Unpaid final instalment from company sale

The Client

National PR agency.

Value of Dispute

£325,000

The Commercial Dispute

An entrepreneur sold their PR company, with the purchase price to be paid in stages. However, the final instalment of £250,000 was unexpectedly not received.

The entrepreneur approached the parent company for an explanation regarding the unpaid instalment, and was advised there had been a breach of contract. They engaged a legal professional to explore the claim – spending £20,000 in legal fees in the process, but no progress was made. Having failed to make any meaningful headway, the entrepreneur felt their only option may be to write off the monies owed to them. They then sought advice from their accountant in relation to the relevant tax treatment, and were informed of Escalate.

How Escalate Resolved – Services Used

The case followed the normal Escalate mediation process for the full three-month period before moving to the litigation stage. Aware that there was no legal merit to justify withholding payment, the defendant tried to delay the process (threatening to counterclaim, requesting to switch the case from a regional court to London, and asking for an extension of time) to frustrate the claimant and increase ongoing costs so they would drop their claim.

As the claimant held no financial risk through the Escalate process, these attempts to dissuade them from pursuing their case had no impact – in fact, they served only to increase the defendant’s own costs.

Escalate continued to push for a full settlement. Six weeks after the mediation, we secured £325,000 for the client as the defendant was forced to concede once its costs became unsustainable. The total cost to the defendant – including its legal fees – in its pursuit to delay the claim amounted to around £450,000.