Ex Employer won't pay ET award and now gone into Administration

[kazm76]

Hi,

 

I'm hoping someone can offer advice or point me in the right direction to get some as I'm not in a position to pay solicitors fees.

 

My ex employer refused to pay an Employment Tribunal award made last October so I instructed a HCEO to attend to recover my money. The HCEO attended on numerous occasions but was not successful. Yesterday I received a letter from them saying he contacted my ex employer via telephone last week and was told the company is in administration. They have attached proof of this.

 

Today I contacted the administrators who told me I am an unsecured creditor and unlikely to receive any money but would still like proof of the money owed to me.

 

My ex employer is still operating his business but under a new name

 

Can anyone advise if there is any way I can recover my money. It seems totally unfair that he can seemingly have his debts written off and get away with not paying me yet still carry on trading.

 

Thank you

[ericsbrother]

If the assets of the company have been transferred to new company to avoid creditors then that is unlawful. You need to contact the administrators of old co and inform them if you have any proof of this avoidance of liabilities. Might be worth contacting companies house as well, they have the powers to strike off crooked companies but it takes for ever.

[Emmzzi]

If it is a limited company being run or wound down by administrators then that is perfectly legal.

 

If it is a limited company which has closed and a new company has opened with new directors but some of the same staff, that is perfectly legal.

 

If the administrators are a firm of accountants then they will be ensuring assets are treated properly.

[nottslad]

hi Kaz

 

Sorry to hear about your situation. The administrator is correct, this does now form an unsecured claim in the administration and you may receive a dividend if you're lucky.

 

Did High Court Enforcement list any assets on their visits? If they did these should not have been sold as part of the Administration

[kazm76]

Hi,

 

Thanks for your replies.

 

The enforcement officer has not informed me of any assets, they just said that there was a lack of any seizable assets on the property and they were unable to sight his car.

 

I have received a letter off the administrators which says a pre-packaged sale of the business and it's assets were made to another of my ex employers companies. I don't fully understand what this means to be honest so looking into that. It also states that they are not in a position to deal with unsecured creditors but I should contact them if I feel there are matters that require investigation.

 

My ex employer told the HCEO on 9th April that he had no intention of paying me and was applying for a stay of execution but then on 16th April instructed that the company be placed in administration. I'm not sure whether this justifies and investigation or not? It is clear he has done this to avoid paying me and other creditors. He has done the same in the past.

 

Sorry to ramble, I'm just very annoyed and frustrated by the whole situation

[steampowered]

In an ordinary insolvency, an administrator would be appointed who would then try to negotiate a sale of the business or liquidate it. The difference with pre-packs is that the sale is agreed before the business becomes insolvency. In a pre-pack the management consult with an insolvency practitioner and agree the terms on which the business will be sold, the business is then put into insolvency and is immediately sold.

 

This could be totally legitimate. If a company starts to fail, the shareholders of that company are not obliged to fund it. They can let it go to the wall, and when it does so they can buy the company (or its assets) back from the administrator if that is the buy way to raise money to pay creditors.

 

You can only go against the owner if he tried to strip the company's assets prior to insolvency. Otherwise the issue is with the administrators because they are the ones responsible for maximising the money available for creditors. Pre-packs can be controversial because there is scope for abuse if the administrator does not properly check the value of the company and lets it go at an undervalue. If this is what happened you could bring a claim against the administrators for breach of their statutory duty, but these claims are difficult because it is hard to prove that the administrator would have got more money by selling the company to someone else.

 

Realistically I don't think there is a great deal you can do here. It is worth going on Companies House and downloading the administration accounts for the company (will cost you £1). Hopefully this will give you some idea of the financial state of the company when it was sold.