Case Studies

If you or your business owe a creditor money, they could issue a statutory demand. This is the first step to making you bankrupt or winding up your business....more

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Case Studies

Bell & Company specialise in helping those who have received Statutory Demands. Our team explore all options available to find the best possible solution for you. Below are some of the recent settlements we have achieved for clients who have found themselves on the wrong end of a Statutory Demand.

Property Development Gone Wrong: £330,000 Saved

Our clients had signed Joint and Several Personal Guarantees for £495,000 for a property development company facility.

The business struggled, and the creditor called in the Personal Guarantees.

The lender wasted no time in issuing Statutory Demands against the clients for the full value of the debt.

The team at Bell & Company stressed the importance of acting with urgency here as there were only 8 days available, of the 18-21 day grace period, to reply to the Statutory Demand.

The key issue here was our clients’ high net worth. Mindful of this, the lender issued a Stat Demand assuming this would be the quickest way to recover their money. Also, the fees involved here if not dealt with correctly would ‘balloon’.

A summary of the case is:

  • The client procrastinated right up until the 18-21 day period to respond, despite our initial advice,
  • When we were appointed, Bell & Company immediately started to work on a case that would enable us to look to set aside the Statutory Demand, on a few issues arising,
  • Our strategists, working in conjunction with our appointed legal team (who work on our instruction), were able to set aside the Stat Demand, after 3 Hearings taking 5 months,
  • With this backdrop we then diligently and forensically reported to the lender,
  • The Bank and their advisors believed the issuance of a Statutory Demand was a simple ‘smash and grab’. However as is often the case with asset rich individuals, problems and issues often exist in the background, in this case potentiality another litigation issue,
  • After tough negotiations with a difficult (putting it politely) Creditor, the Bank accepted an offer of £175,000, including retaining an asset also secured to the lender. The net sum paid in cash terms overall was c£120,000.
Net savings after the issuance of the Stat Demand through to settlement of c£330,000.

 

Fraudulent Personal Guarantee: Statutory Demand Set Aside

Our client had taken a loan out for his business, the lender asked for extra security so he ‘allegedly’ signed a Personal Guarantee for £800,000, however, this was capped at £500,000.

The business continued to struggle and eventually entered insolvency, at this point, the Personal Guarantee became triggered with the original lender wanting to recoup monies owed.

Facts of the case

  • After several pursual attempts, the lender went silent for a while…you know that saying “no news is good news” not in this case…
  • The loan was sold to a third-party, who then appointed another firm to act on their behalf to collect the debt.
  • This further complicated the situation and made it more difficult to negotiate properly.
  • Our client was part owner of a successful business and had several property investments, because of his high net worth, he was issued with a Statutory Demand.
  • Bell & Company were quick to act with our Strategist Rory and his team gathering evidence to set aside the Statutory Demand, with the view that his Personal Guarantee had been fraudulently obtained.
  • After gathering evidence and consulting with legal representatives, we got the Statutory Demand set aside
  • Using this evidence, we also proved that the Personal Guarantee was fraudulent
We got the third party to withdraw their claim, preventing Bankruptcy proceedings, and writing off the full £500,000.

 

 Rental Lease Personal Guarantee: Bankruptcy Prevented 

Our client is a director of a limited company and a designated member of an LLP which were both subject to a lease agreement for the commercial premises they used.

Due to Covid-19 they had to close their business down and were unable to pay their business debts. They quickly fell behind on the rent owed to their landlord in respect of the premises because of the this.

Despite owing a relatively small amount, they had breached the terms of the contract. As a result, the landlords were claiming £82,500 for the remainder of the lease term.

To put it in context, they couldn’t pay 1 month’s rent, and the landlord asked them to pay over a year’s worth immediately.

Facts of the case:

  • The landlords wasted no time in issuing a Stat Demand against both businesses
  • So, he was not being personally pursued but, he had several personally guaranteed business loans.
  • If not dealt with these Statutory Demands would have forced his business into liquidation, triggering these personal guarantees, and leading to his personal Bankruptcy.
  • We defended the Statutory Demands, and the necessary paperwork was lodged at court to allow space to commence negotiation on the PG.
  • In the meantime, we came on record with the landlord’s solicitors and substantiated the fact that they could never manage to pay this sum. We then made two submissions for a full and final settlement.
After a short period of negotiation, the landlord’s solicitors accepted £22,500 for the £82,500 and withdrew their statutory demands accordingly.

The Client was delighted as we have saved both companies from liquidation, protected his personal finances and saved him £57,000 on the lease.

 

 Company Liquidation: Multiple Statutory Demands Issued

Our client and his wife were directors of a limited company went in to liquidation in 2016. They thought that they only had a small tax liability. However, the liquidator claimed they had had illegally taken money from the company (known as a Director’s Loan) and transferred money to another company, even though these transactions were lawful.

As a result, both the clients, as well as their daughter ended up being personally pursued by the Liquidator for this money, despite it being a business debt.

Facts of the case:

  • Overall, the liquidator was claiming they owed £125,000, although the true amount was much smaller. This included £36,000 in fees from the liquidator.
  • The case was swiftly passed on to a solicitor who had issued statutory demands against all 3 family members.
  • This would have ended with them all being made individually Bankrupt and losing their respective homes.
  • We defended these stats demands to give us time to negotiate with the solicitors.
  • We initially submitted a low offer of £15,000 which the lender rejected. We had increased the offer to £20,000.
  • The creditor accepted this offer and prevented any further legal proceedings against the clients and allowed them to move on with their lives.
Total savings achieved were £105,000 and the matter was closed once and for all

This case illustrates just how easy it is for a creditor to serve a statutory demand. With relatively little evidence the liquidator could easily have made his entire family Bankrupt. Luckily he approached Bell & Company at the right time and we achieved a great settlement for him.

 

Could it be you?

If you have received a Statutory Demand, now is the time to act. Bell & Company have the knowledge and experience to solve all of your issues. Call us on 0330 159 5820 to speak to a specialist today.

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