Blue Anvil in liquidation

[Not So Wise]

Its looking like 3 months money for us guys here at O2, as O2 just want to wash their hands of us.
They say they will pay May, June and upto July 11 to Blue Anvil administrators, can they still pay monies for work not yet invoiced to the liquidised company??
Any ideas greatly received

Any money that liquidators receive from clients will go in order of priority to the creditors and you as a contractor (unless you are the one who put them into liquidation) are way way down on that list

Common sense says you would try to get client to pay you direct but if the client has a ounce of legal knowledge they will not do that as legally they will still be obliged to pay the agency (or in this case the liquidators) the full amount, thus they could end up paying twice.

Sometimes you get a liquidator that will work out a deal, either to just get the agencies commission and allow you to keep what is owed (very rare) or they "sell" the contracts to another agency and new agency take on the obligations. But in today's market agencies able to fork out that kind of money will be slim on the ground

Hate to tell you this, especially if you are owed 3 months (why why why did you let it go so far?!?!?) but if liquidators do not work out a deal to sell the contracts you will be lucky to see a fraction of the money owed to you, and even that fraction will be a long long time coming

I seriously hope you all have not been continuing to turn up on client site since you heard about the liquidation and also hope you have contacted a lawyer by now (the liquidator is NOT your friend nor on your side, do not, under any circumstances, be taking advise from them).

Oh yeah and in regards to you question, do not submit any more invoices until you consult a lawyer. Invoices at the moment mean money for liquidator and his clients, they do not necessarily mean money for you

Other than that, sorry to hear about this, it can really mess your life and finances up, as I know from hard personal experience

And to anyone else, this is exactly why you don't accept payment terms from agencies that leave you over exposed, especially in current market. From the first day of work until payment you never want much more than 5 weeks exposure (less is even better). Monthly invoices with 30 day payment terms can mean you are 8 weeks+ out of pocket before you even get an hint that something is wrong.

[teletubby]

Hate to tell you this, especially if you are owed 3 months (why why why did you let it go so far?!?!?) but if liquidators do not work out a deal to sell the contracts you will be lucky to see a fraction of the money owed to you, and even that fraction will be a long long time coming.

I'm also at O2.

The 3 months is, I guess, the same as me. That's May (which should have been paid at the end of June), June and the first week or so of July. We are all being 'migrated' to another agency who will be taking over our contracts from 10th July.

But, Blue Anvil (or the Liquidators) cannot invoice without timesheets for the first part of July, so despite the fact there may have been a contract between Blue Anvil and O2 which ended upon the agency going out of business, are O2 really bound to BA for that period if I don't send BA a timesheet? Why should I send a timesheet to enable the Liquidators to screw even more fees out of the creditors?

Surely O2 should be able to pay us for all of July as it's not been invoiced?

[minstrel]

And to anyone else, this is exactly why you don't accept payment terms from agencies that leave you over exposed, especially in current market. From the first day of work until payment you never want much more than 5 weeks exposure (less is even better). Monthly invoices with 30 day payment terms can mean you are 8 weeks+ out of pocket before you even get an hint that something is wrong.

You're absolutely spot on and I've never liked the Blue Anvil payment terms (monthly invoices with 30 days payment terms). However, when I signed the contract I was told the terms were non-negotiable and I could take it or leave it.

Would you walk away from a contract with monthly invoices with 30 day payment terms? I know a lot of agencies do pay quicker, but I thought from a standard business perspective 30 day terms was reasonable.

I did consider the risk of non-payment and it has always concerned me. However, it was a risk I knowingly accepted, so, although it's very disappointing, I don't feel I can complain too much to anyone other than the Blue Anvil Directors.

Looking on the bright side it is a clear example of taking risk and might help add some weight to an IR35 defense in the event of an investigation.

[minstrel]

I'm also at O2.

The 3 months is, I guess, the same as me. That's May (which should have been paid at the end of June), June and the first week or so of July. We are all being 'migrated' to another agency who will be taking over our contracts from 10th July.

But, Blue Anvil (or the Liquidators) cannot invoice without timesheets for the first part of July, so despite the fact there may have been a contract between Blue Anvil and O2 which ended upon the agency going out of business, are O2 really bound to BA for that period if I don't send BA a timesheet? Why should I send a timesheet to enable the Liquidators to screw even more fees out of the creditors?

Surely O2 should be able to pay us for all of July as it's not been invoiced?

I think technically they should pay Blue Anvil for the first week of July. However, they need an authorised timesheet to support the invoice.

I think if you came to an agreement with the new agency and local O2 management to invoice the first week of July through the new agency you would probably get away with it. Even if you have to do it by invoicing future days when you are on leave. Might be a bit dodgy if you put a timesheet dated for work done before 10th July through the new agency. Perhaps you worked weekends from 10th July?

The other point is that you could argue Blue Anvil were in breach of contract the moment they paid late.

