Client in administration

[d000hg]

If you're on 30 day terms how many months behind are they? Did they fail to pay several invoices and then went bust and you realised why? Or are you on £900/day?

[Lance]

Been told that my July invoice is with the administrators (2p in the pound I'm hearing!) but the steer given from them is that they expect everyone to continue to work on the project whilst 'things are sorted'.

Technically my contract is null and void I guess.

Who’s telling you you’ll get 2p in the pound?
Who expects you to continue to work?
That’s kinda key to what you do next.

Administrators may decide to pay a percentage to creditors. But I’m not sure how they engage you for further work. Ask them directly. They’ll be pretty straight up.
If it’s just an employee telling you they expect you to continue it’s probably because they don’t understand.

Your contract is still valid, unless there is a clause about be client going into administration. They still exist as a legal entity, just under new management with special authority.

[northernladuk]

Your contract is still valid, unless there is a clause about be client going into administration. They still exist as a legal entity, just under new management with special authority.

I'm not so sure that's 100% true is it? I'd want to look in to it further than take that assumption.

[uk contractor]

https://www.theguardian.com/business...-sports-direct
No wonder Mike Ashley is so rich this is daylight robbery!

[washed up contractor]

The retail client I contract my services to has just gone into administration (you can probably guess who it is!) but has been 'part bought out' by another company who is simply buying the stock and stores, not the debt.

I'm contracting direct with them on 30 days payment terms.

Been told that my July invoice is with the administrators (2p in the pound I'm hearing!) but the steer given from them is that they expect everyone to continue to work on the project whilst 'things are sorted'.

Technically my contract is null and void I guess.

My first inclination is to jump ship and take it on the chin (I put my loss at around £18k) but would welcome others thoughts and if anyone has been in a similar position before?

Thanks,
Albert

You must break the contract and not continue working 'until things are sorted'.' It's not your money they would lose and they would say 'carry on' wouldnt they?

Personally Id stop working immediately and not submit any invoice until the position is sorted. If you submit an invoice now you will kiss goodbye to that money.

Im not sure if Qdos or someone like Bauer & Cotterell can advise but do not work the contract until you have some solid info.

[WordIsBond]

Or are you on £900/day?

Maybe that's why they went bust....

https://www.theguardian.com/business...-sports-direct
No wonder Mike Ashley is so rich this is daylight robbery!

No, it isn't. Mike Ashley has stepped into a situation where a company was in absolute collapse, their hope for investment from China backed out, the whole situation was in disarray, and he is at least salvaging some of the jobs, more than if he hadn't got involved. He's no hero, he hopes to make a lot of money, but he's not ripping anyone off.

The daylight robbery took place when the prior regime ran the business into the ground, took on debts (like to the OP) that they couldn't pay, and instead of cutting their cloth to fit their means, they kept on spending and running up debts. They kept asking OP (and others) to come in and work when they fully knew there was a serious risk they wouldn't be able to pay him for services already provided. They ripped off their suppliers and their landlords by making commitments they could have no reasonable assurance of being able to keep.

Fortunately their pension fund was mostly funded but it's possible they also ripped off their employees by making pension commitments that couldn't be kept, too.

None of that is Mike Ashley's fault. A lot of people are going to get hurt, and he's decided which ones it is going to have to be to try and keep it a going concern, return it to profit, and safeguard as many jobs as possible by keeping as many stores open as he can. Very unpleasant for the suppliers like OP, but there's nothing dishonest or immoral about it. It's risky because he may lose the goodwill of those suppliers and that's a dangerous game for a business to play, but it's a reasonable gamble to make in the situation.

I have little use for the man but he's not the bad guy here.

[silverlight1]

You should certainly look at getting other contractors together and exert some pressure.

There might also be some opportunities in this situation.

I had a similar situation once and we talked direct to the administrators and once he realised how valuable our skills were to their plans to break up IT systems to sell the business they agreed to honour our invoices and I had another years work at a lucrative rate.

They let all the perm IT staff go and me and a group of other contractors helped them divest the business.

[Lance]

I'm not so sure that's 100% true is it? I'd want to look in to it further than take that assumption.

The main aim of a company going into administration is to rescue the company

Paragraph 3(1) of Schedule B(1) of the Act (Insolvency Act 1986 - and additions made by the Enterprise Act 2002,) states that an administrator of a company must perform his functions with the objective of:

(a) rescuing the company as a going concern; or

(b) achieving a better result for the company's creditors as a whole than would be likely if the company were wound up (without first being in administration); or

(c) realising property in order to make a distribution to one or more secured or preferential creditors

If the administrators are attempting (a) with part, or all of the company, then it's still a legal entity.

Consequences for existing contracts

Although it will be noted above that administration does have an affect on the enforcement rights of the other contracting party, administration does not have an affect on the legal status of the company in administration

source : https://www.taglaw.com/insolvency/12...tracts103.html

Which pretty much says what I said in longer words.

I stand by my initial point of 'ask the administrator' as they are the ones who are now in control.

Caveat: IANAL & it's complex.

[GhostofTarbera]

Client in administration

Just like rangers, administrators come in, gather what is due from debtors , pay themselves 95% of this amount and give the remaining to those owed money

[LondonManc]

Just like rangers, administrators come in, gather what is due from debtors , pay themselves 95% of this amount and give the remaining to those owed money

Correct. An administrator's duty to themselves is to legally remove as much money as they can while appeasing creditors with the bare minimum that they can get away with. Allegedly.