QUESTION
What course of action do I take to follow-up with a company that has recently closed and still owes services to my business?
Asked on Sep 06th, 2011 on Business Law - Massachusetts
More details to this question:
My start-up competed in a business competition hosted by a marketing company that had been in business for three decades. We won the competition. The prize was services - a strategic marketing communications plan valued at $100,000. We recently learned that the company closed. No communication was sent to us from the company. How do we follow-up with this company to claim the services owed to us? Is there anything that we can do or have a right to?
1 ANSWER
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Closed or closing businesses are still required to "wrap-up" all of their current business ventures. This requires the business to fulfill or sever any outstanding contracts they may have with other businesses. Therefore you are entitled to your services under your contract. If the business is no longer functioning and can't fulfill the services, you may get another company to fulfill the services then sue the original company for the cost of those services.
Someone is responsible for the services that are owed to you and each business is responsible for fulfilling their obligations. You should find the members of the business and discuss the options with them. Failure for the business to make good on their contracts constitutes a breach and has legal consequences.
This would depend on the contract created when winning the competition and the business you are dealing with. The terms should be closely looked at by local counsel before further actions are taken.
Answered on Sep 07th, 2011 at 12:34 PM