I've heard of other contractors who have managed to get uninvoiced days paid through a new agency in these sorts of situations.

[Not So Wise]

We are all being 'migrated' to another agency who will be taking over our contracts from 10th July.

Is new agency covering all or most of the missing payments? If not (and if client will not let you go direct) you might want to investigate taking your contracts to 3rd agency (that client will deal with) and offering it to them and getting better ongoing payment terms and lower commission. (talk to client to see if they are willing first, you might need to sweeten them up by offering to split the "profit") Even better if you can find other contractors in same boat and do this as a group

Liquidator will have negotiated best terms for their creditors, not for you so be aware you are not under any obligation to accept your contract transfers as the reality is "contract" no longer exists as an on going concern and any restrictions about you working for client (and any simerlar clauses in client/agency contract) are probably now null and void (though once again consult a lawyer)

But, Blue Anvil (or the Liquidators) cannot invoice without timesheets for the first part of July, so despite the fact there may have been a contract between Blue Anvil and O2 which ended upon the agency going out of business, are O2 really bound to BA for that period if I don't send BA a timesheet?

Yes and no, "Yes" because if O2 pay anyone it will have be BA,"No" because without timesheet/invoices BA cannot charge O2 (of course this all will be dependant on the agency/client contract and what the liquidator might be arranging between clients and themselves and any 3rd parties, i.e. this "selling" of contracts)

Submiting invoices at this stage without written confirmation from liquidator that you will get your payment will be just basicly sending money to the liquidators clients. So unless this new agency has agreed to covering your missing payments you need to get a lawyer involved

Edit: Though just had a thought, do BA have timesheets from you? If they do they can most likely invoice client without your invoices anyway. Them billing client will be dependant on timesheets not your invoices

Would you walk away from a contract with monthly invoices with 30 day payment terms?

Truthfully? Yes, and have done so in the past

Was burned by an agency going under and once was more enough. If anything seeing an agency offering those terms is a very big warning sign to avoid them all costs because they are very obviously suffering a cash flow issue

Experience has shown me, that when you have the choice between , not working vs. working (and living/spending with the expectation of getting paid) and not suddenly getting paid after months of work, the latter is far worse. It took me over a year to undo the damage it did to my finances when it happened to me

I know a lot of agencies do pay quicker, but I thought from a standard business perspective 30 day terms was reasonable.

For standard B2B it is, but you are not taking into account what agency is actually is getting paid for, is having a contact with a job, posting on jobserve and arranging interviews and sending off invoices worth 5%-20% of every single invoice? No bloody way

Is doing that and providing a factoring service? Yes

Looking on the bright side it is a clear example of taking risk and might help add some weight to an IR35 defence in the event of an investigation.

Nope, if Hector saw things that way every contractor would be automatically outside IR35. Way they see it risk of not getting paid because client/agency folded is not a factor and honestly one of the few "definitions" of IR35 I agree with because employee's work under same risk.
You are confusing this with the type of "risk" a company might face because they spend a lot of work/money on developing a bid for a contract they know they might not get, you on other hand expected and should have got paid

[minstrel]

Truthfully? Yes, and have done so in the past

Was burned by an agency going under and once was more enough. If anything seeing an agency offering those terms is a very big warning sign to avoid them all costs because they are very obviously suffering a cash flow issue

Experience has shown me, that when you have the choice between , not working vs. working (and living/spending with the expectation of getting paid) and not suddenly getting paid after months of work, the latter is far worse. It took me over a year to undo the damage it did to my finances when it happened to me

Good point. However, you could mitigate that by living/spending on the expectation of not getting paid, taking out PCG plus insurance and being very strict on enforcement of payment terms. I guess it depends on the time expection of being able to secure another contract if you turn the bad payment terms one down. Another risk decision.

Nope, if Hector saw things that way every contractor would be automatically outside IR35. Way they see it risk of not getting paid because client/agency folded is not a factor and honestly one of the few "definitions" of IR35 I agree with because employee's work under same risk.
You are confusing this with the type of "risk" a company might face because they spend a lot of work/money on developing a bid for a contract they know they might not get, you on other hand expected and should have got paid

I take your point and I'm sure you are right that is Hector's view. I disagree that employees work under the same risk though. As I understand it employees are a preferential creditor so would get paid before the banks. That's a huge difference in risk and in the Blue Anvil situation if the contractors were considered a preferential creditor rather than an unsecured creditor we'd probably get most of our money due.

[DS23]

for anyone suffering - if you worked but have not yet had past timesheets signed and invoices submitted then see if you can buy your way out of the original agency contract via the liquidators. this will then enable you to invoice the client directly (or through another agency). it worked for me in the past when in knew something fishy was going on and withheld invoices (with clientco understanding & assenting)

however, given the same set of circumstances i would definitely advise walking at the first sign of agency collapse rather than witholding on in hope. the pain is not worth any reduced gain.