MCOL against Administrators
Discussion
Having a nightmare getting paid by the administrators for a client that went into administration last August. We agreed with the administrators to 'keep the lights on' from an IT perspective so they could deal with the process of looking for a buyer/trading down inventory, and invoiced them for services post administration date as agreed in writing (obviously anything pre administration date is lost) until they gave notice to stop everything (October).
We are now at the point where the debt has remained unpaid for a number of months and promises to pay do not materialise. So MCOL is the next step I think.
Should we be raising the claim against the company 'In administration' as invoiced post administration, or the Administrators themselves (or is that the same thing legally)?
If we raise a claim against the company whilst it is in administration would that affect the winding up process, how would it be dealt with?
I asked our accountants and they suggested the claim be against the administrators. Odd situation so hoping the ph massive might have come across this before and provide some assistance.
The outstanding balance owed is just over £4k without interest and charges.
We are now at the point where the debt has remained unpaid for a number of months and promises to pay do not materialise. So MCOL is the next step I think.
Should we be raising the claim against the company 'In administration' as invoiced post administration, or the Administrators themselves (or is that the same thing legally)?
If we raise a claim against the company whilst it is in administration would that affect the winding up process, how would it be dealt with?
I asked our accountants and they suggested the claim be against the administrators. Odd situation so hoping the ph massive might have come across this before and provide some assistance.
The outstanding balance owed is just over £4k without interest and charges.
Your arrangement is with the Administrator not the company they are administrating. In any case, it would be illegal for that company to have acquired any additional liability once the administration process had started. If you have a contract or purchase order, I would be fairly certain this fact would be included in that.
Good luck. In my experience, Administrators are equipped with a one-way valve when it comes to the flow of money!
Good luck. In my experience, Administrators are equipped with a one-way valve when it comes to the flow of money!
Did you agree in writing post-administration to continue to provide services, and if so with who; who are your invoices addressed to?
Administrators act as agents for the company just as directors do. So in general they won’t be personally liable for company contracts just as directors generally aren’t. There are exceptions though for directors and administrators which depend on specific facts.
In your shoes and guessing there is no clear written post administration agreement I’d sue the entity you’ve invoiced (administrators or company) and add as alternative/secondary defendants whichever of those you didn’t invoice. Cover all your bases.
Administrators act as agents for the company just as directors do. So in general they won’t be personally liable for company contracts just as directors generally aren’t. There are exceptions though for directors and administrators which depend on specific facts.
In your shoes and guessing there is no clear written post administration agreement I’d sue the entity you’ve invoiced (administrators or company) and add as alternative/secondary defendants whichever of those you didn’t invoice. Cover all your bases.
Ok - you sue the co. You can join the administrators as alternative Ds but you may find, based on what you’ve just said, that that won’t fly and will simply create problems for you.
Make it clear in your claim that this is a post administration debt created by post administration trading and agreed to expressly by the administrators.
You’ll need the consent of the administrators to commence proceedings (write to them asking for it and saying that if they don’t grant it you’ll ask the court for permission to sue; if they don’t consent they will come in for criticism for unreasonable behaviour) or failing that the permission of the court (Insolvency Act 1986 Sch B1 para 43(6)).
Make it clear in your claim that this is a post administration debt created by post administration trading and agreed to expressly by the administrators.
You’ll need the consent of the administrators to commence proceedings (write to them asking for it and saying that if they don’t grant it you’ll ask the court for permission to sue; if they don’t consent they will come in for criticism for unreasonable behaviour) or failing that the permission of the court (Insolvency Act 1986 Sch B1 para 43(6)).
BlackWidow13 said:
Ok - you sue the co. You can join the administrators as alternative Ds but you may find, based on what you’ve just said, that that won’t fly and will simply create problems for you.
Make it clear in your claim that this is a post administration debt created by post administration trading and agreed to expressly by the administrators.
