Legal Advice, Suing A Director Or Worker In A Company

[cells]

Long story shortened….

Agent I rent a business space from goes bust (now trading under different name and old one is insolvent)

However a day or two before they went bust they asked me and other clients to bring forward payments. I specifically asked are you going bust or have financial difficulties to which they said no.

A few £k transferred by me and I am informed others and then they go bust a few days later.

I understand a limited companies liabilities are indeed limited and I have little chance of getting owed money back from the limited company.

However can I in this particular case go after the director and or employees who said they were in no financial trouble? AFAIK it is illegal to trade if you are insolvent and these bastards must have know due to the trick they pulled to basically scam a few 10s-100s of k from their clients.

Any advise appreciated

[Guest Noodle]

Long story shortened….

Agent I rent a business space from goes bust (now trading under different name and old one is insolvent)

However a day or two before they went bust they asked me and other clients to bring forward payments. I specifically asked are you going bust or have financial difficulties to which they said no.

A few £k transferred by me and I am informed others and then they go bust a few days later.

I understand a limited companies liabilities are indeed limited and I have little chance of getting owed money back from the limited company.

However can I in this particular case go after the director and or employees who said they were in no financial trouble? AFAIK it is illegal to trade if you are insolvent and these bastards must have know due to the trick they pulled to basically scam a few 10s-100s of k from their clients.

Any advise appreciated

Have a look at the Theft Act first, could be criminal, but last time this happened to a family member the filth didn't care fvck.

Otherwise you're way down the list, might get 5p back. Not 5p in the Pound, just 5p.

Sorry for your woes. Got hit myself last year.

[SNACR]

Need more info.

Is this rent under a lease that you've advanced to them and they were the LLs managing agent?

TBH, in terms of company director malfeasance I've seen far worse cases not stick. Any litigation is going to rely on an assumption they're solvent enough to pay your costs and has a very good chance of compounding your losses.

What did they offer that you and others felt willing to assist with this impromptu cash call?

[6538]

Long story shortened….

Agent I rent a business space from goes bust (now trading under different name and old one is insolvent)

However a day or two before they went bust they asked me and other clients to bring forward payments. I specifically asked are you going bust or have financial difficulties to which they said no.

A few £k transferred by me and I am informed others and then they go bust a few days later.

I understand a limited companies liabilities are indeed limited and I have little chance of getting owed money back from the limited company.

However can I in this particular case go after the director and or employees who said they were in no financial trouble? AFAIK it is illegal to trade if you are insolvent and these bastards must have know due to the trick they pulled to basically scam a few 10s-100s of k from their clients.

Any advise appreciated

Lanlord and Tenant is a fiduciary relationship. If you have been specifically informed that the company was not in financial difficulties and this was the reason that you paid over the money then you will probably have an argument that the money you paid was as a result of the landlords unconscionable behavior and that you were, in effect, decieved into paying it over.

Money which is misappropriated by a fiduciary is likely to be held by him (in this case the company) on your behalf in the form of a constructive trust. What this means is that you have a proprietary right to this money; in short it is actually your money and not the company's so cannot be the subject of a claim by the general creditors of the company.

Edit: Where was it paid to? Was it paid into a clients trust account? If so you're more likely to get it back.

[Gigantic Purple Slug]

Long story shortened….

Agent I rent a business space from goes bust (now trading under different name and old one is insolvent)

However a day or two before they went bust they asked me and other clients to bring forward payments. I specifically asked are you going bust or have financial difficulties to which they said no.

A few £k transferred by me and I am informed others and then they go bust a few days later.

I understand a limited companies liabilities are indeed limited and I have little chance of getting owed money back from the limited company.

However can I in this particular case go after the director and or employees who said they were in no financial trouble? AFAIK it is illegal to trade if you are insolvent and these bastards must have know due to the trick they pulled to basically scam a few 10s-100s of k from their clients.

Any advise appreciated

http://en.wikipedia.org/wiki/Wrongful_trading

http://en.wikipedia.org/wiki/Fraudulent_trading

[cells]

Need more info.

