The courts call it preferential payments

Back when I was still selling to the auto industry I had a company I sold stampings too They were into us for $400,000 so I worked out a plan with them to pay us $25,000 a week, plus the cost of whatever we shipped that week until they were caught up. I stopped and picked up the checks every week for three weeks. On the forth week they told me that they could not pay me and that I was getting a letter about why the next week. Well the letter was about a meeting with all creditors to talk about this company getting ready for a banko. I attended the meeting and we went into negotiations (They owed 15 suppliers a total of 27 million dollars) well the company ultimately went banko. Soon I got the call from the bankruptcy court stating that they wanted the $75,000 I had collected even though they were still into us for over $300,000. I was told it was considered preferential payment and they demanded it back. We had to pay the money back to the court :(

Jason I thought that might be you, do you still have the PP, if so I hope you bring it to Lake Erie this year, seems like we have not be able to finish a run with you yet

Look it up, Boatme posted the name I couldn't remember "preferential treatment". My reaction was a little more antimated than yours!!!.......and I hope there weren't any customers in the building a the time!!!

Trust me when i heard this i was plenty animated

There is just no way to show me jumping up and down and screaming on the internet LOL

I thought that was a MI law or a state by state thing, but it also happened to a friend of mine that was in the filtration business. I know he was trying fight it because he was a distributor and he sold the goods at a very small margin and most of the money the belly up company paid him was paid to the manufacturer of the filters. I will have to ask him how it panned out because it was over $50,000.00 The reason for the law is that companies that knew they were going under would often pay friends or shell type companies where they could get a lot of the money back after the bankrupcy was completed. With so many businesses going under in MI I can imagine that a lot of companies have incurred this and probably from more than one company. I recenly left my salary and small comission job to become an independent rep, many people said I should be a reseller instead of working on comission. This is one of the reasons I will not do it. If I sell $10,000.00 worth of filters I get paid $1,000.00 if i bought and resold them, I could possibly get a bit more, but then I would be on the hook for collecting the money to pay the supplier, if my customer went belly up, it would all be on me. It's a shame really, every business buys from at least some small mom and pop shops so you wonder how they could survive when they get stuck like this.

Well it has happened Mike Mclown has lost his mind. Today I get a call from his lawyer telling me Mike wants to sue me for the interior you know the 8K-10K-12K deal. I tell his lawyer bring it on as I will counter for the work on his Chevelle, 5 years of hoist storage and an open bill on his delivery truck. He owes me but I already know that well has run dry. Anyway his lawyer and I had a good laugh and agreed there was no merit to his accusations and he would not pursue it any further. I also told him about the "Donzi gone to the moon interior" that if he also had that cases I would be on the side of the defense with about 20 other people. Seams he can not make enough money taking others boaters money and not delivering product to keep his head above water now is trying to sue everybody. He should know how it works he has been sued by most of the venders, machine shops and boaters he does business with.

TO ALL OF MIKES LAWYERS GET A BIG RETAINER MIKE HAS MENTAL AND MONEY ISSUES.

UPDATE: I know this thread has gone all over the place and there are stories coming out of the woodwork about work and pricing with McCleod but I am here to report a successful completion of services. VERY LATE, but I did get my bolster skins from Mike after much discussion and delay. It was touch and go for a while, his daughter picking up and leaving with no responce to vmail or email. Someone on this board in the town Mcleod is in offered to call or stop by the office to see what the deal was. He got Mike to call me, offer a few excuses but in the end got the work done and shipped out to me. A week long project paid in full upfront turned into a 2 month ordeal.

Anyway, thanks to all of you on OSO that had info, offered advice and assisted in getting this done. Not sure I would go as far as recomending McLeod but they did finally get this job done and they look great. In reading this thread it looks like there are quite a few open issues here, I wish everyone good luck in getting them resolved. This is the first and last time I will EVER pay for anything in full upfront. Makes me wonder what the hell I was thinking in the first place!

Now, if I could just get my local interior guy off his a** to complete the install......this BS never ends I tell you...

Glad things finally worked out for you.

Yeah Donna it's me. I most likely won't make it down to Erie on the PP till the LEOPA fall run but hope to see you and Ian on st. Clair. Do the run with us to Pepper Joes for Toms birthday run:coolcowboy:

On the "preferrential payments" thing what if you tell the bankruptcy court you simply don't have the money? In Mark's case he got $75,000, what if he simply paid all of his outstanding bills with that money?

Most small businesses don't keep 75K in their checkbook so if the money is gone could you argue A. the money was indeed a legitimate debt and B. if you are forced to repay it then it puts your company in jeopardy of bankruptcy as well!