Fighting for Subbies Rights
There are offers out there to purchase creditors Bloomer Constructions debt for 4.5% and another one from the same company with different names as signatories for 5%, this one is from a different New York address.
If it's not a scam
If it's not a scam, the only logical reason they are doing this is clear. The intention is to become the largest creditor, try to force Bloomer into liquidation and then sue creditors for preferential payments.
If it is a scam
If it is a scam they want your credit and bank details.
States Leading Insolvency Lawyer
One of the states leading insolvency lawyers believes if a subbie sells a debt and subsequently the debt purchaser being the largest creditor force Bloomer into liquidation, then the subbie can be sued for a preference but not receive any further dividend from those recoveries.
Why would anyone buy the debt at the lower end of the DoCA?
- Preference recoveries would go to the owners of the debt, not the subbie who sold the debt.
- The preference claw backs are where the debt purchaser makes his money.
- The preference claw backs are also where lawyers make their money.
My personal opinion
I will not be selling our companies debt under any circumstances. I don't know if we would be subject to preference claims but knowing first hand the avarice of some lawyers, I am not willing to take that chance.
The purchaser purports to be a New York Hedge Fund with the letter sent out on a template that looks at best, dodgy with spelling mistakes including the misspelling of Bloomer on one letter (they spelt it Boomer) and numerous other issues which would have to question the legitimacy of the letter or the offer.
On the second page one of the terms state;
- Buyers (them) satisfactory review of the credit worthiness of the seller (you).
Shouldn't it be the other way around?
Would any creditor really be willing to give their bank account details and "credit worthiness" to an overseas business that doesn't have an Australian ABN or ACN?
We are investigating and will get back with our findings.