Ex employer owes money, demands apology from me

[eleve82]

Need some impartial advice. I worked at a startup last year and left them in May. It offered to pay a % of my sales and a fixed salary for the final month. Prior to leaving, the company needed to plug some cash flows for a few months and as I had faith in the company's prospects, I made a personal loan of a few thousand.

 

Now, when I left, I found that despite having chased up several times with the founder, who each time said I would get paid by the next day, I did not actually receive anything. After chasing back and forth a few times with the founder and finance director, who each time did not make good on their words or explain clearly to me what was going on, I finally gave up and reached out to a director on the board to help me resolve the issue, more than a month late.

 

I started to get very worried about the loan amount coming due later this year.

 

I knew that my client was due to make payment soon so I asked an ex colleague of mine to keep tabs. As expected, neither the founder nor finance director took any initiative to inform me that payment had been made and whether my commission would be due. Finally, I requested for the director to follow up for me again. The excuse that came back was that they had no cash to pay me, despite having expanded by 5 employees within months. In my communication with my ex colleague, who had shared his concerns with me before about payments, I told him that as he was currently working as an unpaid intern, that if he was relying solely on this company for a salaried job in a few months, he should keep his options open in case it didn't work out.

 

Meanwhile, no repayment plan has been proposed by the company, I have not pushed for immediate payment yet.

 

Yesterday I get an email from the founder telling me that I've been spreading ill will with his employees. He demanded an apology from me for telling my ex-colleague to "watch out" and keep his options open. He also claimed that I was making things worse while "everyone else was trying to resolve this". Obviously my friend breached my trust for whatever reason by relaying this personal advice to the founder as he thought he was helping me put my case forward (which I did not request for). The founder told me that I was not at all acting in the best interest of the company and no matter how frustrated I was, it was my fault for creating doubts in his employee's mind about his ability to hire him.

 

Now,

 

A) Does it make sense for an ex employee to apologise to a company that owes several thousand dollars outstanding for making an objective statement to an ex colleague that he should be cautious IN CASE the company can't pay? I did not malign or slander anyone.

 

B) What kind of "loyalty" do I owe to a company that has been consistently late and delinquent in keeping me updated about money due?

 

C) Given I have been accused of "making things worse", clearly, not pressing for immediate payment appears to have been taken for granted. The company appears to have funds to pay for current employees but is telling me they have problems meeting my (rather trivial) payment due, claiming it will sink the company. In fact, being a creditor has turned out to be a weapon that the founder waves at me, saying that it is in my best interest to hope the company succeeds and not to press for immediate repayment (otherwise I get nothing back).

 

Majority of my circle have told me to push for immediate repayment given the kind of treatment and response I have received. However, I'm not sure that this will help ensure repayment on the money due.

 

Many thanks for your thoughts guys.

[Balzac]

Is this a USA company ??

[eleve82]

Nio.. UK company. Any thoughts, Balzac?

[Balzac]

Barrister is worth an initial meeting. This may be a contract issue.

[eleve82]

Unfortunately, the terms of my commission are not written on a formal agreement, only my loan agreement is fully laid out.

[HokeyReligions]

Sounds like you can kiss your commission goodbye but have legal grounds to get your loan back.

[Radu]

I can't advise you on the legal aspects [there are some ppl who know UK law on this board though], but i can tell you that they have absolutely no intention of paying you, and the CEO is trying to bully you out of the debt they owe you.

 

Also, generally speaking ... being a creditor gives you lots of power, don't let them trick you into believing that you don't have it.

[pink_sugar]

Yikes, you should never have given the company a dime....companies pay you, not the other way around. Not sure about the labor laws in regards to commission, but since there is no paper trail of the agreement, that may be a lost case. I believe most companies are supposed to provide a minimum wage in addition to commission unless you are an independent contractor or something. However, you should be able to recoup the loan you gave them if you take them to court. Most employers will pay up before having to go to court...definitely get them served though. And make sure from now on to DOCUMENT EVERYTHING! Do not work for someone who won't give you paperwork regarding compensation! Hope that helps!

Edited July 21, 2013 by pink_sugar

[CC12]

A) Does it make sense for an ex employee to apologise to a company that owes several thousand dollars outstanding for making an objective statement to an ex colleague that he should be cautious IN CASE the company can't pay? I did not malign or slander anyone.

 

No, it doesn't make sense. He's being a giant baby. Don't respond in any way to his demand for an apology. Not even to tell your side or explain yourself.

 

B) What kind of "loyalty" do I owe to a company that has been consistently late and delinquent in keeping me updated about money due?

 

You owe them no loyalty, just basic professional courtesy, like not speaking poorly of them. Oops. Oh well, it's not a big deal, you were having what you thought was a private conversation, and you didn't say anything that bad anyway. Actually, you told the truth - that the company was having trouble paying its debts. And then you offered some career advice.

