Legal Advice

[beemer2005]

Say you are in business and sell products on credit. Company A, your customer for many years, suddenly declares bankruptcy.
They'd been buying from you (on credit) up until a week before.

Can this be deemed as "intent to defraud" and can I take legal action?

[CSR]

Say you are in business and sell products on credit. Company A, your customer for many years, suddenly declares bankruptcy.
They'd been buying from you (on credit) up until a week before.

Can this be deemed as "intent to defraud" and can I take legal action?

Speaking from a reg. joes Point of view.. i would say no..

[Adrian Lankosz]

I think best to talk to lawyer if you can find someone who will consult for free, but I think you might be able to claim something if they have some properity that court decides to release to repay depts.

But again I'm no expert.

[Ojam]

1.) Unpaid suppliers (you I would assume) are entitled to reclaim goods supplied to the bankrupt business if the goods are recognizable in inventory, and were delivered within 30days preceding the bankruptcy. If it is food, such as if you are a farmer then it is 15 days, and you are entitled to special-priority security interest on the inventory.

2.) As a general rule there will be investigations conducted by an official receiver, under the supervision of the superintendent of bankruptcy, these are to determine the cause of the bankruptcy and in a case where fraud is suspected they will determine that and investigate it as well.

3.) As a creditor, it should be expected that you might run into bad debt sometimes, it happens. If you did a credit check and the statements that you were shown were wrong, then that would be fraudulent misrep. And you would have something, but just the simple matter of it being within a week, doesn't mean that it will be determined to be fraud right off the bat, the investigation will determine that though.