You’ll need the consent of the administrators to commence proceedings (write to them asking for it and saying that if they don’t grant it you’ll ask the court for permission to sue; if they don’t consent they will come in for criticism for unreasonable behaviour) or failing that the permission of the court (Insolvency Act 1986 Sch B1 para 43(6)).
Great info, thanks for your replies.Make it clear in your claim that this is a post administration debt created by post administration trading and agreed to expressly by the administrators.
You’ll need the consent of the administrators to commence proceedings (write to them asking for it and saying that if they don’t grant it you’ll ask the court for permission to sue; if they don’t consent they will come in for criticism for unreasonable behaviour) or failing that the permission of the court (Insolvency Act 1986 Sch B1 para 43(6)).
BlackWidow13 said:
Ok - you sue the co. You can join the administrators as alternative Ds but you may find, based on what you’ve just said, that that won’t fly and will simply create problems for you.
Make it clear in your claim that this is a post administration debt created by post administration trading and agreed to expressly by the administrators.
You’ll need the consent of the administrators to commence proceedings (write to them asking for it and saying that if they don’t grant it you’ll ask the court for permission to sue; if they don’t consent they will come in for criticism for unreasonable behaviour) or failing that the permission of the court (Insolvency Act 1986 Sch B1 para 43(6)).
To make a MCOL?Make it clear in your claim that this is a post administration debt created by post administration trading and agreed to expressly by the administrators.
You’ll need the consent of the administrators to commence proceedings (write to them asking for it and saying that if they don’t grant it you’ll ask the court for permission to sue; if they don’t consent they will come in for criticism for unreasonable behaviour) or failing that the permission of the court (Insolvency Act 1986 Sch B1 para 43(6)).
M1AGM said:
Thanks for your replies.
Yes I have it in writing from the administrators that the company 'in administration' will pay for the services used after the administration date.
Our client was X ltd, we were advised to invoice as 'X Ltd - In Administration'.
This is a little odd, particularly as they have confirmed continuation of services. I've regularly worked for administrators post appointment and the only delay is when they have me classified as connected, which requires secured creditor approval. Yes I have it in writing from the administrators that the company 'in administration' will pay for the services used after the administration date.
Our client was X ltd, we were advised to invoice as 'X Ltd - In Administration'.
Are you a connected party in any way?
I presume they're not disputing your work.
Are you holding them to ransom for prior outstanding?
Do they have the cash available or do their proposals indicate they have to sell an asset first?
You should be classed as an administration expense so priority, and that's ignoring the administrators duty to pay.
I have had about 4 times where Administrators have asked for things to be done and never had a problem, they don't need to hassle if they have appointed the person/company to do the work.
Is it worth one more time writing and explaining that is is not a debt of the company before administration but an agreement entered into after the administration, it could simply be that their accounts dept etc are lumping it into the administration.
Also look clearly at any notices on any paper work to ensure that you have been made aware if you are dealing with the company in administration.
Again I come back to my limited experience that if they have appointed you, other than an admin error, there is no mileage in knocking you.
Is it worth one more time writing and explaining that is is not a debt of the company before administration but an agreement entered into after the administration, it could simply be that their accounts dept etc are lumping it into the administration.
Also look clearly at any notices on any paper work to ensure that you have been made aware if you are dealing with the company in administration.
Again I come back to my limited experience that if they have appointed you, other than an admin error, there is no mileage in knocking you.
No not connected other than being a supplier.
Yes, have in writing we are dealing with the company post administration date. As we also have it writing what services the administrators wanted us to continue to provide, which is exactly what happened.
Late yesterday they’ve come back with queries (on invoices more than 3 months old) that just highlights the incompetence. One query relates to when they gave notice to us, which is an email from them giving notice to terminate on 21st October which was sent to us after COB on 24th October and actioned on 25th, so we’ve taken 25th as the date notice was served (and correspondence was sent to them at the time highlighting this discrepancy in their admin). Hilariously the queries have come from the same person who sent the late notice. Another query relates to an internet service being provided, that they asked to be continued as it was business critical, which is now being queried as not being part of the company’s services (which is was, and we have it all in writing). Basically having to prove what they had already agreed to in writing, feels like stalling, and wasting more of my time.