 

C) Given I have been accused of "making things worse", clearly, not pressing for immediate payment appears to have been taken for granted. The company appears to have funds to pay for current employees but is telling me they have problems meeting my (rather trivial) payment due, claiming it will sink the company. In fact, being a creditor has turned out to be a weapon that the founder waves at me, saying that it is in my best interest to hope the company succeeds and not to press for immediate repayment (otherwise I get nothing back).

 

If you're not pressing for immediate payment, I'm not sure what you're contacting them for? Are you calling and basically saying, "Hey guys, when can you pay me?" Their answer has boiled down to "We can't." Which is probably a truthful answer. Gaining five new employees doesn't necessarily mean they're all living high on the hog.

 

They probably owe a lot of people money. They're going to pay their rent, their utilities, their vendors, etc before they pay you. Those are necessary expenses to keep their business open, and those agencies are demanding immediate payment. You're not. And you're not even really pressuring them to pay you. So of course you're not going to be high on their list of priorities.

 

What does your loan agreement say? Is there a payment schedule or a final date that the loan is to be repaid?

 

Just wondering - were the founders of this company your personal friends? Is that how you found yourself working for them and lending them money?

[Radu]

They probably owe a lot of people money. They're going to pay their rent, their utilities, their vendors, etc before they pay you. Those are necessary expenses to keep their business open, and those agencies are demanding immediate payment. You're not. And you're not even really pressuring them to pay you. So of course you're not going to be high on their list of priorities.

 

What does your loan agreement say? Is there a payment schedule or a final date that the loan is to be repaid?

 

Just wondering - were the founders of this company your personal friends? Is that how you found yourself working for them and lending them money?

 

Good point, if they are in this situation they probably have a single strategy and that is to defer or scare away as many creditors as possible.

In cases like these, you want to get your money right away [if it's not a big enough sum that you will cause the company to go belly up], you need to stress them a little bit.

This way, they will put you in the cathegory of ppl they know they have to pay right away.

 

By the time you face them in court [or mediation or whatever ... ] don't even dare to write back something about his accusations ... that's a hook, and if you fall for it you will spend a lot of time and resources pointlessly.

[FitChick]

Do they own any property that would be worth the loan amount? Like one of their cars? Office equipment? Take that instead.

[eleve82]

Guys thank you all for your advice. Just an update - I had not responded to his demand for an apology over a week ago but simply liaised with someone else internally to negotiate for payment. I had assumed the founder realised he had overreacted and would not pursue this trivial issue. While waiting for confirmation that I would get repaid in instalments over one year, I was told that the founder still wanted an apology before he would pay me a dime.

 

All this, despite owing me several thousand dollars, months late, while i had agreed to a delayed repayment schedule which only benefitted the company, not me. Suffice to say, I saw his true colours there and then. Radu, you are right - he is a bully. I couldn't believe it at first but it's evidently clear now. I will never deal with him again.

 

I spoke to a few people all of who advised me this was not only "illegal", this was immoral. However, for the sake of the well being of others still working there who are innocent to this, I did not want to threaten legal action just yet. I wrote an email to apologise for any misinterpretation based upon the advice of someone I respected, as a first resort. Of course, I had deep misgivings about whether I was enabling him to behave like a dictator and wanted it to be abundantly clear to everyone he was stalling without excuse (by removing his excuse that I did not apologise). I made it clear that to minimise any future interactions, it would be in everyone's best interest to settle all outstanding credit immediately, to prevent further grief. Following this, if my polite request is ignored, I will seek legal recourse. Since I am asked to apologise for stating that they have cash flow problems, I'm happy to be proven wrong about their ability to pay me back ASAP.

 

Frankly, I am dismayed and very disappointed in this behaviour. I thought the founder was inexperienced and very opinionated but I did not expect him to stoop to such underhand means to impose his will on his friend and colleagues. Whether or not he felt I was "wrong", he has no right to withhold payment from me to force me to do what he wants. Obviously from now onwards, I will ensure that every single payment is documented clearly and will not trust people so easily now. Less than 2 days ago I was still sending leads to the sales team. Never again.

 

Unfortunately, there are no assets to speak of. If anyone has any ideas on what is "legally" allowed in terms of chasing for payment, please do direct me. I have no interest in bringing down the company - I only want what is due to me and I will gladly sever all ties.

[pink_sugar]

Unfortunately, there are no assets to speak of. If anyone has any ideas on what is "legally" allowed in terms of chasing for payment, please do direct me. I have no interest in bringing down the company - I only want what is due to me and I will gladly sever all ties.

 

For many reasons, I have been hesitant to work for start-up companies. This is just one more reason to add to my list.

 

Good luck!

[Radu]

Almost 3yrs ago my dad died and we inherited a debt that was owed to him.

The owner of the company had the tactic of delaying as much as possible until the statute of limitations happened at 3yrs after it was last acknowledged.

 

Well, it didn't work on us, and we sued for recovery, and also sued to get them into bankruptcy [the company had not produced anything by then for 3-4yrs so it more than qualified for it, not to mention that it had other debts and no cashflow].

