Burned!!!

[Steve@Reliance]

I need to vent because I just lost 10K. One of our customers has gone bankrupt and we won't see a penny. I have been dealing with this customer for about 8 years on and off and they always paid slowly and always were the first to complain if you were an hour late or any other problem. I suppose I put up with it because the owners have been personal friends of mine since the 80's. You know, they owe you money but you hate to pester them because your buddies with them. You know you shouldn't but you let it slide. This is the first time I have taken a real hit as far as not getting paid, so I guess this is a bit of a wakeup call and I am going to be a lot more rigid as far as collecting outstanding invoices. I was reluctant to even do the job, but they fed me a big song and dance about this "Big Project" they were doing. Everything will be great and we will pay in 15 days. I didn't get anything!!
I went to the auction and it looks like they had cleaned the place out pretty much as far as hiding equipment. I got the notice from the trustee and I got off easy I guess. Milton is a small town of 50,000 people so all of the shops that are involved in metalworking, Machining/Welding/Fabricating, know each other and in some way. Two other shops I know/work with lost 38K and 54K each. The total supplier liabilities were over 500K. Rumor has it the owner was diverting money out of the company but that can't be proven. Something dosen't seem to add up, that I am sure of. Maybe I'm just bitter Anyway, for any of you that have customers that are owing you money, get on it and get paid. I hope at least I can put a bug in someone's ear and keep them from having the same experience as me :frown:

[tsutt]

I'd say the guy is in serious need of lead poisoning!!!! Todd

[ynneb]

A method I have used to protect myself is to get progressivly paid.

Once you have bought the materials for the job, do nothing more until you have been paid for that part.

Depending on the size of the job, release the work as you go, and make sure you get paid COD.

If the company you are doing the work for does not like this plan, then it should give some sort of indication that they are not fully confident in thier ability to pay, and are treating your company as a place for getting an unoficial loan.

I feel for you, I lost 30 k on a bussiness venture once, and it really hurt even though I was the main person to blame. Life is too short to get bogged down in those pits. Pick up, dust off, and march on. Though it hurts, its not the end of the world.

[DareBee]

Working for large companies (such as Magna) can really get a guy burnt as well.
You jump through hoops for them, and make all the changes they want, then the plant manager you worked for is busy and can't see you and doesnt revise the PO, next thing you know they have switched managers and you start all over again, I have heard from others that this is an unwritten business policy of theirs to stick it to the "little guy", because we can't afford to fight their lawyers.
I got hit for $40,000 from a profitable company that makes millions a year.
I am done now - later.

[NC Cams]

See what the laws are regarding mechanics liens in your state. You can sometimes go after personal assets via this method. How so??? FRAUD can pierce the shield of corporate bankruptcy.

If fraud can be proven, the individual loses the protection of the corporate shield and you can go after personal assets. If the person diverted or improperly converted corporate funds into personal assets, he's gotten himself into some real trouble. If the person colluded with someone else to shield equipment by moving it elsewheres, THEY and those who helpd could be held as an accompolice.

In a small town, SOMEBODY had to know something - NOBODY can pull off the move of a shop without somebody knowing/seeing something. Especially if somebody helped them move the stuff. If the rumors are correct, somebody knows where the stuff went/is. They'll sing with the proper pressure (subpoena's issued as part of law suits send chills up people's spines).

Cartage companies would/should have shipping records. You'd be surprised how fast they'll give up information when lawyers start to sniff around. The shipping company or perhaps the truck drivers can at least tell you where the booty got shipped. You can move on from there. As the shipper, they unwittingly colluded to help the guy defraud you and others so they can be drug in.

If the guy dumped assets and stripped off money, the court should be able to void the sale and return the assets so that more is recoverable by the creditors. Even if you don't get much if any more in the way of cash, you may STOP the guy from making off with stuff that he really shouldn't be entitled to hide/steal/abscond with.

At this point, you may not be able to collect a dime. However, you may be able to tie the guy up from doing anything for some time if you can apply liens or other pressures. You might even find that money may come your way to make you "go away" as far as making further trouble for the guy.

BTW, the guy is NOT your friend - friends don't do that to each other. At this point, it is simply business and the law. Do what you can to get what you can. Partner up with the other creditors - a united effort may be more effective and more efficient.

EDIT: Check out the thread on this M/B about the Haas v IRS issue. The thread shows how the siphoning off funds/assets can get you into lots of trouble with lots of people. If somebody siphoned off $500K, it has to have gone SOMEWHERE and somehow it should be traceable.

I bet if you squeeze the right shoes, somebody will squeal.

[Steve@Reliance]

I used to envy some of my business peers because they seemed to be "hardasses" when it came to getting paid. I wondered why I could'nt seem to be as aggressive as these guys. This deal has given me a very different outlook towards dealing with getting paid. I guess you have to get screwed to get tough. Thanks NC Cams for the info on going after these guys. If they are in the wrong, I am going to do as much as I can to stick it to them.

[lakeside]

you first mistake was that you felt because you knew the guy he would not screw you Freind and family wil be the first ones to stick it to you all the time COD only is the way I work regradless of the job

[tobyaxis]

Do all my work COD. No $$$ No Parts. Don't want to hear Customer BS. Did a job for someone after a P.O. was recieved and when completed he told me he gave it to someone else. At first I took a loss, then someone (His Customer) contacted me to do the job. He was pleased with my quote and ordered more than the original guy did. Now the jerk that stiffed me lost a customer, and I gained one. Believe me when I tell you Steve@Reliance, it willl come back to them. Just as LakeSide said, Familly and Friends are the first to stick it to you, so the same goes for your Customers. Just ask them one question,"Can you go to the store and hand them an I Owe You". No, so what makes this any Different, Nothing. You make Parts, You get paid.

I feel for ya man, and sorry you got screwed, just do business differently for your future.

[miljnor]

Ive been hung out to dry 3 times and all three times I have collected the money. Once (the first time) the customer hung me out be forgot he loaned me a collet chuck to do the job (he didn't get it back, been using it ever since). Next time when to a collection agency lost about 15% of that one on fees but I got the other 85%. The last one was for a company that I was renting a building from, It got complicated as they were renting the building from someone else and subleting to me, but in the end I ended up making money on that deal. As their company went BK and I was not paying rent for more months then then what they owed me.

COD is one way to go but alot of companies wont even talk to you if you don't give them net 30. Which in alot of cases turns into a net 60. All business is a risk, so you have to decide on which ones to take. I made it a policy to never take in more that 20% of my jobs on any kind of terms. That way you have a less likely chance of BK when one of them screws you (and they will screw you, you can bank on it).

And don't think you can't get screwed on a COD either. I have yet to meet someone that will pay in CASH its always a check and they bounce. I had one of those and the guy was honest enough to make payments when he got into hot water. It help that I was willing to make parts (on cod of course) after the mess up as long as I got a little of the backpay each time.

Sometimes you have two choices take the net 30 or close your doors. So you have to be the judge of what your willing to do. In my begining years I figured either way was a BK, so I might as well take the risk on the net 30 guys. It payed off for me but most business go down in flames the 1st year and the other's don't usually make it past 5.

It seams like if you work hard enough or are smart enough you can make it work. but in reality its all a roll of the dice, right place right time.

Then again aint it always?

[dertsap]

if the guy was your bud maybe you should take him out for a drink in T.O then take him up the CN tower and watch him fall a mile down , won t get your money back but it might make you feel better