Is this rent under a lease that you've advanced to them and they were the LLs managing agent?

TBH, in terms of company director malfeasance I've seen far worse cases not stick. Any litigation is going to rely on an assumption they're solvent enough to pay your costs and has a very good chance of compounding your losses.

What did they offer that you and others felt willing to assist with this impromptu cash call?

We had only been with them for a few weeks and were paying weekly with no problem, then they said they want it monthly which rang alarm bells and I asked them via email are you having cash flow problems or are you close to going bankrupt. The head of their finance department said no they were fine via email and that they were enforcing their rent payments to be monthly and I shouldn’t worry.

Basically they conned us and baught forward payment in the knowledge that they are going bust.

I suspect the limited company will have no assets because they would have illegally withdrawn everything. I don’t think I have much of a chance going after the limited company however what chance do I have going after the director and the finance head of the company personally?

They defrauded me and others and any common sense judge should imo see it our way but as I say would suing them personally and not the company be possible.

Oddly enough I would much rather have been mugged or had the money stolen by a burglar. They hide and have shame. These bastards just changed the company name and are still trading doing the same business. Shame on them!

Were I less mentally stable I think a visit to their office with a big car to have a traffic accident would be in order.

[cells]

Lanlord and Tenant is a fiduciary relationship. If you have been specifically informed that the company was not in financial difficulties and this was the reason that you paid over the money then you will probably have an argument that the money you paid was as a result of the landlords unconscionable behavior and that you were, in effect, decieved into paying it over.

Money which is misappropriated by a fiduciary is likely to be held by him (in this case the company) on your behalf in the form of a constructive trust. What this means is that you have a proprietary right to this money; in short it is actually your money and not the company's so cannot be the subject of a claim by the general creditors of the company.

Edit: Where was it paid to? Was it paid into a clients trust account? If so you're more likely to get it back.

they act a bit like estate agents but for the business world, renting a space to us from a business that owns many spaces. a middleman if you will.

the money was paid into their general account.

i am at loss what to do and i suspect the liquidators will act for their pockets and not mine

[cells]

http://en.wikipedia.org/wiki/Wrongful_trading

http://en.wikipedia.org/wiki/Fraudulent_trading

Thanks, reading that it does indeed seem that they were fraudulently trading and trying to defraud creditors and should be personally liable however it seems it is largely upto the liquidators if they want to follow that route and I suspect they won’t.

[GBdamo]

No lawyer but, surely if this company are acting as your landlords agent and you have proof that you have paid them the money for rent, then the rent is paid. If that money doesn’t find its way to your landlord how is that you problem?

Still despicable behaviour but I can't see how you’re out of pocket.

[cells]

No lawyer but, surely if this company are acting as your landlords agent and you have proof that you have paid them the money for rent, then the rent is paid. If that money doesn’t find its way to your landlord how is that you problem?

Still despicable behaviour but I can't see how you’re out of pocket.

They didn’t pay the landlord and we had to pay the landlords directly or get evicted. Hence we paid for one month twice which meant losing about £5k. so they took the money and didn’t pay the landlord. They are now insolvent and basically bankrupt.

It must be illegal as they defrauded us of money when they new they were bankrupt.

Just trying to find the address of the directors ATM from companies house.

[sun n sea]

If this middleman has been formally engaged by the landlord to act on his or her behalf then the missing rent money is the landlords problem not yours.

If the landlord signed a legal document granting this agent the power to rent space on his behalf then you cannot be evicted.... the landlord side of the contract is in breach not the tenant side.

DO NOT PAY a penny until you have consulted a solicitor.

[GBdamo]

They didn't pay the landlord and we had to pay the landlords directly...Snip

Right there, that where you went wrong. Should have told the LL to try and evict you. You got shouted down by someone wih bigger stones. Now man up and go and torch the feckers dog.

