Dilemma

[Tony]

Once they declare bankruptcy or are in the process you mayh never be paid the full amount owed.

The line or creditors ahead of you will take priority so in a nutshell I hate to say it you are screwed.

Unless of course you are protected under the labor laws of your State which consider your services to be under the category of employee not subcontractor.

If that is the case you may have a case to sue them under as an employee and use the labor laws which apply.

However it will be a long time before you see any money if at all.

Small claims is another option but unless you know where there assets are (ie bank accounts) your efforts may be fruitless when you attempt to collect the money. A judgement is worthless if you can’t collect on it.

So what can you do? Well I am no lawyer so any advice below is to be considered “proceed at your own risk”

I would ignore their request for returning the hard drive until you receive the monies due you.

Explain to them you are not able to go to the post office because you have no money for gas to put in your car and in addition cannot afford the postage.

If they insist on having a courier pick up the hard drive then tell them that will not work either because you are never home as you now have to ride a bicycle 40 miles to your current job at 7-11 which is barely supporting yourself and three small children.

In a nutshell there are no options which will work until they pay your invoice which will enable you to have the time, money and effort to send the hard drive back.

Put it in their court to solve their problem and not make it your problem to resolve it for them.

In other words if they try to F@#k with you , then you just F#$k them back.

It’s a mean world out there. Be bold and brave but hold your ground.

But you could also trust them and return the drive at their expense, wait it out and maybe get paid or maybe not.
It’s all a matter of how much you trust and believe their word as well as how screwed up the company was well before they declared it quits.

Tony Salgado

[Debe]

You could return the drive to them. Reformatted.

The drive is their property. The files on it that you created are not their property, not until they pay you. That’s your collateral.

If you have another drive of your own, copy the files from their drive, erase them from their drive and then return their property. At their expense and at your convenience, as Tony rightly suggests. You are under absolutely NO obligation to go out of your way to return it to them. It’s their responsibility to make arrangements.

But you really can’t knowingly keep it. It would still be considered theft, even if they owe you money. They are two independent issues. Connected, yes, but still independent.

debe

[Bob Cole]

[Chris D] “The company now says they are facing bankrupcy”

I love the fact that you have the drive and material. The claim about facing bankruptcy smells funny to me, Chris. It may be more strategy than reality. Debe’s idea may work, but if you erase the material and then lose it, you may be in trouble.

Definitely don’t return the drive with its material; consider telling them that you will settle for half-payment, upon which you’ll return the drive.

It’s been years since I’ve had slow-to-pay problems, but I have one now, and it is no fun. Good luck.

— Bob C

[Chris D]

Thanks for the advice Tony & Debe. I’ll give the drive back to them, but I’m going to delete my files from it, and make them get it at their expense.
Not sure if they are telling the truth about going bankrupt. On my last day there, 5 days ago, they had just purchased $700 worth of drives that they were having me copy files onto from another drive that wasn’t theirs.
Does a company facing bankrupcy do that? Sounds fishy to me.

[Mark Suszko]

I would take Debe’s suggestion, return the blank, reformatted drive, but with a note saying you will keep the files until you get paid, and you are filing a Mechanic’s Lein on the footage. They can pay you now or they can see you in small claims court.

The last minute flurry of file copying from other people’s drives sounds like a tip they knew they were going to declare banckruptcy in advance and were using you to unknowingly rip off other unpaid suppliers. My guess is you will never get paid for this gig. But keep the files as insurance. If they use a court to pressure you, you can still give them up. Or you can play a waiting game with them.

Guys who operate like these folks are like jugglers: they have a number of balls in the air, timed so one incoming revenue source covers the previous bad debt, and so on and so on, the current project revenue is paying off an old debt or financing the next project, and they make everybody working on the current project “float”, unpaid. Essentially they make you their bank, they are borrowing money without paying interest on it… your money.

