Anyone involved with trade shows and exhibitions knows how cutthroat the industry can be and how crucial the right advertising at the right time is. The wrong corporate colour, misplaced logo or misjudged campaign can wipe out any chance of getting a return on the investment. In this recent debt recovery, our client provided the screens and rigging, whilst the debtor was responsible for reflecting their customer’s brands through content creation. Over two months, £40K of advertising had been provided covering a trade show and a pet exhibition.
When the invoices became due, a trickle of small payments was made, which continued for nine months. Our client was repeatedly promised full payment, which never arrived. By the time of Advocate’s instruction, the debt was £35K and a year overdue. Although the debtor had been trading for seven years, their credit rating was mediocre. Our client’s board of directors were getting understandably nervous. We later discovered some truth to what the directors had heard in the rumour mill!
Stay Another Day
Upon Advocate’s instruction, an immediate payment of £5K was made, reducing the debt to £30K. Their MD claimed an agreement had been struck for £5K per month, which we immediately dismissed as wishful thinking! With no further payment, a Final Demand was issued. Eager to avoid incurring further costs, the MD requested we stay our action until an imminent payment from an undisclosed customer was received. Vague requests have token merit and no place in debt recovery. File notes indicated such pleas had been made before, yet they were facing a High Court Judgement and trying the same tactic. Before taking it to the client, we were able to clarify their predicament. The debtor was able to evidence a £200K Payment Notice from their cosmetics customer with funds expected by international wire transfer within the next week.
From Sceptical to Steadfast
Our client was naturally sceptical, but this was the first time their board of directors had been presented with a Payment Notice to back up the promise of payment. With the board’s seal of approval, a time-limited stay of up to seven days was agreed. With the deadline about to expire, the debtor provided bank confirmation of the remaining £30K plus the £3K of statutory late payment charges ahead of receipt. Having taken a hiatus from providing screens and rigging to the debtor for this year’s trade show and pet exhibition, plans are now underway for next year, including a commitment for pro-forma invoicing to avoid history repeating itself!