An insolvent company owes me money, can I lay a charge of theft against the director?

Fraoch1993

New Member
Joined
Jun 3, 2020
Messages
3
A company I did business with a couple of years ago owes me money still. The company has now gone into liquidation. Can I lay criminal charges of theft against the director of the company (small business) or do I have to go the route of suing him?
 

WAslayer

Expert Member
Joined
May 13, 2011
Messages
4,613
Why are you posting twice..?

It does not sound like any theft took place here, so not sure why you want to lay a charge of theft..

If they are going into liquidation, there will be an opportunity for people who are owed money by the company to say so..
 

Ares1000101

Senior Member
Joined
Jun 6, 2011
Messages
524
Speak to liquidators and give proof of what you're owed. When they liquidate, they will pay you however many cents to the rand, if any at all.
 

Fraoch1993

New Member
Joined
Jun 3, 2020
Messages
3
Why are you posting twice..?

It does not sound like any theft took place here, so not sure why you want to lay a charge of theft..

If they are going into liquidation, there will be an opportunity for people who are owed money by the company to say so..
It was an error, my apologies.

The company in question has ignored all letters of demand thus far, and I was wondering if it was an option to lay charges. I will contact the liquidators and find out from them. If the company has no assets, and I don't get my money back, does that mean I will then lose the money owed?
 

backstreetboy

Honorary Master
Joined
Jun 15, 2011
Messages
17,127
It was an error, my apologies.

The company in question has ignored all letters of demand thus far, and I was wondering if it was an option to lay charges. I will contact the liquidators and find out from them. If the company has no assets, and I don't get my money back, does that mean I will then lose the money owed?
 

WAslayer

Expert Member
Joined
May 13, 2011
Messages
4,613
It was an error, my apologies.

The company in question has ignored all letters of demand thus far, and I was wondering if it was an option to lay charges. I will contact the liquidators and find out from them. If the company has no assets, and I don't get my money back, does that mean I will then lose the money owed?
Afraid so...
 

WaxLyrical

Honorary Master
Joined
Oct 20, 2011
Messages
21,067
Couple of years?

Good luck with that.

Cheapest option is to hire some township mapoisas and strong arm him into paying.
 
Joined
Dec 20, 2019
Messages
23
A company I did business with a couple of years ago owes me money still. The company has now gone into liquidation. Can I lay criminal charges of theft against the director of the company (small business) or do I have to go the route of suing him?
You can lay criminal charges, but nothing will come of it, since the company is now under liquidation. You must lay a claim with the liquidator for payment of any monies owed to you. Read up on my previous posts on this forum as I am a practicing liquidator, my posts might answer some of the questions you might have. Should you wish for more in depth response, you can inbox me.
 

Arthur

Honorary Master
Joined
Aug 7, 2003
Messages
25,045
No. You cannot lay a charge of theft. Failure to pay a debt arising from a contract is a civil matter.

Theft is a criminal matter and therefore requires specific intent, ie you will have to provide strong evidence that the other party never intended to pay and always intended to wrongfully appropriate the goods. If you willingly delivered the good/service then no theft occurred. Trying to lay a charge of theft mighty even be seen as vexatious.
 
Last edited:

chrisc

Executive Member
Joined
Aug 14, 2008
Messages
8,411
You should be careful about submitting a claim with liquidators, unless you are absolutely sure of a positive outcome.

Should there be insufficient money to wind up the business, claimants can be compelled to contribute to any loss.

I nearly got caught like this in 1999 when a stage company stopped paying. I was about to submit a claim for R22k when I had a call from a friend at a bank. Their liabilities were 9 times the assets. There would have been a substantial contribution
 

Fraoch1993

New Member
Joined
Jun 3, 2020
Messages
3
You should be careful about submitting a claim with liquidators, unless you are absolutely sure of a positive outcome.

Should there be insufficient money to wind up the business, claimants can be compelled to contribute to any loss.

