Ask HN: Client refused payment, told us to come back with lawyers
Then they stopped responding to e-mails, phone calls, you name it they ducked it.
We hired a collections agency and sent them in to pursue the matter. The collections agency came back and said they were told that the company had been sold and the agency would have to pursue the matter with the parent company. They would not name the parent company however and the agency apparently isn't able to figure out who the new parent company is and said they wanted a bunch more money to continue the case as it's gotten very complicated.
Anyone have any experience with this sort of situation? It's very frustrating. My instinct is to go complain about it publicly, but I know intellectually that won't get us our money, plus it will brand our company as whiners and losers who allowed themselves to get dicked over.
Thoughts?
However, as a matter of general experience, I can tell you that, generally speaking, a company cannot rid itself of its obligations (liabilities) simply by selling itself to another company. Things like the type of entity of the debtor company (was it a corporation? a partnership? a sole proprietorship?) may determine who ultimately has to foot the bill, as well as the structure of the sale (e.g. the acquiror may have merged the target company into itself, which generally means it assumes the target company's liabilities; or the acquiror may have purchased only the target company's assets, leaving the liabilities behind with the company). These are questions your lawyer can help you figure out.
Independently of the question of liability, however, when a creditor has sufficient evidence to establish that it is owed a debt by someone, the burden generally shifts to that someone (to the alleged debtor) to show that he's free and clear of debt.
Bottomline: I would consult an attorney, and show him your correspondences with the company, including the correspondences with the purported acquiror. He will then decide against whom you should pursue your claim.
http://vimeo.com/22053820 - Mike Monteiro - Fuck you, pay me!
You're probably gonna take it on the chin, but here are a couple options:
You can get around half through small claims courts, which won't cost you a lot.
Find a sole proprietor attorney, preferably a young one, and see if they'll take it on contingency.
Let the company know you'll be hitting their DnB and then do it. Same with the BBB, trade organizations, etc.
This is exactly why the judicial system exits -- as alternative to shooting up your enemy's village for example.
Edited to add: Having a non paying client is a problem that will affect most freelance developers at some point. It won't appear as whining but best not to name and shame. It could prejudice your case if you go to court. Speak to a lawyer.
If someone tells you they'll give you a $10,000 to do or say something ridiculous (eat a week old pizza, drink milk through your nose, etc), you can't sue them when they don't deliver; They aren't on the hook for $10,000.
This depends on both what the payment is for, and which US jurisdiction's law binds. There are circumstances in California, e.g., for which there is a $5,000 limit -- and circumstances for which there is a $100,000 limit.
Which is one reason why you should go to a lawyer.
Unless you have something in place, it's probably not worth much a legal action. Maybe some threatening phone calls, and letters from a lawyer. If they are BIG they will attempt to drive you to the ground.
Watch the video posted from Mule Design and take this as a hard lesson learned.
Secondly get on with working with your paying clients and spend the least amount of time as you can in debt recovery. Let your lawyer defend your T's & C's, (hopefully they also wrote them for you) so you don't turn a 12k loss into a 24k loss.