They’ve also said that statutory late payment interest charges for these invoices they havent paid cannot be charged to them but have to go into the claim against the company in administration. I find that bizarre, in effect it means they have no incentive to pay anyone on terms, is that true?
Bear in mind that the backdrop has been we had received no payments from them for the services going back to last August when they asked us to help, and no response to chases for payment. The only reason I have a dialogue with them is because I found one of the partners on linkedin and sent him a message in December saying we were about to start a claim because we hadn’t been paid.
As a key supplier to the administration process we couldn’t have been treated worse. If I ever encounter this lot again we wont be entertaining them.
Yes, have in writing we are dealing with the company post administration date. As we also have it writing what services the administrators wanted us to continue to provide, which is exactly what happened.
Late yesterday they’ve come back with queries (on invoices more than 3 months old) that just highlights the incompetence. One query relates to when they gave notice to us, which is an email from them giving notice to terminate on 21st October which was sent to us after COB on 24th October and actioned on 25th, so we’ve taken 25th as the date notice was served (and correspondence was sent to them at the time highlighting this discrepancy in their admin). Hilariously the queries have come from the same person who sent the late notice. Another query relates to an internet service being provided, that they asked to be continued as it was business critical, which is now being queried as not being part of the company’s services (which is was, and we have it all in writing). Basically having to prove what they had already agreed to in writing, feels like stalling, and wasting more of my time.
They’ve also said that statutory late payment interest charges for these invoices they havent paid cannot be charged to them but have to go into the claim against the company in administration. I find that bizarre, in effect it means they have no incentive to pay anyone on terms, is that true?
Bear in mind that the backdrop has been we had received no payments from them for the services going back to last August when they asked us to help, and no response to chases for payment. The only reason I have a dialogue with them is because I found one of the partners on linkedin and sent him a message in December saying we were about to start a claim because we hadn’t been paid.
As a key supplier to the administration process we couldn’t have been treated worse. If I ever encounter this lot again we wont be entertaining them.
Administrators are slaves to paperwork and ensuring their paper trail accords with everything.
It seems as if they're now just niggling but for what it's worth and so long as it's not material, could you agree to issue a new invoice with agreed dates and then a credit note ( they love a credit note!) all subject to being without prejudice.
Honestly the last thing you want is to have to issue proceedings because I guarantee you they will squirm and wriggle and look for any out. I mean this an disrespect but the agreement you have will potentially have lots of areas these people will question if for no other reason than to wear you own. As for the interest, it ethereal and probably not worth getting into a spat over. The Court system is completely broken and Judges will play ping pong with paperwork until they have no choice but that could be 40 to 60 wks from now.
That they are engaging with you is a good sign but make your own decision as it how much to compromise
It seems as if they're now just niggling but for what it's worth and so long as it's not material, could you agree to issue a new invoice with agreed dates and then a credit note ( they love a credit note!) all subject to being without prejudice.
Honestly the last thing you want is to have to issue proceedings because I guarantee you they will squirm and wriggle and look for any out. I mean this an disrespect but the agreement you have will potentially have lots of areas these people will question if for no other reason than to wear you own. As for the interest, it ethereal and probably not worth getting into a spat over. The Court system is completely broken and Judges will play ping pong with paperwork until they have no choice but that could be 40 to 60 wks from now.
That they are engaging with you is a good sign but make your own decision as it how much to compromise
DaveA8 said:
Administrators are slaves to paperwork and ensuring their paper trail accords with everything.
It seems as if they're now just niggling but for what it's worth and so long as it's not material, could you agree to issue a new invoice with agreed dates and then a credit note ( they love a credit note!) all subject to being without prejudice.