[6538]

they act a bit like estate agents but for the business world, renting a space to us from a business that owns many spaces. a middleman if you will.

the money was paid into their general account.

i am at loss what to do and i suspect the liquidators will act for their pockets and not mine

As you say above, if the money has been withdrawn by the directors illegally you may need to go after them personally. However, it is still subject to the constructive trust - it's your money. You may be able to trace it to the directors personal accounts and recover it.

If they are merely agents then it may not matter in any event. The money you paid will be held by them on constructive tust for the landlord, not you, as they are his agents, not yours, and as far as you are concerned your rent is paid up. It's not your concern if the landlords agent does off with his money.

[6538]

They didn’t pay the landlord and we had to pay the landlords directly or get evicted. Hence we paid for one month twice which meant losing about £5k. so they took the money and didn’t pay the landlord. They are now insolvent and basically bankrupt.

It must be illegal as they defrauded us of money when they new they were bankrupt.

Just trying to find the address of the directors ATM from companies house.

This just sounds wrong. It doesn't matter whether the LL got his money or not because you paid his agent which is as good as paying him, the agent he freely appointed and who he told you to pay.

[okaycuckoo]

Look at lifting the corporate veil and fraudulent misrepresentation:

http://en.wikipedia.org/wiki/Piercing_the_corporate_veil#United_Kingdom

http://en.wikipedia.org/wiki/Misrepresentation#Types_of_misrepresentation

[SNACR]

This just sounds wrong. It doesn't matter whether the LL got his money or not because you paid his agent which is as good as paying him, the agent he freely appointed and who he told you to pay.

I can't quite follow it either. LLs managing agents going bust is a regular occurence any rent under a lease paid to them would be considered paid regardless of whether it had actually reached the LL that retained the managing agents.

I can't really follow what the OP's problem is and why they were advancing rent prior to terms agreed on the lease or if this was some sort of flexible licence, informal agreement or the premises were some sort of third party storage or serviced office type operation.

If there isn't the protection of a lease or even a letter licence I suspect the OP might be stuffed in this case.

[sleepwello'nights]

I can't quite follow it either. LLs managing agents going bust is a regular occurence any rent under a lease paid to them would be considered paid regardless of whether it had actually reached the LL that retained the managing agents.

It looks to me as if the landlord rented the property to the insolvent company. The Company sub-let to the tenants. The tenants have no contractual agreement with the landlord. The insolvent company may not have been the landlord's agents. If they were then the loss is down to the landlord. Payment to an agent is deemed to be payment to the principal.

If this were the case it would be the same situation as when a letting agent disappears with tenant's deposits. The landlord is still liable to the tenant for repayment of the deposit. This doesn't appear to be what the position is here. What does the rental agreement say?

Going to law is expensive and uncertain. Sometimes its better to look on these unfortunate events as lessons and move on. Don't forget the additional rent is tax deductible so the net loss may be rather less than the £5k. In a business context where you're paying £60k a year rent its probably not large enough to lose sleep over.

[6538]

It looks to me as if the landlord rented the property to the insolvent company. The Company sub-let to the tenants. The tenants have no contractual agreement with the landlord. The insolvent company may not have been the landlord's agents. If they were then the loss is down to the landlord. Payment to an agent is deemed to be payment to the principal.

If this were the case it would be the same situation as when a letting agent disappears with tenant's deposits. The landlord is still liable to the tenant for repayment of the deposit. This doesn't appear to be what the position is here. What does the rental agreement say?

Going to law is expensive and uncertain. Sometimes its better to look on these unfortunate events as lessons and move on. Don't forget the additional rent is tax deductible so the net loss may be rather less than the £5k. In a business context where you're paying £60k a year rent its probably not large enough to lose sleep over.

The OP clearly said they were agents though.

[cells]

It looks to me as if the landlord rented the property to the insolvent company. The Company sub-let to the tenants. The tenants have no contractual agreement with the landlord. The insolvent company may not have been the landlord's agents. If they were then the loss is down to the landlord. Payment to an agent is deemed to be payment to the principal.

