Bills to be paid by Receiver

argentum

Just a quick question for a friend.
His company got caught for 10000.00 by company A for equipment on hire.
The receiver gives him a letter taking over the hire of the equipment that has stayed on the site from the date of receivership.
now that payment is due from the receiver he told him that another company B has taken over the contract and that they will pay for the hire of the equipment.Company B is owned by the same directors as company A.
Is this even legal and what can he do about it

argentum

argentum wrote: »

Just a quick question for a friend.
His company got caught for 10000.00 by company A for equipment on hire.
The receiver gives him a letter taking over the hire of the equipment that has stayed on the site from the date of receivership.
now that payment is due from the receiver he told him that another company B has taken over the contract and that they will pay for the hire of the equipment.Company B is owned by the same directors as company A.
Is this even legal and what can he do about it

Who cares so long as he is paid?

Edit: Also technically directors don't own companies, members do. Directors run companies although, to all intents and purposes in Ireland, there is little practical difference as members and directors are often the same thing in many cases in smaller Irish companies.

argentum

Deleted User wrote: »

Who cares so long as he is paid?

Edit: Also technically directors don't own companies, members do. Directors run companies although, to all intents and purposes in Ireland, there is little practical difference as members and directors are often the same thing in many cases in smaller Irish companies.

The problem is that company B are telling him that it will take a while to get paid as they have to wait for payment.The exact same excuse he got for non payment from company A

Surely if the receiver gave him a letter of comfort they have to pay him and not pass on the debt

argentum

argentum wrote: »

The problem is that company B are telling him that it will take a while to get paid as they have to wait for payment.The exact same excuse he got for non payment from company A

Surely if the receiver gave him a letter of comfort they have to pay him and not pass on the debt

Receiver is liable for any contracts he relied upon while acting as receiver. However if the company was sold to a new company before he paid then, just like any company sale, it's the new owners who are liable.

That said there are a lot of options available to creditors seeking to recover their debt from companies though that's more a matter for appropriate legal advice and not for a discussion forum.

Newaglish

argentum wrote: »

The problem is that company B are telling him that it will take a while to get paid as they have to wait for payment.The exact same excuse he got for non payment from company A

Surely if the receiver gave him a letter of comfort they have to pay him and not pass on the debt

He has zero legal relationship with Company B from what I understand? It would depend on the wording of the letter from the Receiver but I imagine that the Receiver has specified they will continue to hire the assets and pay for that service. Unless he signed a document transferring the operating lease to Company B, there's no reason he should be looking to them for payment.

In practice, if Company B will actually pay on time I wouldn't worry about it - but if there are any issues I'd be chasing after the Receiver and not Company B. Given the situation at the moment I'd certainly be looking to get all parties to clarify in writing what the arrangement is going forward.

Keep in mind that, by and large, any monies owed from a Receiver will be relatively secure. This is not the case with the (possible phoenix) Company B.