Debt Recovery Success Through Negotiated Settlement Agreement

Introduction

Our client was the co-owner of a company that was subsequently dissolved. Following the dissolution, our client took responsibility for settling all outstanding liabilities of the company, including accrued interest, ensuring the company’s creditors were paid in full. However, our client’s business partner (“Borrower”) failed to fulfil their repayment obligations for their share of the liabilities, leaving a significant sum outstanding and owing to our client.

Despite numerous attempts by our client to contact the Borrower and secure repayment of the outstanding amount, these efforts were unsuccessful. Our client, therefore, initiated court proceedings in an attempt to recover the debt. Following the commencement of legal action, the Borrower eventually agreed to enter into discussions, resulting in a formal settlement agreement governing the repayment of the outstanding sum owed.

How We Assisted

We were engaged by our client to provide comprehensive support throughout the negotiation and settlement process. Our role included the following key aspects:

Negotiation Support

We represented our client’s interests during negotiations with the Borrower, ensuring that the discussions were structured and focused on securing an equitable outcome. Throughout this process, we advised our client on the potential legal and commercial implications of various proposals to safeguard his interests including seeking a charge over the Borrower’s property and a corporate guarantee from the Borrower’s trading service company.

Drafting and Preparing the Settlement Agreement

We prepared the formal settlement agreement governing the repayment of the outstanding sum. This agreement clearly outlined the Borrower’s repayment obligations, the applicable repayment schedule, and any interest to be applied to the outstanding amount. We also included a provision that required any costs our client incurred in connection with the negotiation and execution of the agreement to be reimbursed by the Borrower.

Settlement Agreement Completion and Execution

We supported our client in finalising the settlement agreement, ensuring that all terms were duly negotiated and agreed upon. Once the terms were finalised, we oversaw the completion and execution process to ensure compliance with all legal requirements. This included verifying the formalities of execution and ensuring the agreement was binding and enforceable.

Outcome

The formalisation of the Borrower’s repayment obligations under the settlement agreement provided our client with a clear and enforceable mechanism to recover the outstanding sum. Our involvement in the negotiations and drafting process ensured that our client’s interests were fully protected and that the agreement reflected a fair and practical resolution to the dispute.

By resolving this matter, our client was able to avoid further prolonged litigation and focus on his future business endeavours with the knowledge that his financial interests were safeguarded.

If you require assistance with drafting a suitable settlement agreement, business dispute resolution, or other corporate legal support, our experienced solicitors can help. We offer a complimentary 20-minute introductory call for most new matters to understand your needs, discuss key terms, and provide a tailored fee quote.