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So for all you small business owners out there... Another way the courts and government can fuck you in the ass...


I had a customer with an outstanding balance - They needed me to sign off on an unconditional Release of Lien. The product we provided was for a job that required my customer to be bonded.

I refused to sign, until I received payment. Payment was sent FedEx, deposited, once cleared, the release was signed and returned.

Customer goes bankrupt 48 days later.

Now... A Preference Action suit has been filed against me. The trustee of the bankruptcy is seeking to have the payment refunded - even though I gave up all rights to seek repossession of my goods provided.



This fucking bullshit makes me want to close the doors and say FUCK YOU.
 

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Yep. Been there myself a few times. Last was for 16k in materials.

Between that and bad checks, its enough to drive me insane. Courts don't care about bad checks anymore. I had one that was thrown out because I didn't know the license plate number of the truck he drove when he picked up materials. Another was a 3800 dollar bad check. Court ordered him to pay 20 a month until its paid off.
 

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You are bringing up bad memories. I worked for a consulting firm that went belly up in 1997, and the BK trustee reached out to everyone who had received money from the entitity in the prior two years. It was legal. I can see how being on the other end would majorly suck.
 

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Discussion Starter #6
I wish this was for only $16,000.... I could absorb that

One mistake I made was to make the customer pay their entire balance, not just the balance on the materials for the bonded job.

They are seeking repayment of $84K + change. Money that has been long spent in paying my suppliers, overhead, and payroll....

I used my local attorneys, now it looks like Im going to get counsel in the district the suit was filed.... I have half an idea to just spend myself into bankruptcy with lawyers than give these fucksticks back their money.
 

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Now... A Preference Action suit has been filed against me. The trustee of the bankruptcy is seeking to have the payment refunded - even though I gave up all rights to seek repossession of my goods provided.

How is this even possible? I'd like to say I am shocked, but in this day and age, it doesn't surprise me all that much... and that is a scary thought.

I would counter-sue them for theft (your time to defend this) and for a frivolous law suit. Take it in front of a jury and see who gets fucked. Make sure you have a good attorney and make the other party pay the lawyers fees.

My company went to a cash up front policy last year. No more waiting to get paid for work you have already done 30 or 60 days ago.
 

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How is this even possible? I'd like to say I am shocked, but in this day and age, it doesn't surprise me all that much... and that is a scary thought.

I would counter-sue them for theft (your time to defend this) and for a frivolous law suit. Take it in front of a jury and see who gets fucked. Make sure you have a good attorney and make the other party pay the lawyers fees.

My company went to a cash up front policy last year. No more waiting to get paid for work you have already done 30 or 60 days ago.
Happens every day ....... There must be an over agressive Trustee involved .......... I had an issue with a TV network that went under and the ousted President had fudged numbers and double billed 16 independant producers ......... all of em got scared and paid ....... me being the dick I am fought it won it for $12,000 less then they were coming after me for (that I didn't owe) So what did I win? I was still missing hard earned money but to me it was about principle
 

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Discussion Starter #13
It is basicly legal extortion....

The lawyers who file on behalf of the Trustee are on a commission type payment basis.

As a creditor, I can take 2 courses... Negotiate and settle - usually would be for a substantial sum, but not the full amount.

Or Fight it... Now, how much am I willing to spend to fight? I can easily run up $100k+ in lawyer fees if this goes to litigation, and if I lose I can be sued for additional lawyer costs for the trustee, interest, and fees.

The only people who win, are the fucking lawyers.
 

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The crappy part of it is that the preferential payment provisions of bankruptcy were intended to prevent people or companies that knew they were filing to pay off what they owed to friends and family prior to filing. However, they are now being abused by aggressive trustees (who get paid out of what assets there is) to go after anyone who got a large payment prior to filing. It is a real conflict of interest as the trustee has a financial stake in what they can get back from anyone who got paid prior to filing.
 

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The trustees should not have their pay based on anything to do with the BK...As for the lawyers, thats just another wonderful piece of American capitalism at its best.
 

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I wish this was for only $16,000.... I could absorb that

One mistake I made was to make the customer pay their entire balance, not just the balance on the materials for the bonded job.

They are seeking repayment of $84K + change. Money that has been long spent in paying my suppliers, overhead, and payroll....

I used my local attorneys, now it looks like Im going to get counsel in the district the suit was filed.... I have half an idea to just spend myself into bankruptcy with lawyers than give these fucksticks back their money.
Talk to your lawyer,,file bankruptcy on your company, form a new corp with a DBA of the old name ,,tell them to go fuck themselves.
I don't know if you can do this where you live , but it's legal in Florida ,,I know a couple of guys that have done it
 

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Yep. Been there myself a few times. Last was for 16k in materials.

Between that and bad checks, its enough to drive me insane. Courts don't care about bad checks anymore. I had one that was thrown out because I didn't know the license plate number of the truck he drove when he picked up materials. Another was a 3800 dollar bad check. Court ordered him to pay 20 a month until its paid off.
Rule #1 of business, never ever take checks from shady business's or single parties.
Rule #2, never ever send goods or perform a service/release a car untill a check has cleared and is in your bank. If they can write you a check, then can hand you cash (check it for fake) or a postal money order.
Rule #3, never accept COD checks.
Rule #4, trust your gut. If you feel a deal is bad, DO NOT DO IT!

Yes, I am very picky about my money. I have never been ripped off. People have tried, but they have failed! I ship no parts to private parties unless they are paid for prior to shipping. That will always be my policy!
 
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