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Insolvent Trading- Is Everyone At It?

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  Insolvent Trading- Is Everyone At It? Despite the embarrassment, as a director of a large company, you will stop operating rather than risk insolvent trading.  To do otherwise is to risk being personally liable.  On the other hand, a director of a small company can usually stand the embarrassment. Yet, with the family home at risk and a 4 wheel drive to support, it is tempting to press on and see how it goes unless someone unsportingly presses the point.  In bad times, long term creditors such as banks and landlords do not want to shoot themselves in the foot by being trigger happy.  But, if you have an ungrateful supplier who cannot wait for their money, as a director, you may be accused of insolvent trading.  So what is it? A company can take on any liability, it is only when the bill arrives and it cannot pay that a problem arises.  A company which cannot pay its debts as, and when they become due is insolvent. Once the company is in this insolvent state and incurs a new debt (con

For Christmas we are giving away copies of Paul's books to our clients

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We wish all our clients a Merry Christmas and a Prosperous New Year Clients can either call or send an email to  info@brennanlaw.com.au   to request a book. The books can be collected from our office or sent to clients by post.   Clients may wish to give the book to a friend as a last minute Christmas gift. A suitable message can be included.  Paul has written books for  business owners  and for  lawyers .    

Enforcement and Mr Pickwick

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In the past when someone owed you money one of the common and popular enforcement options was to cast him (or her) into a debtor’s prison where they would rot until they paid up with interest and costs. This is what happened to Mr Pickwick in The Pickwick Papers.  He was accused of breach of promise in that he offered to marry his housekeeper, she had accepted and then he reneged.  It was a misunderstanding.  But he was sued and the housekeeper won.   He was ordered to pay damages and the housekeeper’s legal costs.  He refused to pay.  The housekeeper’s lawyers applied to the court to enforce the judgment and Mr Pickwick was committed to the Fleet debtors’ prison where he was to remain until he paid the damages and costs.  But he continued to refuse to do so and gave every appearance of being prepared to stay there until he died. The housekeeper’s solicitors had planned to receive their costs from Mr Pickwick and when this looked unlikely they claimed against the penniless housekeeper,

Statutory Demands – The Creditor’s Story - Showdown At The OK “Debtors” Corral

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You get the run around from a customer’s Account’s Department one time too many. As in the Western films, you decide to strap on your Colt .45 and collect the sawn-off shotgun from the rack on the wall.  No longer are your kinfolk gonna starve while them there debtors are down at that there saloon drinking chardonnay. Your old peaceable lawyer has a weapon that will have your debtor customers ‘a hollering and a begging’ for mercy within the month. It is called, disappointingly, the “statutory demand”. But do not let the name fool you. It is deadly, and cheap too. No proceedings need to be issued or court fees paid.  Your lawyer prepares the statutory demand and sends it to the registered office of the debtor by post.  They have 21 days to pay up or you can issue a winding up petition, the company’s bank account will be immediately frozen and all their creditors will form a posse and hunt them down. To avoid this, debtors will pay up on receiving a statutory demand even if the payment t

Debt-Where is Thy Sting?

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As you struggle to manage your personal credit crunch by cravenly avoiding your own creditors and doggedly and indignantly pursuing your debtors, there are a few rules to the game that you should know about.    There are four rules to being a successful debtor:     1. Admit nothing, especially not that you owe any money or that you are completely satisfied with the goods or services.    2. If there is anything slightly wrong with the product or services, tell the supplier in writing.    3. Try not to sign personal guarantees.    4. Do business in a company or entity that is not worth suing.    At some stage during your evasive activity, the creditor will get fed up and instruct a lawyer.  Should you surrender immediately?  Well, maybe not.  There are two types of lawyers’ letters.   a) Pay or we shall commence action.  This is called a “letter before action”.  It is very precise and states that the money must be received within say, seven days of the date of the letter.  The reason for

Suspicious circumstances -Seven things to check when you are left out of a will

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When your rich uncle leaves you out of his will the obvious explanation is that he was nuts. However, if the will appears rational and correctly executed the Court will presume that the deceased was mentally competent unless there are suspicious circumstances.     The nature of the suspicious circumstances can depend on the inventiveness of the deceased’s family, friends, and neighbours but here are seven examples:    1.    Enfeebled physical and mental state e.g. medical evidence of significant cognitive impairment and continual deterioration.  2.    Evidence of confusion e.g. concerns by friends that the deceased would sign anything put in front of him.  3.    Lack of care in preparation by the lawyer e.g. No written record or over 5 (make that 15) typos.  4.    A carer left a substantial benefit.   5.    Terms of the will departed significantly from previous wills e.g. it excludes persons who you would expect to inherit.  6.    Questions concerning the witnesses e.g. a doctor witnes

Litigation the Last Resort

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In collaboration with the Business Essentials Daily podcast we present   THE 10 GREATEST LEGAL MISTAKES IN BUSINESS. ..and how to avoid them Series  Episode 10 :  Litigation the Last Resort You may also be interested in  one of the  other Episodes in this series  The Business Essentials Daily podcast features interviews with business experts and industry leaders, providing up-to-date, insightful advice on wide-ranging topics, including winning sales strategies, HR issues, mental health and leadership including the Ten Greatest Legal Mistakes in Business Series. If you have a legal issue call a lawyer.   Paul Brennan   can be contacted on 617 5438 8199   SPONSORED BY