Honestly the last thing you want is to have to issue proceedings because I guarantee you they will squirm and wriggle and look for any out. I mean this an disrespect but the agreement you have will potentially have lots of areas these people will question if for no other reason than to wear you own. As for the interest, it ethereal and probably not worth getting into a spat over. The Court system is completely broken and Judges will play ping pong with paperwork until they have no choice but that could be 40 to 60 wks from now.
That they are engaging with you is a good sign but make your own decision as it how much to compromise
Yes we are on the same page, a bird in the hand etc.It seems as if they're now just niggling but for what it's worth and so long as it's not material, could you agree to issue a new invoice with agreed dates and then a credit note ( they love a credit note!) all subject to being without prejudice.
Honestly the last thing you want is to have to issue proceedings because I guarantee you they will squirm and wriggle and look for any out. I mean this an disrespect but the agreement you have will potentially have lots of areas these people will question if for no other reason than to wear you own. As for the interest, it ethereal and probably not worth getting into a spat over. The Court system is completely broken and Judges will play ping pong with paperwork until they have no choice but that could be 40 to 60 wks from now.
That they are engaging with you is a good sign but make your own decision as it how much to compromise
My advice would be to find the Notice of appointment of administrators on companies house.
This will have the full details of the the joint administrators, including their insolvency practitioner numbers.
I would then see who they are authorised by: ICAEW, IPA, ICAS, CAI (you can do this by searching the respective websites).
I would then complain using the Insolvency Service IP complaint portal.
I’d then send a copy of this complaint to the joint administrators, copying in their complaints team and/or general counsel.
This is a nuclear option and you’ll likely get better traction this way (unless they’re a tinpot firm), than going down the court claims route.
This will have the full details of the the joint administrators, including their insolvency practitioner numbers.
I would then see who they are authorised by: ICAEW, IPA, ICAS, CAI (you can do this by searching the respective websites).
I would then complain using the Insolvency Service IP complaint portal.
I’d then send a copy of this complaint to the joint administrators, copying in their complaints team and/or general counsel.
This is a nuclear option and you’ll likely get better traction this way (unless they’re a tinpot firm), than going down the court claims route.
Stuart2022 said:
My advice would be to find the Notice of appointment of administrators on companies house.
This will have the full details of the the joint administrators, including their insolvency practitioner numbers.
I would then see who they are authorised by: ICAEW, IPA, ICAS, CAI (you can do this by searching the respective websites).
I would then complain using the Insolvency Service IP complaint portal.
I’d then send a copy of this complaint to the joint administrators, copying in their complaints team and/or general counsel.
This is a nuclear option and you’ll likely get better traction this way (unless they’re a tinpot firm), than going down the court claims route.
Interesting thanks. No they are not a tin pot firm afaik, 11 offices around the UK with a lot of staff.This will have the full details of the the joint administrators, including their insolvency practitioner numbers.
I would then see who they are authorised by: ICAEW, IPA, ICAS, CAI (you can do this by searching the respective websites).
I would then complain using the Insolvency Service IP complaint portal.
I’d then send a copy of this complaint to the joint administrators, copying in their complaints team and/or general counsel.
This is a nuclear option and you’ll likely get better traction this way (unless they’re a tinpot firm), than going down the court claims route.
Stuart2022 said:
How did you get on with the administrators?
Hi Stuart,I wrote to them following the information provided, saying that I wanted permission to sue, and asking for their complaints team email to copy them in on the correspondence with the associated body, and hey presto, dialogue was immediately forthcoming.
We ended up agreeing a settlement figure which was less than we were due (they'd slipped in a prepayment exclusion in the written authorisation that I had missed, my fault), but not enough to carry on with the process of pursuing them, and got paid last week.
So thanks for the useful ph advice here on this thread. I'll buy any of you a beer or two if our paths cross. It's been a painful and time consuming process, and one we will definitely never repeat if we are asked to 'help' administrators again.
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