If this were the case it would be the same situation as when a letting agent disappears with tenant's deposits. The landlord is still liable to the tenant for repayment of the deposit. This doesn't appear to be what the position is here. What does the rental agreement say?

Going to law is expensive and uncertain. Sometimes its better to look on these unfortunate events as lessons and move on. Don't forget the additional rent is tax deductible so the net loss may be rather less than the £5k. In a business context where you're paying £60k a year rent its probably not large enough to lose sleep over.

Indeed I am not losing sleep over the loss, it is more the way the loss happened. I can understand companies go bust however they insisted us and the rest of their tenants bring forward payments a matter of days before they went bust. That is fraud and illegal and that is the bit I don’t like.

I asked if they were insolvent or going bankrupt and they categorically said no they had no difficulties and hence I was wondering if I could sue the directors/employees for this fraud as I suspect we will get nothing from the insolvent company.

And you are correct; we rented from the insolvent company and had no agreement directly with the landlord although we do now.

[6538]

Indeed I am not losing sleep over the loss, it is more the way the loss happened. I can understand companies go bust however they insisted us and the rest of their tenants bring forward payments a matter of days before they went bust. That is fraud and illegal and that is the bit I don’t like.

I asked if they were insolvent or going bankrupt and they categorically said no they had no difficulties and hence I was wondering if I could sue the directors/employees for this fraud as I suspect we will get nothing from the insolvent company.

And you are correct; we rented from the insolvent company and had no agreement directly with the landlord although we do now.

As I say, if you were renting from the insolvent company and you paid them as a result of their unconscionable behavior then the money you paid them is quite likely the subject of a constructive trust. It's your money not the company's and if the directors have taken it then it can be traced and recovered.

[cells]

As I say, if you were renting from the insolvent company and you paid them as a result of their unconscionable behavior then the money you paid them is quite likely the subject of a constructive trust. It's your money not the company's and if the directors have taken it then it can be traced and recovered.

i am not even sure that they have indeed gone into liquidation, i checked companies house website and says they are active and their status is not shown as in liquidation. i wonder if they are trying to pull a fast one and just say to everyone sorry we have gone into liquidation when in fact they haven’t.

their office is the same, their phone numbers are the same, their staff are still around and they are still taking new customers on and letting spaces but now they are asking to be paid into a different bank account number and bank account name.

very dogy indeed.

my current problem is i don’t know the directors name/address but i suspect that is somewhere on companies house website.

i also don’t know what route i would take to get it back, the money claims website seems to allow you to sue anyone for upto £100k and that’s the only available route as far as i can see.

plus the director himself didn’t say via email they had no problem, it was the finance head of the company. so would it be him liable or the director?

these bastards must have conned/stole more than £100k pulling this stunt. like i say, they asked for a longer upfront payment saying they had no financial troubles and were just tidying up and enforcing rules more thoroughly and a few days later bang insolvent. BTW i suspected this and delayed payment as long as i could without risking too much. if i had in fact delayed one more day i could have avoided the overpayment. paid on a friday, got the message of insolvency the Monday after. Scum

PS: Many thanks for the time you guys have put into answering my questions.

[SNACR]

i am not even sure that they have indeed gone into liquidation, i checked companies house website and says they are active and their status is not shown as in liquidation. i wonder if they are trying to pull a fast one and just say to everyone sorry we have gone into liquidation when in fact they haven’t.

their office is the same, their phone numbers are the same, their staff are still around and they are still taking new customers on and letting spaces but now they are asking to be paid into a different bank account number and bank account name.

very dogy indeed.

my current problem is i don’t know the directors name/address but i suspect that is somewhere on companies house website.

i also don’t know what route i would take to get it back, the money claims website seems to allow you to sue anyone for upto £100k and that’s the only available route as far as i can see.

plus the director himself didn’t say via email they had no problem, it was the finance head of the company. so would it be him liable or the director?

these bastards must have conned/stole more than £100k pulling this stunt. like i say, they asked for a longer upfront payment saying they had no financial troubles and were just tidying up and enforcing rules more thoroughly and a few days later bang insolvent. BTW i suspected this and delayed payment as long as i could without risking too much. if i had in fact delayed one more day i could have avoided the overpayment. paid on a friday, got the message of insolvency the Monday after. Scum

PS: Many thanks for the time you guys have put into answering my questions.

