Advocate Debt Recovery has successfully recovered £23.4K in 2 consecutive cases against the same debtor but with different clients. In the first case, a Notice of Court Proceedings was followed by a Notice of Insolvency Proceedings in the second. Although the debtor had a strong credit report, it became clear during the first recovery that not all was as well as it first appeared. This gave grounds to suspect they could become insolvent at any time.
Stanford Duck Syndrome
Imagine a duck gliding effortlessly along the pond. Now imagine what is going on just beneath the water. Paddling fast and furious caught between the territorial mallard in the middle and the barking dog of the shallows. Our debtor was just that duck. Trading since the mid-1990s our debtor has survived 3 recessions and enjoyed much success. The business has grown from basic telephone lines to data security, web-based communication and critical infrastructure monitoring services. Their most recent set of accounts showed substantial fixed assets and cash. Year-End accounts are a snapshot in time and it can be 18 months before new accounts are filed. Indicators such as County Court Judgments can provide a current barometer of liquidity. All this was key to obtaining consecutive recoveries.
Debt Recovery 1
Our client is a Yorkshire based firm making habitable enclosures and storage structures out of Glass Reinforced Fibre (GRP). The majority of products are bespoke made-to-order units, which is exactly what the debtor required. A GRP enclosure was fabricated and delivered. Having built up a relationship with the debtor through several commissions, extended credit terms had been granted for this particular unit. Emails and phone calls were not being returned and the client was seemingly being ignored. The £3.4K debt was approaching 30 days overdue at the time of Advocate’s instruction. Our discussions with Accounts Payable confirmed suspicions of cashflow difficulties. The debtor was themselves waiting on payment from customers. Faced with the increasing urgency of our action, full payment was received on day 7.
Debt Recovery 2
Shortly after the GRP enclosure debt was recovered, the debtor came up on Advocate’s radar again. This time our client is an international wholesaler and installer of fibre optic communications with a 50-day overdue invoice for £20K. Shortly after the first case, a small value CCJ hit the debtor’s credit report. Following our recent experience of their cashflow difficulties along with the CCJ, and the client being met with a wall of silence; a more robust course of action was required. A Notice of Insolvency Proceedings was issued. We struck up a dialogue with one of the directors. They explained refinancing expected earlier in the year had fallen through and the shareholders had been finalising a sale during Case 1. With the sale now complete the new North American owners were eager to avoid Advocate issuing a Winding Up Petition. A firm commitment was received for payment in full. Owing to the investors needing to get their feet beneath the table, it could not be immediate. Full payment was received on day 12 of Advocate’s instruction.
When 2 Becomes Won
In both cases, the statutory late payment charges were paid in parallel with the principal debts. It was a win-win all around. Our client’s received payment, Advocate’s fees were paid, and the debtor got to continue their journey of 30+ years. Where there is one creditor struggling to receive payment, there are bound to be others. Action taken by Advocate put the clients first in line to recover payment and without the need for court proceedings.