When Charles O’Neal’s demands for payment of £14,000, plus VAT, from an ex-business associate, fell on deaf ears, Charles felt that he was left with no other option but to instruct us to collect payment on his behalf, from someone he once considered to be a friend.
Charles said, “The moment I contacted the First Capitol team, they assessed the situation and set out a strategy to recoup the cash.”
The debt was well documented and supported with a thorough communication audit trail.
Our initial demands for payment were also ignored and it was agreed with Charles that the next step was to issue a Statutory Demand for payment. This proved to be a game changer. The debtor immediately instructed his solicitor, who fired off a letter to us insisting that the debt was disputed and demanding that we withdraw the Statutory Demand or face costs on an indemnity basis when the debt was set aside by a Judge. On Charles’s instructions, we sent a letter back insisting that the debt was owed and, in no uncertain terms, that we had no intention of withdrawing the Demand.
When they realised that our client was not going to back down he instructed his solicitor to issue a counterclaim for half a million pounds, citing all sorts of spurious allegations based on the contract that the debt related to loss of performance, loss of business, loss of profit, etc.
Charles commented: “This person was not only dishonest but also turned out to be a malicious and nasty individual. The debt was well documented but that did not stop the debtor fabricating some fantastic lies to try to get out of paying what was owed.”
The day before the demand was due to be heard in court, the solicitor for the debtor sent a fax to inform us that they were withdrawing their “Restraining Order” (to have the demand set aside). In the meantime, we were alerted by Experian that the debtor was discreetly trying to liquidate his company and had begun to transfer some of the assets to a “Phoenix” company and this, it appears, with the full knowledge of his solicitor. We immediately contacted Companies House and sent them a copy of the Statutory Demand together with a copy of the court documentation. By now the deadline for payment had expired. A ninety-day hold was put in place by Companies House to stop the debtor from dissolving the company.
This turned out to be another game changer because we were now in the driving seat. On behalf of our client, we presented a winding-up petition to the court and a hearing date was set.
A barrister was instructed and some two months later the case was heard and judgment was awarded in Charles’s favour and he was awarded approximately £24,000, including costs and interest.
Charles responded, “It was a complete success. I recovered the lot, plus costs and interest. The First Capitol team were completely transparent about how it all worked and what to expect.”
Collections Managers comments:
In this particular case, the debtor thought that he was being clever. Even in the face of cast iron documentary evidence, he peddled untruths which were full of holes. We were shocked that his solicitor who boarded on being complicit to his client’s web of deceit didn’t offer our client mediation. Sometimes disputes of this nature are best settled by mediation. Our client did initially offer a compromise settlement which was flatly rejected by the debtors’ solicitor. In cases where a County Court summons has been issued the courts do often offer mediation. However, in this particular set of circumstances, there is no opportunity unless it is suggested by either party. I believe that if the debtors’ solicitor had offered to mediate, they could have saved their client a considerable amount of money and inconvenience.