


Sorry it was long winded....but it wasn't a quick tale and I really want to understand where I stand.... I am in the processing of emigrating and whilst I don't think it will have any bearing on THAT I really could be doing without this hassle!!!

mountainofdebt

I would have thought that if the person/organisation dealing with the insolvent entity could be able to chase you any outstanding amount.

Have you still got the note saying that you only owed £340 and have you proof that this amount was paid?

Floss

I take it the organisation owe people or companies money and are trying to recoup enough by scaring people into paying?

Loretta

Let them take you to court, they will have to produce proper figures if they do and I would have thought that with the records you have kept, spreadsheet etc, and the contradictory letters etc from them they would look like idiots.

I agree I think they owe money all over the place and they are trying to bully people into paying something, it sounds like money has gone 'astray' and they are trying to cover their backsides. Leave it to them and just see what they do next

MrsTinks

Personally I'd club together with the other parents and start a counter claim for harrasment - but that's just me

Mrs_P_Pincher

The liquidators/administrators will have a duty to the creditors to collect any money they can, but it sounds as though your records are in good order. I'd write a short letter repeating that you have paid the agreed balance of £340 and as far as you are concerned your account is now clear and then sit back and wait and see what happens. If they don't start anything before you emigrate then you should be in the clear. They won;t be able to afford to pursue you if you are abroad.

Good luck!

Mrs P P

peachyprice

When you say 'insolvent' do you mean they are officially in administration or have they just ceased trading due to lack of funds?

If they are in administration they are not allowed to try to collect money from any of their creditors, that is a job for the official receivers.

If they have ceased trading because they weren't making any money and have just thrown in the towel they can still chase you for outstaning debts.