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You can only sue the company rather than individuals. The company is limited liability and basically has no assets so you could sue and win but failed to get any money or have your legal expenses reimbursed.

 

Firstly what a dreadful story, I feel so sorry for you.

 

You correctly state the law but I am not sure if it is that simple. You probably know this already but stripping out the boat could have interesting legal inmplications, particularly if there was a court order in place. "Piercing the corporate veil" is also possible on occasions, Directors can and do get personally sued for negligence or "breaches of trust" and then their liabilities are unlimited.

 

Incidentally I would suggest you make and keep a pdf copy of their web site.

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I do hope it comes right in the end. Can you sue the Harps for the balance due back from your £80,000?

 

All this has totally put me off commissioning a new build. I think I'll go back to looking at nearly new, or at least ready completed boats.

 

It's a pity, but the good guys are out there!

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Incidentally I would suggest you make and keep a pdf copy of their web site.

 

Can anyone explain why there is not one instance of the word "Limited" on their website?

 

It just refers to "Ben Harp Narrowboats" or" Ben Harp Narrowboat Builders"

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Benharp Narrowboats is registered with Companies House.

 

ETA Companies House Number: 05834759

Incorporation Date: 01 Jun 2006

Latest set of accounts:Filed on: 31 Mar 11

Edited by Tim
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Firstly what a dreadful story, I feel so sorry for you.

 

You correctly state the law but I am not sure if it is that simple. You probably know this already but stripping out the boat could have interesting legal inmplications, particularly if there was a court order in place. "Piercing the corporate veil" is also possible on occasions, Directors can and do get personally sued for negligence or "breaches of trust" and then their liabilities are unlimited.

 

Incidentally I would suggest you make and keep a pdf copy of their web site.

 

I have deliberately created a time "lag" between what I write publicly here (and on our blog) and our current actions. As far as we are concerned we're nowhere near the end of this - not even near the middle. All options are on the table! I will say we're not looking for a pyrrhic victory. The directors must have assets to make it worth the cost.

 

The insolvency expert we contacted on arrival in the UK looked at the financial records in Companies House and advised Ben Harp Narrowboat Builders Ltd was trading whilst insolvent in 2009, 2010 and probably 2011.

 

Oh, I made a copy of all the information on their website two months ago!

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I have deliberately created a time "lag" between what I write publicly here (and on our blog) and our current actions. As far as we are concerned we're nowhere near the end of this - not even near the middle. All options are on the table! I will say we're not looking for a pyrrhic victory. The directors must have assets to make it worth the cost.

 

The insolvency expert we contacted on arrival in the UK looked at the financial records in Companies House and advised Ben Harp Narrowboat Builders Ltd was trading whilst insolvent in 2009, 2010 and probably 2011.

 

Oh, I made a copy of all the information on their website two months ago!

Very wise. I wish you well.

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Publicly available information on Ben Harp Narrowboats Ltd is quite illuminating.

 

In September 2009 they attempted to dissolve the company. This was objected to (it's usually by a creditor which could but doesn't necessarily include HMRC) and the action was suspended pending the outcome of that objection.

 

In November 2009 The striking-off action was formally discontinued by Companies House. You can't strike off a company if a creditor objects.

 

Current accounts are overdue, but in 2010 they had nothing in the bank, a net worth of minus £34k, and total liabilities well in excess of £56k.

 

Not that anyone will be surprised to learn that it's not a healthy company.

 

Tony

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Checking the Companies House records is a good thing to do before spending a lot of money with any kind of builder.

 

But get an accountant to do it.

 

 

It is worth checking regardless, however depending when you enquire the information you get will at best be around 6 months old and up to a year old and that's only if the company accounts have been submitted on time.

 

It's also very easy for accountants to present figures in such a way that can make a company look very good when that's not always the case. So like you say an accountant needs to do the checking, but even he might not find a problem when one exists.

 

I still say the last customer of the last boat built are the priority persons to speak to preferably followed by the two previous to that. or speak to a customer who has a boat currently being built there. Generally any company is only as good as it's last job.

 

Be very wary if any boat builder diverts you away from something you want to look at, even another clients boat.

 

 

We were fortunate that when we visited the boat builder we eventually used, that 3 other boats were under construction in the hangers, all at different stages of construction, we were allowed to inspect all 3 and even one completely finished and ready for delivery.

Edited by Julynian
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Publicly available information on Ben Harp Narrowboats Ltd is quite illuminating.

 

In September 2009 they attempted to dissolve the company. This was objected to (it's usually by a creditor which could but doesn't necessarily include HMRC) and the action was suspended pending the outcome of that objection.

 

In November 2009 The striking-off action was formally discontinued by Companies House. You can't strike off a company if a creditor objects.

 

Current accounts are overdue, but in 2010 they had nothing in the bank, a net worth of minus £34k, and total liabilities well in excess of £56k.

<snip>

 

Can a business knowingly trade whilst insolvent and does this make the directors personally liable for the debits?

Edited by Helga
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Can a business knowingly trade whilst insolvent and does this make the directors personally liable for the debits?

You'd need to see the full Director's report and audited accounts before you could state that they're insolvent. To give a hypothetical example, they could have had half a million pounds worth of order book to be completed in the following 6 months.

 

Tony

 

But no, a limited company may NOT trade when knowingly insolvent and yes, not ceasing trading removes any limited liability protection from the directors.

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Can a business knowingly trade whilst insolvent and does this make the directors personally liable for the debits?

 

Spesh and I both posted further up this thread about the possibility of Wrongful Trading.

 

As I understand it (I'm not a lawyer!), a company may trade whilst insolvent and be doing nothing wrong legally, if the Directors can show that they had a reasonable expectation that by continuing to trade the company would become solvent and bills are paid as they fall due, ie trade its way out of trouble.

 

However if a company is put into liquidation, the Official Receiver or more likely, an appointed Insolvency Practitioner can decide under s214 of the Insolvency Act 1986 that the company was wrongfully trading. The IP will look at whether bills were paid as they were due, the ratio of debt to assets, whether there are outstanding debts owed to HMRC/VAT, whether the Directors increased the debts of the company knowing the debts could not be repaid and so on. Wrongful Trading is not the same as fraudulent trading and no intent to commit fraud is required.

 

The IP will also look at the general conduct of the Directors in the period up to the liquidation!

 

If the IP decides that the company has been wrongfully trading then s/he can require the Directors to pay into the insolvency from their personal assets. However, due to IP fees etc, this is an expensive course of action so an Insolvency Practitioner is unlikely to go down this road unless the Directors have substantial personal assets to make it worthwhile going after them. But it does mean that if they have been wrongfully trading and do have personal assets then the Directors lose the protection of Limited Liability status.

 

A Director can also be disqualified for up to fifteen years if their conduct warrants it.

 

 

(edited for multiple typos..)

Edited by Ellie
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