Sounds like a pre-pack.

Here's where you can search for any formal insolvency notices:

http://www.london-gazette.co.uk/issues/recent/10/corp-insolvency

Not outside the realms they needed the cash to pay the IP.

Didn't pay by crecit card by any chance?

[libspero]

Cells,

Nothing helpful to add I'm afraid.. other than a small bump.

They clearly knew exactly what they were doing and may have profited massively from the deception.. holding them to account (as you know) will be the hard part.

The only thing I can think of is that you are presumably not the only person who has been affected. Have you spoken to any other tenants to see if they are planning to do anything (they may if you tell them you suspect the company hasn't actually gone bankrupt!).

Best of luck.

Libs

[sleepwello'nights]

Indeed I am not losing sleep over the loss, it is more the way the loss happened. I can understand companies go bust however they insisted us and the rest of their tenants bring forward payments a matter of days before they went bust. That is fraud and illegal and that is the bit I don’t like.

I asked if they were insolvent or going bankrupt and they categorically said no they had no difficulties and hence I was wondering if I could sue the directors/employees for this fraud as I suspect we will get nothing from the insolvent company.

And you are correct; we rented from the insolvent company and had no agreement directly with the landlord although we do now.

I get angry over stunts like this. But I've learnt to temper my initial reaction by recalling the a conversation I overheard between a lawyer and his colleague, " when I hear the words its a matter of principle I think that's going to cost you then".

If the head of finance belongs to a professional body you could make a complaint to them. Not sure how effective their disciplinary action would be.

[6538]

i am not even sure that they have indeed gone into liquidation, i checked companies house website and says they are active and their status is not shown as in liquidation. i wonder if they are trying to pull a fast one and just say to everyone sorry we have gone into liquidation when in fact they haven’t.

their office is the same, their phone numbers are the same, their staff are still around and they are still taking new customers on and letting spaces but now they are asking to be paid into a different bank account number and bank account name.

very dogy indeed.

my current problem is i don’t know the directors name/address but i suspect that is somewhere on companies house website.

i also don’t know what route i would take to get it back, the money claims website seems to allow you to sue anyone for upto £100k and that’s the only available route as far as i can see.

plus the director himself didn’t say via email they had no problem, it was the finance head of the company. so would it be him liable or the director?

these bastards must have conned/stole more than £100k pulling this stunt. like i say, they asked for a longer upfront payment saying they had no financial troubles and were just tidying up and enforcing rules more thoroughly and a few days later bang insolvent. BTW i suspected this and delayed payment as long as i could without risking too much. if i had in fact delayed one more day i could have avoided the overpayment. paid on a friday, got the message of insolvency the Monday after. Scum

PS: Many thanks for the time you guys have put into answering my questions.

Companies House may take a while to update their details. Anyway, as far as I know a company is not in liquidation until a Court says it is.

The directors names and addresses are on the details held at companies house which you can buy off their website for next to nohting.

If the company is still operating then I'd get in a claim for your money back as soon as possible and make the point that you consider that it's held as a constructive trust (if indeed there is a fiduciary relationship between you are the comnpany) so that your money isn't just distributed as part of the company's remaning assests. You can do it on the Moneyclaim website or with the forms from your local court. I've done it both ways in the past but I prefer handing in the forms personaly at the court as you have a limited amount of space on the web form.

It's irrelevant who told you they werenb't in trouble. Whoever it was was acting on behalf of the company and has the comany's authority to contract with people so the company is liable.

Actually, I'm having trouble understanding the details of this. Are we sure that they are even insolvent as they seem to be still trading and have just changed their bank?