Ellisons’ Insolvency and Debt Recovery team were delighted to successfully recover a debt over £100,000 for their client. The case was successfully managed by Partner, Tracy England and Legal Assistant, Ellen Dearsley.

Ellisons have acted for a company who was owed over £125,000 for refurbishment works provided to the debtor company. The client had been negotiating with the debtor and had permitted the debtor to delay payment by 6 months as a form of retention. However, after the retention period came to an end the debtor failed to pay and did not provide any reason for the delay. The client waited a further 5 months for payment before instructing Ellisons to assist in recovering the debt.

Upon gaining instructions, Ellisons proceeded to issue a Letter Before Claim to the debtor with a request for full payment within 14 days. After the debtor failed to engage in a response to the Letter Before Claim, Ellisons were instructed to serve a Statutory Demand on the debtor.  The Statutory Demand was also ignored by the debtor and so Ellisons were instructed to proceed to issue a Winding-up Petition under Section 122(1)(f) of the Insolvency Act 1986. The Petition would allow the Court to wind up the debtor company and place it in liquidation, on the basis that it was unable to pay its debts as and when they fell due.

In response to receiving the petition the debtor agreed to make payment in settlement of the debt. Our client was able to recover the debt in its entirety, together with legal costs and interest on the sum outstanding, without the matter proceeding to a hearing. It is rare that a client recovers its full legal costs together with interest. The client and our team were delighted with the result.

Whilst issuing a Winding-up Petition is often a last resort, this case is a clear demonstration of the effectiveness of issuing a petition in order to bring a debtor to the table where other methods have proven ineffective, and there is no reason given for the failure to pay the outstanding balance on the invoice.

Ellisons’ highly experienced Insolvency and Debt Recovery team work across Essex and Suffolk and can provide advice and assist in the recovery of debts including using the tools available within the Insolvency Act 1986.

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