Company has gone bankrupt - any way to claim back money?

yinhong

Hi,

I am writing on behalf of a small charity that I work at. The charity ordered an item worth £935 about 6 weeks ago but after 4 weeks it still hadn't been delivered. We contacted the company to ask for an update, and the next thing that's happened is they've sent a letter that says the following:

"Dear Sirs, I am writing to inform you that xxxxxxxxxx is technically insolvent and hence has ceased trading as of the 13th September 2013.

The company has insufficient funds or assets to formally go in to liquidation and hence invited creditors to issue winding up proceedings should you wish to do so.

If it is not subject to any formal winding up proceedings; the intention is to apply for Strike Off under s652 of the Companies Act after a period of three months from the above date."

I would be grateful if someone help us by explaining exactly what the letter means, and crucially if there's any way the charity can reclaim the money spent which was raised through hard earned fundraising?

InsideInsurance

How was the money paid? Cheque? Credit/ Debit card? BACS?

The letter just says they've gone bust but arent bothering to voluntarily go into liquidation meaning that one or more of their creditors will have to force them into liquidation otherwise they will simply close the company.

Slowhand

yinghong, there is a small business and charities board that may a better place to seek help.

ThumbRemote

If the charity has their own card, or someone at the charity purchased the item on their personal card, they need to talk to the card issuer and may be able to get the money back.

If it was paid using bank transfer or cheque you've almost certainly lost the money.

yinhong

InsideInsurance wrote: »

How was the money paid? Cheque? Credit/ Debit card? BACS?

It was paid by bank transfer, unfortunately.

Sorry, I will repost this in the correct forum.

greyteam1959

Did the 935 GBP include VAT ??
If so you can get this back on your VAT Return I believe.

ThumbRemote

yinhong wrote: »

It was paid by bank transfer, unfortunately.

I suspect your money has gone then

paddyrg

I'm guessing it's a limited company - it's quite possible the director was running it knowing it was insolvent right up until the letter they sent. There may be legal repercussions for them if they traded illegally, may be worth suggesting they make you an offer to get you off their back?

Basically any cash you can get back soonest is worth it - various other creditors will catch up in time, so get your bagsies in now, play hardball fast.

yinhong

mervyn11 wrote: »

Did the 935 GBP include VAT ??
If so you can get this back on your VAT Return I believe.

Hi Mervyn11, thanks for your reply but there was no VAT in this instance because it was for medical equipment which is VAT-exempt for charities.

paddyrg wrote:

I'm guessing it's a limited company - it's quite possible the director was running it knowing it was insolvent right up until the letter they sent. There may be legal repercussions for them if they traded illegally, may be worth suggesting they make you an offer to get you off their back?

Basically any cash you can get back soonest is worth it - various other creditors will catch up in time, so get your bagsies in now, play hardball fast.

Thanks paddyrg. We have never had to deal with anything like this before, any advice on what to write? Are there any templates you know of that we could use?

Hintza

You want to check exactly what sort of legal entity the company was was it a company or a sole trader.

I am assuming a company but they could be trying to throw you off the scent.

yinhong

It was a limited company. Their company no is NI065493 and the company name is Medina Butor Ltd.

I presume it's fine to name them at this point? At the very least to save others from making the same mistake.

p.s. I have started a new thread here: https://forums.moneysavingexpert.com/discussion/4770621