Help! My customer went bankrupt and is asking me for a refund?
Did you know that bankruptcy procedures in Germany differ compared to those in other countries? In Germany, it is accustomed that once a company has been declared bankrupt, the liquidator can request companies that have received payments over the previous three years to pay the amount back. This will then be distributed amongst the companies that have suffered a loss as a result of the debtor being declared bankrupt. But if you’ve fulfilled your contractual agreement, should this rule apply to your company?
This is exactly what happened to a pharmaceutical company in the Netherlands. Our client supplied goods to a German wholesaler, who had also paid for the drugs according to the agreements. A few months later, however, our client was contacted by the German liquidator, indicating that the German company had been declared bankrupt.
Our client was to return the amount they had received for the delivered drugs, with a value of up to €30.000,-. All payments that the debtor had completed over the past three years were to be collected and evenly distributed amongst the creditors. Ultimately this would mean a loss for the Dutch pharmaceutical company.
The Dutch client reached out to our lawyers and requested our help. Our team at both the Dutch and German Desk worked closely to find a solution. Eventually, we found that it was not the German law that was applicable in this case, but the Dutch law. According to Dutch law, no payment should be demanded if a debtor is declared bankrupt.
The liquidator agreed with our reasoning and withdrew their demand for the payment. The client was only charged for 2 hours’ worth of work, which amounted to a total amount of €225,- for our hourly rate. This was a huge relief to our client, who otherwise would have had to pay €30.000,- to the liquidator.
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Hiring a debt recovery lawyer does not mean that litigation is the only way to recover your payment. We consider each available option that will benefit you the most. Has your debtor left you in a similar position? Then contact us today to find out what we can do for you.