Insolvency Redundancy Limbo

kernowdragon

The company I worked for, for 10 ten years closed with just a weeks notice in the early autumn last year, the stated reason being insolvency. I received pay for just that weeks notice and was informed by the managing (and sole) director that I'd have to take the company to Employment Tribunal to be awarded whatever else I was owed, I never recieved a P45, letter of redundancy or any other communication from the company from that point; which caused weeks of delays in processing my benefits claims.

Over the following months I was successful in my ET claim, receiving a default judgement for everything I was due and unexpectedly some additional compensation I had not been aware I was entitled to. The company provided no defence, no information, indeed made no response to the ET at all!

Even with the judgement against it I still received no communication from the company, and resorted to using the ET FastTrack Recovery Service, provided by the Sheriff's Office, in order to attempt to recover what was owed to me. This resulted in gaining a Recovery Order.

Various mistakes, none of them on my part, e.g. errors in the ET's wording of the judgement led to the MD trying to counter claim against me for mental distress when a recovery agent turned up at his home address, following an unsuccessful attempt to serve the recovery order at the company's registered address, which was purely a holding address c/o the accountant. After a number of very heavily worded letters from his solicitor, and hugely fictitious statement from the MD, I resorted to paying for legal advice and work that I could ill afford to defend a case that was ultimately thrown out, and still there was no resolution to the monies owed. A further attempt to have the ET's default judgement overturned was also dismissed.

Although I recieved a small payout from the Insolvency service I was blocked from claiming the majority of the remainder as the MD has totally failed to actually make the company legally insolvent, meerly claimed that it is broke. I've already had to make representations to Companies House to stop them dissolving the company for failing to submit accounts, as it would be off the hook if it ceased to exist!

So 14 months since I was originally made redundant, I'm still out of work, received almost none of the compensation due, been unable to enforce the recovery as the company has no assets to seize (although I've seen no balance sheet or inventory to confirm this), (but the MD just happens to have several marina properties, motor yacht, porsche, and motor home), and just as sole director he enjoyed the benefits of not having anyone else to answer to, it seems there is still no accountability and he can duck responsibility for the mess he left behind him. The Recovery Order remains in force but basically unenforcable, and the safety net system of the Insolvency Service useless because the company hasn't been declared insolvent!

toddle2u

Serve the company with a Statutory Demand for payment and follow it up with a Winding Up petition. If it does get wound up you can then claim from the Redundancy Payments Office as the company will be in a formal insolvency procedure. Will cost you about £2.5K with solciitors fees.

kernowdragon

toddle2u wrote: »

Serve the company with a Statutory Demand for payment and follow it up with a Winding Up petition. If it does get wound up you can then claim from the Redundancy Payments Office as the company will be in a formal insolvency procedure. Will cost you about £2.5K with solciitors fees.

Thanks toddle2u, the Statutory Demand is easy enough, but I was hoping there might be an alternative to the Winding Up action as I simply don't have the £2.5k to take that route, although they owe in excess of £15k!:mad:

hcb42

when this happened to me years ago, I simply registered as a creditor (3 months unpaid notice), I didnt get it all but did get some payments a year and 2 years down the line once the company was kepy alive by another investor.

If they dont have the money, I dont know how you will get it unfortunately, I wouldnt be paying any money chasing it.

Edit, did you get the statute redundancy pay under the govt scheme? I forget its name now, would need to look it up, it was 2002 when it happened to me.

The_Pedant

Hmm, do you have legal cover on your home insurance? They usually cover redundancy/employment legal issues, allowing you to see if they are able to provide any assistance. I'm not sure whether the fact that judgment has been issued (and this now being simply a civil matter) would affect their ability to help.

My concern would be they're happily running down the company, emptying any money out of it. If there's no money in the kitty then getting any money would be unlikely and unless you know otherwise I doubt it would be worth putting in any more money to chase the debt.

I take it that the company isn't actually trading? I was just wondering if they were 'trading whilst insolvent' or not. That's a bit of a leap though.

kernowdragon

Thanks everyone for your responses.

The MD says there is no money left in the company and it's not trading; HOWEVER, I've found an interesting bit of information this morning. I always knew the company was listed with companies house as a holding company, and that although the MD denied it he had other related businesses, which I suspected came within that holding company. On checking with companies house this morning I found one of the other companies and it is still trading, complete with up to date accounts etc, (which the holding company doesn't have, hence companies house attempt to strike it off).

Does anyone know if I would have a claim against the subsiduary company, being part of the whole?

Thanks for the 'trading whilst insolvent' point Pedant, I did suspect that and made report to the Business Investigation Unit at Companies House. They did say they they would investigate, but that I wouldn't hear anything further from them unless it resulted in a prosecution that made the press, citing confidentiality rules!

toddle2u

Does anyone know if I would have a claim against the subsiduary company, being part of the whole?

Does the 'Holding' company have any shareholding in the subsidary?

Trading whilst insolvent is very difficult to prove and Companies House will not investigate this. It is an action that has to be investigated by an Insolvency Practitioner or the OR once the company has entered into an insolvency procedure. The people who are saying you are throwing good money after bad chasing this are missing the point. The only way (IMHO) you will get any money is by going the winding up route as previoulsy advised and then you will at least get something back from the RPO. Without a formal insolvency you chances of getting anything are very slim

hcb42

toddle2u wrote: »

The people who are saying you are throwing good money after bad chasing this are missing the point. The only way (IMHO) you will get any money is by going the winding up route as previoulsy advised and then you will at least get something back from the RPO. Without a formal insolvency you chances of getting anything are very slim

i managed to get money back when it happened to me without paying out £2.5K...................? Mine would have been about £13K I think so similar amount.

toddle2u

i managed to get money back when it happened to me without paying out £2.5K...................?

Can you share with us then how you did this as I can't see how you can get the money from the RPO without the company formally entering some sort of insolvency. In fact I would state that it is impossible to get it from the RPO with this.