Well, we eventually gave up on the bakruptcy trial, mostly because of taxes and because we perceived the judge had decided his mind ahead of time [by way of his remarks].

Their lawyer tried to use the very same argument; that our attempt at taking back our money [a debt which the lawyer actually recognized but argued that it was too old] was hurting the image of the company.

They are nothing but lawyerish hooks, that a decent human being generally falls for; you have to remember that it is in your interest to get your money and after all ... 'if you won't fight for yourself, who will ?'.

Well, i'll spare you the other details, especially since being in the UK you have a different legal system than ours [roman law here].

 

But this is what you need to do and some of it is what we did ourselves :

- do not rely on this money; find alternatives, stop dreaming about getting it back and chuck the whole thing down as 'a lesson well learned'

- understand that most likely you will not get back the whole amount; either you will cut a deal for less, or you will need to hire a lawyer which will cut into the profits ... or if possible you could sell the debt to a debt collector [we have them over here, and those ppl are like wolves]

- after you have done the above 2 steps, and found some level of internal acceptance, find every possible lawyer who knows something about economic law and debt collection, find out if they give free 30min opinions, and ask them for their opinions

- if you will ask most lawyers about this debt, most will say that it can be collected, or will be inclined to say so because they charge you by the hour, and even if they lose, you will end up paying.

By polling in many types of opinions [here's a thought, find a teacher at law school and ask for his opinion], you will get a 'feel' for the market.

The debt being not that much, you have to be careful how much you will end up paying to recover it.

Make sure you are dressed in cheap clothes, nothing too fancy ... you want their initial opinion of you to be that of 'poor girl'.

 

I'll say it again, be very careful of this guy's mind games.

Promises are cheap [so they don't mean much], try to read his body language [lots of free stuff online, or pick up a book by Allen Pease], and be careful of blameshifting and gaslighting [he has already employed them against you].

Don't call him out on all this stuff, learn what it means, why it is that way, so that you can get to the real language, so that you can see what he is really trying to say.

[Radu]

Frankly, I am dismayed and very disappointed in this behaviour. I thought the founder was inexperienced and very opinionated but I did not expect him to stoop to such underhand means to impose his will on his friend and colleagues.

Saying over here 'you may be my brother, but the cheese has a price'.

 

Whether or not he felt I was "wrong", he has no right to withhold payment from me to force me to do what he wants.

That was blameshifting done in a business environment.

 

Obviously from now onwards, I will ensure that every single payment is documented clearly and will not trust people so easily now. Less than 2 days ago I was still sending leads to the sales team. Never again.

Bank transfers generally have a note added to them, they make great proof.

My mom decided to keep every bank transfer she [and my dad] ever did, about 10yrs ago.

We are winning the lawsuit above because of this; we even found them altering the books [fraud].

Every month you have a clear envelope and you put all your bills, receipts and everything there.

All months of the yr, you put them in one file, and you write on the envelope the month and yr.

 

Unfortunately, there are no assets to speak of. If anyone has any ideas on what is "legally" allowed in terms of chasing for payment, please do direct me. I have no interest in bringing down the company - I only want what is due to me and I will gladly sever all ties.

Well, i can tell you how it is here, and probably there.

If a company exists [seen as a person legally], it must have some form of cashflow [especially with employees].

Cashflow means accounts, accounts that receive money.

If the debt is seen as real at the trial, you could go into those accounts to recover your debt. Afterall, accounts are assets too.

 

Check this up with your lawyer, i suspect it's the same there too [in our situation, the accounts have nothing, but the company had land].

[eleve82]

Radu, thank you indeed for your very detailed advice. Right now, I'm waiting for the said repayment to occur as promised and am looking to follow up with a solicitors letter in the event of a non-repayment of my loan. It is very good to hear your experience. Meanwhile, I am glad to see that you and your family are (rightfully) winning the case against your dad's ex employer. I shall update if there are further developments!

[Radu]

Thanks, but dad wasn't the employee ... actually he was the manager and he loaned money to the company that he helped start, as he also was a smaller shareholder.

Weeks after he died and went to his funeral where he cried, this vulture decided to dilute the shares of the company with a trick at the shareholder's meeting, to hold the debt the company had to him a secret [we only found out after we sold the shares, and we sold the shares because we couldn't hold him back legally forever]. Days after he died, he already gave the order to alter the books.

And this guy and the other business partner were both 'friends' of my dad's of over 20yrs.

In fact he knew the 2nd business partner for over 30yrs.

 

When it comes to money, and winning ... don't assume anything.

Trust, but verify.

 

Pls post when you recover the debt, i hope it's in full.

[pink_sugar]

I agree, although sometimes accepting a settlement will save you costs in the long run. Depending on the amount, you could pursue small claims court. But if going with a collector...depending on the time it takes to pay up, there are no guarantees. People are more likely to pay up when a settlement is offered and it's better than nothing at all IMO.