I nearly got caught like this in 1999 when a stage company stopped paying. I was about to submit a claim for R22k when I had a call from a friend at a bank. Their liabilities were 9 times the assets. There would have been a substantial contribution
I am sure that the outcome will not be positive for me. From what I hear, the company has no assets, therefore going into liquidation means I won't get any of the money owed to me.
 

chrisc

Executive Member
Joined
Aug 14, 2008
Messages
8,411
That unfortunately occurs 95% of the time

Many managers leave it too late to go into business rescue. A shining exception was British Home Stores
 

buyeye

Expert Member
Joined
Nov 28, 2010
Messages
4,844
You should be careful about submitting a claim with liquidators, unless you are absolutely sure of a positive outcome.

Should there be insufficient money to wind up the business, claimants can be compelled to contribute to any loss.

I nearly got caught like this in 1999 when a stage company stopped paying. I was about to submit a claim for R22k when I had a call from a friend at a bank. Their liabilities were 9 times the assets. There would have been a substantial contribution
How does that work?
 

chrisc

Executive Member
Joined
Aug 14, 2008
Messages
8,411
You get a statement from the liquidators. If there is a negative balance, your share is calculated in proportion to your claim to remaining assets (if any) and total value of all claims

Your claim - R10 000
Total claims - R200 000
Cost of liquidation R4000 (net cost)
Your share - 1/20th - R200
 
Joined
Dec 20, 2019
Messages
23
How does that work?
Upon liquidation, there are administration costs involved, and these administration costs must be paid before any creditors can be paid. So if these administration costs incurred by the liquidators during the administration are not covered by the monies recovered from assets sales, then the creditor who applied for the liquidation will have to pay the administration costs or the creditors who prove the claims at the meetings, especially the secured creditors. It is best to wait for the second meeting of creditors report into the affairs of the company to find out if a dividend is payable before you can submit your claim.
 
Joined
Dec 20, 2019
Messages
23
I am sure that the outcome will not be positive for me. From what I hear, the company has no assets, therefore going into liquidation means I won't get any of the money owed to me.
A liquidator/creditor can hold the director personally liable without limit for the payment of the companies debts, even if the company has no assets. We can sequestrate any one who misappropriated the companies assets. In this way the director's assets in his personal capacity are sold to pay the companies debts.
 

maumau

Honorary Master
Joined
Aug 13, 2009
Messages
15,258
A liquidator/creditor can hold the director personally liable without limit for the payment of the companies debts, even if the company has no assets. We can sequestrate any one who misappropriated the companies assets. In this way the director's assets in his personal capacity are sold to pay the companies debts.
Doesn't that only happen if the director/s have signed surety?
 
Joined
Dec 20, 2019
Messages
23
Doesn't that only happen if the director/s have signed surety?
No, we can hold directors personally liable if is found that the business was run recklessly, with the intention to defraud anyone, or directors are found to be delinquent, or the director has misapplied or retained any property of the company, breach of faith in executing their duties as directors, etc. We hold enquiries to uncover the dealings of the company in question prior the liquidation and subpoena people of interest.
 

maumau

Honorary Master
Joined
Aug 13, 2009
Messages
15,258
No, we can hold directors personally liable if is found that the business was run recklessly, with the intention to defraud anyone, or directors are found to be delinquent, or the director has misapplied or retained any property of the company, breach of faith in executing their duties as directors, etc. We hold enquiries to uncover the dealings of the company in question prior the liquidation and subpoena people of interest.
Interesting, thanks for the info.
 

TEXTILE GUY

Honorary Master
Joined
Oct 4, 2012
Messages
10,831
A liquidator/creditor can hold the director personally liable without limit for the payment of the companies debts, even if the company has no assets. We can sequestrate any one who misappropriated the companies assets. In this way the director's assets in his personal capacity are sold to pay the companies debts.
Just asking -
This covered in the companies act.
AFAIK, unless the director acted negligently - in other words, didnt follow what is prescribed as directors duties in the act, and if this has been determined by the BRP or liquidator in the event of liquidation
 
Top