Insolvency question 1
I was a director of a company 1
I was not employed by the company 1
The business was not going well
I commissioned at my own expense a new solution for company 1 (this was a software solution)
I licensed it to company 1, but this was not contracted, it was informal, the company managed to get about 75 clients with the new solution
Company 1 still failed
A liquidator was appointed
I was asked to resign as a director of company 1, which I did
The organisation that developed the solution decided to go direct in the market and appointed me to run it (after resigning as a direct of company 1)
The MD of the solution provider wrote to all the clients and informed them that ties company 1 were severed and that they needed to deal directly with his new organisation run by me
The papers relating to company 1 liquidation were lodged
Later I emailed the entire client base advising them it was time to re-new and that they should deal directly with the new company
Have I done anything wrong?
Note, I do not believe company 1 could be sold on as an ongoing concern as they had lost all access to the software solution
I was a director of a company 1
I was not employed by the company 1
The business was not going well
I commissioned at my own expense a new solution for company 1 (this was a software solution)
I licensed it to company 1, but this was not contracted, it was informal, the company managed to get about 75 clients with the new solution
Company 1 still failed
A liquidator was appointed
I was asked to resign as a director of company 1, which I did
The organisation that developed the solution decided to go direct in the market and appointed me to run it (after resigning as a direct of company 1)
The MD of the solution provider wrote to all the clients and informed them that ties company 1 were severed and that they needed to deal directly with his new organisation run by me
The papers relating to company 1 liquidation were lodged
Later I emailed the entire client base advising them it was time to re-new and that they should deal directly with the new company
Have I done anything wrong?
Note, I do not believe company 1 could be sold on as an ongoing concern as they had lost all access to the software solution
From Stuart J
Wednesday, November 05, 2014 12:46 PM (GMT+1)
Thank you for the question. It is my pleasure to help you with this today. Please bear with me if I ask for more information.
Can we have the background to what is happening with company one please because that appears to be missing?
Who is claiming what from you and what is it that you don't like?
We need as much background detail as possible please. Thank you
I replied
Wednesday, November 05, 2014 1:00 PM(GMT+1)
Company 1 is being liquidated with creditors, if my opinion means anything I feel it was unnecessary. It was driven by an unspoken personal conflict that I knew nothing about until I found out my co-director had set up another business in competition to company 1. By then the company was on its knees and I was unable to do anything about it in time.
I appointed the director to run the company as I WAS semi-retired (not now) and live in Spain
I have no claims from anybody yet. However clients of company 1 were sent an email by the liquidator:
"Dear Sirs,
Equality Accreditation Services Limited (Company Number 07077794) in Creditors Voluntary Liquidation
I write to advise you that the above mentioned Company was placed in to Creditors Voluntary Liquidation on 28 October 2014 and I was appointed liquidator the same day. I enclose a copy of my Certificate of Appointment for your information.
It has been drawn to the Liquidator’s attention that several customers have been contacted in relation to annual reviews of the services provided to them by the Company. This correspondence has not been sent by Equality Accreditation Services Limited and has not been authorised by the director of the Company. If you have received such communication, it would be greatly appreciated if you could email the Liquidator a copy of the letter/email you have received.
Please note, Innovatec AS, Innovatec UK and Innovatec are not connected with Equality Accreditation Services Limited and the link to their website from unauthorised. The Liquidator will be taking steps to have this link removed."
Note Innovatec UK was set up by Innovatec Norway to trade with their software and have been told that the clients are just as much Innovatecs as company1.
Hope this is enough
If not please let me know
Sam
From Stuart J
Wednesday, November 05, 2014 1:08 PM (GMT+1)
Thank you.
The crux of this matter appears to be the software.
You will be aware that if there is no agreement to the contrary, anything which is developed during the course of employment is the intellectual property of the employer.
If the person is self-employed and there is no agreement to the contrary, the intellectual property is the property of the developer.
You say that you were a director of the company but not employed.
Did you receive no remuneration from the company? How did you pay tax?
If you aren’t getting paid or receiving any other remuneration, what was your interest in the company?
You say that you licensed software to the company. How exactly did you do that bearing in mind you say it was informal?
I replied
Wednesday, November 05, 2014 1:23 PM(GMT+1)
I did not develop the software I simply asked Innovatec to do it
Regarding payments, I put a lot of risk capital into the business the money I got out does not reflect this, it only covers my expenses. I have close to all the initial capital back but no reward for the risk.
As a result of a long standing friendship Innovatec they agreed to help me personally out.
