IP's - payment of their fees

Battle_weary

My husbands business went into voluntary liquidation in January 2007. He signed a guarantee with the IP and their agreement with him states:
"Our fees for assisting with the winding-up of the company, preparation of the report and statement of affairs and convening of statutory meetings is £4k & VAT. The fees will be met either from asset realisations, or failing that, personally by the director. Any further work undertaken other than that originally quoted will be billed on a time cost basis calculated at our standard insolvency charge out rates & VAT. These shall be met from asset realisations only and shall not be charged to the director."

The IP's solicitor is demanding £5,606.00 and isasking my husband to sign a Tomlin order, and us both to sign a voluntary charge order on our home.

The assets realised £3,800 and we state that my husband only owes £200 + VAT being the difference between £3.8k realised and £4k due.

The IP's solicitor quotes s176ZA of the Insolvency Act 1986 and states that my husband must pay the IP's fees as he could not be paid in priority to prefferential claims.

Surely if we have a contract stating that fees will be paid from assets realised first then they cannot keep chasing us for this debt?

Help please!!!

nervousmother

I think you need to take legal advice, It would seem the IP is trying it on as he has already in effect issued a invoice for £4700.
He does have the right to add interest to this debt though.. I do suggest you see a solicitor.

debtinfo

Im not sure where your argument is. You agreed to pay the IP costs if the assets of the case did not cover them. They have not covered the costs and so you are liable for them.

nervousmother

I think what they are saying debt, is in the begining they were told the bill would be £4700, then the IP had money from assets for 3.8k and the IP is still asking for 5.6k now.

debtinfo

Yes but the moeny recovered has not gone to the IP it has gone to preferential creditors as required by the law. (believe me if the IP could have taken it they would have done). Therefore the original bill has not been paid and is still owed. Presumably the OP did not know this would happen before signing the agreement, but it is above board and legal, the preferential creditors are usually things like staff and so they get paid first

Battle_weary

Ok - so he owes the debt. But why was he made to sign that agreement if it was not valid?

None of the staff have been paid a penny - I know I was one of them - and no one else has got a penny - so where is the money?

debtinfo

i would certainly ask who got the money, the reason for the agreement is that if there were sufficient assets to pay preferential creditors and then the IP fees then you would not have had to pay anything. As i said ask for a list of exactly who has been paid what

Battle_weary

It has taken some time to get the IP to respond.

They refuse to give details of preferential creditors - apparently they do not have to and believe this is just stalling tactics irrelevent to case going to court.

My main complaint is that my husband signed an agreement with the IP and the IP spoke of the fact that all monies realised would go to him first to pay off his (IP's) debt. About 1 year later the law was changed. We were not informed of any change in the law so as far as I am concerned the original signed agreement stands as we have not been told otherwise. Am I correct in this assumption?

Battle_weary

Hello all

Not posted for some time due to family illness.

Husband went to court re IP fees - now racked up to £17k with sols costs, interest etc.

Judge didn't allow either party to speak he just asked of claimants solicitor had heard of a 'new' law called the Statute of Frauds dating back to 1667 and then threw the case out.

YIPEE!

silvercar

Battle_weary wrote: »

Hello all

Not posted for some time due to family illness.

Husband went to court re IP fees - now racked up to £17k with sols costs, interest etc.

Judge didn't allow either party to speak he just asked of claimants solicitor had heard of a 'new' law called the Statute of Frauds dating back to 1667 and then threw the case out.

YIPEE!

Odd - the statute of fraud requires contracts to be in writing and signed. So the judge must have thought something wasn't written down.

debtinfo

I agree that it sounds odd, the judge presumably said more than that and gare some detail regarding the reasons for his judgement