Liquidation and after it

mmid

Hi, im looking to liquidate my company. its basically liabilities exceed assetts, and want to avoid fraudulaent trading. Have looked into it quite a bit, i will find a liquidator, and recommendations appreciated, Where im stuck is after the liquidation. Can i open another company, and buy the name of the old company off it, and then use the old company name as a business name of the new company, for example....i liquidate Cork Ovens Ltd, set up Ovens of Cork Ltd, register Cork Ovens as a business name and then trade as Cork Ovens, if my new company Ovens of Cork Ltd buys the goodwill of the Cork Ovens Ltd, is this legall and above board.

By the way Ovens and Cork etc are just random names i picked out of my head sittong in my kitchen typing this!

TheCostumeShop.ie: Ronan

:rolleyes: So basically your trying to close down the business, not pay your debts and then continue to do the same business without having the previous debts.

Not sure where to begin... This is called Fraud. Put simply No you can't use liquidation as a method to avoid paying suppliers and then continue trading. The ODCE would hold you personally liable for all debts.

mmid

Ronan, from what i have been advised to date the reason i need to liquidate to is avoid being personally liable as to continue trading could make me guilty of fraudulent trading. I have one debt, the concerned party will not accept any payment plan and they have hinted that they may seek to have the company wound up. So im wondering if i do it myself, am i guilty under any of the companies acts.

I am looking for advice not judgement, obviously its not as straight forward as im a con man trying to get out of my debts, far from it actually im an irish man trying to continue in business after my business that took 10 years to bring this far is being attacked.

It is not a case where i received goods from a supplier, the debt is a contingent liability as there is a judgement issued in a labour court case, the other party refuse all settlement offers and have free legal aid. Next step is supreme court where i have to lodge 15 k to have the case and they lodge 0. Thats on top of my legal fees to date which are unpaid as the case is not closed, but they are in around the 8k mark now. Its a win win situation for them,and they are intent on wrecking my business.

TheCostumeShop.ie: Ronan

I appreciate your not maliciously trying to dodge debts and everyone here does have sympathies of how awful it is to be forced out of business. But what you are describing is fraud and by doing so would make you personally liable for any debts not paid.

No one here pretends to be a free substitute for proper legal advice and I think you need to get (Paid) legal advice. Also bringing in a proper negotiator to deal with the debt may be prudent.

If the businesses is sustainable you may need to be looking to sell equity to get out of the whole as an option.

antoinolachtnai

There isn't necessarily fraud there. The business is not viable. He is not going to get an equity investor in this position. The business will not work.

If he delays, he will certainly be liable for debts incurred with trading partners when the major creditor winds him up.

OP is proposing to buy the brand and the goodwill that goes with it from the liquidator. There is nothing wrong with this. By doing this, he will be saving the business and any jobs. The liquidator will have to determine a fair price.

It isn't great if you're on the receiving end of one of these situations, but unfortunately that's business. This is what can happen if you push a creditor too hard.

The OP really needs proper commercial (and legal) advice.

TheCostumeShop.ie: Ronan

You could be right but the assumption that the reason he would go back into the same business, trading the same goods, under the same name, is that it has the reasonable potential to turn a profit and therefore he would be profiting from his own liquidation.

professore

Sounds like you have no option.

What about telling the other party in a nice way that they can settle now, and get some sort of compensation from it, or otherwise you will be forced to liquidate the business and they will get little or nothing? If they say no, then liquidate the business. I don't know if there is personal bitterness there - i.e. I'm not giving that ****er a penny type thing - but you have to cast that aside.

I guess this is probably a bitter ex employee. A lot of employees - I know I did before I became self employed - think that employers all sit on millions and can afford huge settlements while the reality is (especially nowadays) they are barely scraping together a living.

mmid

Hi, thank you for all the replies. Yes we have tried explaining to them that if they proceed we will have no choice but to liquidate and have offered more than we can afford to pay. We put the personal feelings aside a long time ago, however for them they just want to ruin us.

We want to find a legal way out of it, and there must be a loop hole that will protect us. For those who are quick to judge, personal liability scare the stuffing out of me...how do i explain to my family that our house is at risk because an ex employee is not being reasonable? Do i cut back now on christmas presents for my 5 year old? Cancel her birthday party?

We spent years building the company , in this current climate as everyone knows chances of getting a job are slim. So we want to continue in business, as close to normal as possible.

I would like to add that the majority findings in the labour case was for us not keeping records. We did keep records but they disappeared the day the employees locked up and walked out. We did report it to the gardai, they even gave us a letter to the effect and that they were investigating but unfortunately the law is the law and no records is our fault. We were told we should have had back ups. Going forward we have definitely learned from our mistakes.

antoinolachtnai

TheCostumeShop.ie: Ronan wrote: »

You could be right but the assumption that the reason he would go back into the same business, trading the same goods, under the same name, is that it has the reasonable potential to turn a profit and therefore he would be profiting from his own liquidation.

Is this illegal? How so?

If he buys the goodwill off the liquidator,what would be illegal about this?

dbran

Hi

There is nothing illegal about this at all. Provided that it is handled correctly with due regard to fradulent preference and fraudulent trading.

After all the companies are both seperate legal entities with limited liability, notwithstanding the fact that they are both owned by the same shareholders.

You need to get yourself a good insolvancy practioner to advise you on this however as you could quite easily make a mess of things.

Kind Regards


dbran

TheCostumeShop.ie: Ronan

*Again I don't want to be mistaken for giving Legal advice, I don't pretend to be a lawyer on the internet or in real life*

What the Op is talking about is called "The Phoenix Syndrome" and could potentially make him personally liable if (when) the creditor makes a complaint.

We don't have all the facts here so it's somewhat pointless speculating. I suggest the OP heads over to the law library and starts reading about The Phoenix Syndrome and it's applications tests, then makes an appointment with a professional.

Edit: Possibly stand corrected here by Dbran.

antoinolachtnai

If the OP keeps trading he will end up trading insolvent and will end up with a restriction for sure. If he puts it into liquidation now, it is his best chance. If he trades on, he is making things worse.

He has a very high chance of eventually ending up having to defend himself in the High Court, but he at least has a chance of succeeding. I don't think the complaints of his creditor will make very much difference.

I really don't think this is classic 'phoenix syndrome'. I would say phoenix syndrome is where a company runs up trading losses (typically funded by the VAT and PAYE) and then rids himself of the losses through liquidation or some other means. There are some resemblances here for sure, it's not black and white.

Obviously, if the OP did something to damage or devalue the goodwill, that would be a problem.

The OP certainly needs good advice as everybody has said.

calahans

If you setup a new company you should not appear as a director, or shareholder ideally. Would make more sense for a parent or wife to do it. At least until the liquidation is done.

Doubt trading as the same company name will fly though.