They have received no payments for their work. However, in the interests of decency I have contracted to re-pay them by November 2017 (no interest)...this is about £120,000
Regarding license I simply let company 1 use it. To be honest no one knew if it would make a difference or not...so we were kind of flying a kite if it worked great, if not, back to the drawing board. As it seemed to work we was in the process of drawing up a license agreement, but events took over.
From Stuart J
Wednesday, November 05, 2014 1:48 PM (GMT+1)
Thank you. That really helps. In this case, the IP belongs to Innovatec because it appears that is it was done for you is and you then subsequently let company 1 use it. There was no consideration for that and no formal agreement it seems.
You ask whether you have done anything wrong. I don’t whether that relates to the software or the database but with regard to the software, I cannot see anything wrong whatsoever.
With regard to the database, the database itself belongs to the company 1. However the information contained in the database is public domain. It is the list of details which belongs to company 1 as opposed to the details themselves. It’s a difficult thing to get your head round.
I will explain it a slightly different way and that is that the list of all the names and addresses belongs to company 1 and you are not entitled to use that list. If however you can remember all the names and addresses, there is no intellectual property in that and you are free to use them so whether you have done anything wrong or not comes down to where you got those names and addresses from..
The company is in liquidation and has no money and it is highly likely that the liquidator will not want to spend money on litigation is although will obviously fire a few snotty letter is off in order to justify his extortionate thing.
I haven’t seen the letter that you sent out so don’t know exactly how you worded it when you said that these customers should now deal directly with the new company. what you have done here is in 3rd it seems (and that is what the liquidator is saying) that there is some kind of association between the old company and the new company and that is why they should move their allegiance. Okay, you shouldn’t have done it in those terms and you should not have actually mentioned the old company but it’s happened and it’s something that you’re going to have to deal with. Either the chances of you been taken to task over it are remote for the reasons I mentioned earlier.
Does that answer the question?
Can I answer any specific points arising?
You replied
Wednesday, November 05, 2014 2:02 PM (GMT+1)
Hi Stuart I like your work
The list is publish on a website were the clients advertise / project their equality status for buyers to select from. Anyone could take that list.
Content of first email from group MD:
It is with personal regret that Innovatec Group must remove support for Equality Accreditation Services Ltd. Which we are told is in, or shortly will be in liquidation. In the light of this information we have taken the decision to increase our involvement in providing on-line equality and diversity accreditations services and have decided to face the market directly rather than through 3rd parties. This will be done through our UK subsidiary – Innovatec Ltd which we will continue the tradition for excellent service, deep expertise, and an environment our clients and associates want to be a part of. Things that will not change:
1. With the exception of Vivienne Duke, you will continue to work with the same people you have in the past
2. Sam Allan will lead Innovatec Ltd
3. Innovatec Ltd will honour all client commitments with regard to on-line accreditation's.
4. The highly competitive fee structure will not change
5. The online services provided to you in the past will continue to be offered by Innovatec
The Innovatec Group will be contributing financial stability and broad technical expertise to the UK Company. If you have any questions about this exciting news, and what it will mean for you please contact Sam Allan at any time.
Content of email from me sent months later:
Dear *|FNAME|*, I hope that your company is enjoying the benefits of its hard-earned Equality Accreditation. As indicated at the time of issue of your accreditation there is a requirement to perform an annual monitoring of your generic equality standards.
• This is not an onerous task and only involves one-fifth of the original accredited staff count.
• The annual monitoring charge also equals one-fifth of our initial fee: £*|NEWPRICE|*. This is to sustain your existing status and assumes nothing has changed and you do not plan for improvement.
• In return you will receive an endorsement to your accreditation and a report to provide to your clients.
Please feel free to contact us to discuss this transaction by emailing *****@******.*** or just click "reply." I can also be contacted on the numbers below. Thanks again for being a valued customer. Remember that we're always glad to answer any questions you may have. If you need assistance with completing the on-line monitoring, just ask me or Jim Russell *****@******.*** for advice. I also want to remind you about an important change. We've been forced to end our partnership with Equality Accreditation Services Ltd, so you'll be dealing with Innovatec Ltd. from now on. Aside from Vivienne Duke, the same people will handle your accreditation endorsements and reports.
FromStuart J
Wednesday, November 05, 2014 2:08 PM(GMT+1)
Thank you. That is most kind.
If the list is published on the website, then you have done nothing wrong by using the list.
I think the wording of the letter from Innovatec and the wording of your email is a bit close to the knuckle and would lead anyone to believe that the new company had taken over the assets of the old company.
However I still think the chances of you being taken to task over it are remote because the liquidator will not be able to find a whole load of money to tie up in litigation out of midair