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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3613
Experience:  Solicitors 2 years plus PQE
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I run my own garage and have done for years I've been

Resolved Question:

I run my own garage and have done for years I've been repairing a company's vehicles for 2 years thay are now in financial difficulty and can't pay there invoices so I'm holding there vehicles . What is my rights . I think thay will put there company though in the next few days where do I stand would the liquidators have rights to the vehicles ?
Submitted: 9 months ago.
Category: Law
Expert:  Alex J. replied 9 months ago.

Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. Do you have any terms and conditions that let you exercise a lien over the vehicles? Are the vehicles worth more than your debt? Kind regards AJ

Customer: replied 9 months ago.
I don't have a lien .The amount thay owe is spread over a few vehicles so I'm holding on to some of them thay own the vehicles thay don't have any finance on them . The don't think the vehicles are worth more than the debt
Expert:  Alex J. replied 9 months ago.

Hi, Thank you. Without a lien in your terms and conditions for the unpaid debt, I am afraid any liquidator would be able to come and take the vehicles. You would then have to register your debt in the liquidation. What is the difference between the value of the cars and your debt? Kind regards AJ

Customer: replied 9 months ago.
There's about £1500 difference.
Would it be legal for the company to sign the vehicles over to me for the debt owed before thay go into liquidation ?
Expert:  Alex J. replied 9 months ago.

Hi Thank you. The company could do this but they risk committing what is known as a preference (S. 239 of the Insolvency Act 1986) - if they do this and the liquidator finds out, be prepared for an argument with the liquidator over returning the vehicles or proceeds of sale from them. Kind regards AJ

Customer: replied 9 months ago.
Thanks can I take the parts off the vehicles that I supplied ?
Expert:  Alex J. replied 9 months ago.

Hi, Thank you. Yes if they have not been paid for and they can be removed without damaging the vehicle. Kind regards AJ

Customer: replied 9 months ago.
I do have the registration do comments does this help ?Can I have them to sign a backdated lien and would this give me more rights over the vehicles ?
Expert:  Alex J. replied 9 months ago.

Hi, Thank you. ***** would not do this, that would potentially be viewed as fraud. If you want to take ownership of the vehicles all you can do is ask them to be assigned to you in lieu of the date and then take your chances with the liquidator. In the mean time remove any parts that have not been paid for to reduce what you are owed. Anything you do that is aimed at deliberately avoiding the liquidator can potentially be challenged. Kind regards AJ

Customer: replied 9 months ago.
Thanks for that I've jest found out that the vehicles that I hold have been transferred to one of the other companies that thay run about six months ago so the liquidators won't come after them so I guess that's good for me . But thay have put my invoices under the company that thay are going to liquidate is that legal? Thanks jeff
Expert:  Alex J. replied 9 months ago.

Hi, Thank you. No that would not be legal, especially if the liquidator challenge that transaction or the company was contemplating liquidation at the time of the transfer. Are they offering you the vehicles in exchange for the debt?

Customer: replied 9 months ago.
Thanks not offering them as yet.How far can the liquidator look back on transaction like transferring assets etc befour going into liquidation ?As I'm holding the vehicles can thay accuse me of steeling them ?
Expert:  Alex J. replied 9 months ago.

Thank you for a preference (or what is known as a transaction at an undervalue) it would be the 12 month period immediately preceding the date that the winding up order (i.e date of the liquidation) is made.

If you are holding the vehicles in lieu of payment I suppose there may be a criminal issue here, but you could always say that you are with holding them as a result of the dispute and therefore may need to remove your parts from them if payment is not going to be made.

Alex J., Solicitor
Category: Law
Satisfied Customers: 3613
Experience: Solicitors 2 years plus PQE
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