An interesting situation has emerged that really makes business owners question how the law really supports them. Sweet Temptations Ltd, a supplier in the trade, went into liquidation some months ago and the company’s goodwill was sold for ?1000, this included the website, customer database, trading name and telephone number. Following investigation, the liquidator has identified that if the sale of these assets had taken place pre-liquidation these would have been expected to be worth ?7000 to ?8000. Also, after the company had entered liquidation, some interested third parties had shown an interest in the purchase of the company & assets. The best sealed bid offer received had been ?5000. The liquidator accepts that the transfer pre-liquidation could be considered as under-valued.


The creditors of Sweet Temptations Ltd have now received a letter informing them that the purchasers have now offered to increase their payment by ?1500. The loss between the actual & potential values is of course born by many of our industry suppliers.


The creditors have now been offered a choice; accept the additional ?1500 offer, or pursue a contested claim which would cost in the region of ?25,000+, which has to be paid by the creditors. If successful, this could increase the sale value to ?5000. So in short. to increase the ?1500 offer to a potential ?5000, would cost suppliers ?25,000. I am sure many suppliers wonder why fair justice cannot be delivered at an acceptable cost .

Published on: January 1st, 1970