Banks, Lenders & Investors County Court, Legal & Litigation Finance Rescue, Restructuring & Recovery Turnaround Winding Up Petitions

Winding-Up Petitions – the costs of doing nothing

WindingupPetition2 what do I need to doThe following story is a tale of how failing to pay moneys owed can end up not only with costs escalating but can also lead to the risk of a business being closed down as a result of a Winding-Up Petition.
A client was disputing a debt of up to £70,000 in relation to legal costs accrued by their lawyer, because unfortunately the lawyer had not achieved the result the client expected.
After protracted negotiations the lawyers agreed to accept a settlement of £5,000.
However, the client failed to pay because another director of the company refused to pay even this amount.
The lawyer then took the company to court and obtained default judgement for £15,000.
Another 12 months passed, and still the debt was not paid so finally the lawyer issued a Winding-Up Petition in respect of the £15,000 judgement plus interest and costs.
The client had no option but to pay up to avoid their company being closed down. It cost £20,000 excluding our modest fees.
Plainly this whole sorry situation could have been avoided and been considerably less costly had the client paid the £5,000 that had been agreed albeit with only one director.  Instead, doing nothing resulted in having to pay more than four times that amount and to face a cliff-hanger situation regarding its future.
This is a perfect example of how doing nothing can so exasperate creditors to the point where they lose patience altogether.  Do you have any similar examples or anecdotes to share?
For a collection of free articles on Winding-Up petitions and associated issues why not download the “Turnaround” App from your Appstore or visit the Knowledge Bank at K2 Partners.

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Stressed? Doing nothing is not an option

K2 Blog December 10 2015 OstrichDepending on personality type, people react differently to stress and the feeling it brings of being overwhelmed.
However, being frozen with fear when a business is in difficulties is really not an option if its owners want the business to survive.
According to Jeff Bezos, founder of Amazon: “Stress comes from not taking action over something that you can have some control over.”
But often in a particularly fraught situation, when it feels like there is no time to think, it is difficult to recognise the signs of stress so the first step is to recognise the symptoms. The physical symptoms may be a stiffening of the neck, sweaty palms, lethargy, displacement behaviour or the stomach clenching. The other symptoms include inertia, fear, anxiety, worry, feeling out of control, avoidance, inability to make decisions, catastrophising to see the worst possible outcome, or simply doing trivial things to take the mind off the problem.
Once you have recognised the signs you can start to address the causes.  Part of this is to analyse the situation and to break it down into manageable chunks. The other part is to research the causes and get help.
It may help to rethink your attitude to the situation so that you see it as one where there is an opportunity to move forward.
That will lead to breaking down possible actions into small steps, such as making that phone call to HMRC, if the business is having problems paying bills on time, or sending an email or calling a late-paying customer.
It also means identifying those things in the situation that you cannot deal with alone and accepting that there is a need for expert help, or even just talking to someone trustworthy who can provide a different perspective.
Breaking a difficult situation into manageable tasks is a great stress reliever.
Doing nothing is not an option.