Commercial/Litigation - Insolvency

Bill is a sole trader and he employs several staff. He was relying on a cheque given to him by a customer. Unfortunately, it bounced. Bill was dependant on that cheque, because he in turn owed the liquidator of a building company £20,000. The liquidator had a Court judgment against Bill for £20,000.

Because Bill had defaulted on his instalment agreement with the liquidator, the liquidator obtained a bankruptcy order against Bill. The bankruptcy petition had been hanging over Bill's head for a long time.

Bill finally consulted Levi Solicitors. At that point Bill was a bankrupt and had been for two weeks. The Official Receiver was about to advertise the bankruptcy order. That would have ruined Bill.

Bill could not raise any funds at all to pay off all his creditors whilst he was a bankrupt. This was a vicious circle. There seemed to be no way out for Bill.

Although he had kept no papers, we immediately arranged to examine all the documents at Court and we spotted a small but important omission by the liquidator and his solicitor. We arranged an urgent hearing at Court with all the parties. Within six days of Bill calling into Levi Solicitors we had the bankruptcy order cancelled; the liquidator was ordered to pay the Official Receiver's costs. Through our negotiations the liquidator agreed to accept £2,500 from Bill and his partner in full and final settlement of the action against Bill (originally £20,000).