A lot of companies have gone into liquidation in recent years.
Our client claimed he was owed consulting fees by a company in liquidation, but the liquidator did not allow the proof of debt because there was a written contract with another related management company to which the consulting services would be provided, though that company was not due to become active until the building had been constructed, and the liquidator claimed that the first company merely lent money to the management company.
However, our client issued invoices to the first company and it had paid about $200,000 prior to going into liquidation.
While our client had an arguable case, they lacked any substantive documentation other than the invoices. The amount at stake, given that the creditors were likely to get much less than 50 cents in the dollar, meant that it was simply impractical to pursue the matter, so that was our advice to the client.
We could have advised the client to fight it, but it would have been expensive and the outcome too uncertain.
For an honest appraisal of your prospects in business disputes, contact Michael Paterson & Associates.