If you have ever received a demand letter from a liquidator, you understand the mixed emotions it can evoke. From confusion to worry, it is important to approach these letters with knowledge.
In this guide, we explore the intricacies of letters from liquidators, provide insights into differentiating meritorious demands from shakedowns, offer negotiation strategies, and shed light on your rights and obligations.
Liquidator’s letters could be sent to recipients for various reasons, such as overdrawn current accounts, voidable transactions or information requests. However, it is crucial to recognise that not all letters received are meritorious demands. Some may simply be shakedowns, as liquidators might have incomplete information of the company. Understanding this distinction is key to effectively managing the situation.
When faced with a letter from a liquidator, the first step is to determine the legitimacy of the claim. Ask yourself if you are likely to have liability in the situation. If the answer is yes, engaging in negotiation becomes crucial. However, navigating these discussions requires a fair and robust approach to minimise the amount you may have to pay.
On the other hand, if you believe the claim is unjustified and appears to be a shakedown, it is essential to stand your ground. Refusing to offer any money to the liquidator is your right in such circumstances. Surprisingly, this approach often leads the liquidator to abandon their pursuit.
In the realm of liquidator letters, the power of no news should not be underestimated. In many cases, when individuals choose not to respond or engage with the liquidator and offer no money, the claim often disappears. While it may not be the expected outcome, the absence of further communication usually indicates that the liquidator has let go of their demand.
Receiving a letter from a liquidator can be overwhelming, but it’s essential to remember that it does not automatically translate into an obligation to pay. Understanding the basis of the claim is critical in assessing your situation accurately. Take the time to evaluate whether you have any legal obligation to fulfill the liquidator’s request. This evaluation will empower you to make informed decisions when dealing with liquidators.
Receiving a letter from a liquidator can be a challenging experience, but knowledge and understanding are your best allies. By distinguishing meritorious demands from shakedowns, utilising effective negotiation strategies, and understanding your rights and obligations, you can navigate this complex landscape confidently.
Remember, not all liquidator demands are valid, and standing your ground when warranted is a legitimate approach. Seek professional advice if necessary, and always prioritise understanding the basis of the claim before taking any action.
If you want assistance in this area, we offer a FREE 30-minute legal consultation where we can discuss the issues and the strategy to move forward.
Brent is the Director of Norling Law. He has a wealth of experience in the District Court, High Court, Court of Appeal and Supreme Court. Brent is passionate about negotiating favourable outcomes for his clients and able to implement this in his daily negotiations.
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