Feb 22

GREEK TRAGEDY TURNED INTO DRAMATIC FINANCIAL TRIUMPH

This is a case study illustrating how a Greek translation company recovered  a large debt from UK translation company, writes Steven Little, of Debt Collect UK LimitedOur Greece-based client was owed £109,000 (€125,000) from a UK translation company. The invoices raised were between 1 – 6 months old. Our client had no idea how to pursue the debt. They had consulted with their lawyers in Greece, who had advised them that this would be a very lengthy, time consuming and expensive process, as they would need to raise a court action locally, obtain a European Enforcement Order, transfer this into the English Courts and then have the order enforced. All of this would take 3 – 4 months depending on the courts in both countries.

Our client was in severe financial difficulty because they had not been paid for such a large sum and could not afford to pay their Greek legal advisor's costs or wait another 3 – 4 months, maybe longer, to obtain judgment in England. They were also advised that even once this had been granted, there would be no guarantees the UK translation company would have paid. This would have meant that our client would have had to have the judgment enforced, thus incurring further expense and time before being paid.

After an investigation by one of our debt recovery specialists we discovered that the company was well established having been registered in the UK for over 30 years. The company also had assets, a good net worth and a number of floating charges (Credit Agreements) outstanding to the bank and they had no judgements registered against them. We advised our clients that the chances of recovery on this case looked favourable.

We served a statutory demand via registered post and spoke with the director of the company after this was served. Our client had never spoken to the director despite their efforts before. The director of the company advised that they wanted to repay the debt in five instalments, which included £13,963.80 (€16,000) in debt recovery costs and interest which we had added to the £109,000 (€125,000), which was originally owed. Our clients agreed to the proposal and the debtors made the first two months' payments successfully. Then they defaulted. We couldn’t get a response from the director of the company or any of the staff about payment of the balance. We work in connection with a firm of UK solicitors, who, after carrying out a risk assessment on the translation company advised that a Winding Up Petition (Liquidation Petition) could be served on the company free of charge. As the translation company was well-established and had assets this passed our solicitor's risk assessment and we presented the Winding Up Petition to court. On presentation the translation company immediately paid in full - including all debt recovery, interest and legal costs.  

The benefits of using a debt collection company such as ours compared to the client’s lawyers were:

  1. The debt was recovered in full within 3 months 
  2. Client received over £40,000 within the first two months of our involvement, which helped them stay afloat and increased their cash flow
  3. The costs and interest recovered from the debtor company covered our fees in full so the collection cost them nothing and they had no legal fees to pay upfront