This pyramid-like scheme is always fragile and depends on the timetable not being disrupted too long, or the juggling balls all arrive at the same time; old bills catch up to the new revenue stream. If your footage gets tied up in court with a suit and counter-suit, and they need it to complete another piece of the pyramid, their whole plan falls apart. This gives you more negotiation power then you thought you had, if they know that you know what their deadlines are.

Once the footage is past the expiration date for the deal it was part of, it is worthless to them and you will never hear from them again. Until then, expect a lot of whining, wheedling, cajoling and threats, whatever they think will work to get you to give up the prize. Make them work for it. You will be amazed when the money suddenly, miraculously appears. Warning: do not accept a counter-offer of a bigger payback than you are due, if you would just let them float. Insist all current debts must be paid in cash first.

[Ron Lindeboom]

[Mark Suszko] “Insist all current debts must be paid in cash first.”

And cash means no checks. None, nine, nada — no matter what they say.

Ron Lindeboom

[Mark Suszko]

Well, a certified bank draft type check is okay, as it’s on the bank’s credit, not theirs.

[Tony]

Mark,

FYI Little known secret I discovered from my bank which is certified checks can have a “stop payment” issued on them. An additional step of insurance when dealing with certified checks is to demand a letter from the bank written by the bank manager on bank letterhead which states that the funds will be guaranted upon presenting the certified check. Do not accept checks written from a bank which is out of state.

The check must be from a bank which has a local branch in your area.

If none of this applies then demand that the funds be wired to your account directly.

One last note Chris in my opinion has the upper hand even if the client sues him in court for the hard drive.
If Chris were to be sued Chris would then countersue for his claim on the fees due for his labor. If the client is really interested in getting his hard drive back then they or a representaive would be forced to be present in court.

Given the small value of the hard drive versus what is owed to Chris I doubt they would want to put in the time and effort to fight a court battle.

But since it is Chris’s only leverage he should hold out and wait and see.

Any discussions regarding the drive should be immediately terminated and the discussion must immediately center on when is the payment for the labor to be paid in full.

Do not say to the client that the drive is being withheld until the labor is being paid off instead refuse to discuss that matter and focus exclusively on only payment for the labor.

Anytime the drive issue comes up cut them off and restate “Where is the check or wire transfer for my labor forthcoming”? When the respond we need the drive back before we send the check. Restate “I must have my labor paid in full immediately or else I will be taking the necessary legal and labor board actions available to me.”

FYI in California an employeer who willfully withholds payment to an employee is subject to severe penalities one of which includes the day rate for the employee times thirty days. The penalities can add thousands of dollars in additional amounts due if an award is made.

Tony Salgado

[Ron Lindeboom]

[tony salgado] “Little known secret I discovered from my bank which is certified checks can have a “stop payment” issued on them. An additional step of insurance when dealing with certified checks is to demand a letter from the bank written by the bank manager on bank letterhead which states that the funds will be guaranted upon presenting the certified check. Do not accept checks written from a bank which is out of state.”

Tony is right, certified bank checks can have a stop payment applied to them the same as a regular check. They offer little more insurance than a regular check.

Californians at least have the security of the law which will bring the wrath of the District Attorney down on people who write checks and do not honor them. But that law only holds for NSF checks, not for checks that have had a stop-pay applied to them.

Ron LIndeboom

[Chris D]

Thanks for all the input, guys.
Here’s the latest:
I talked to an executive of the company and very politely told her I was willing to work with them on this drive. I was looking to get paid, but since they hadn’t paid me I was assuming the drive was a form of payment. It wasn’t what I wanted and the money was worth far more to me than the drive. So if they could pay me half of what they owed me then I would send them the drive minus the files I created which I would send them upon full payment. She said obviously I didn’t read the e-mail she sent me which said they were penniless. I asked if they had filed bankruptcy and she said they were on the verge, trying to avoid it.
She then told me to keep the drive if that was what made me happy.

Unfortunately, I didn’t ask her if they were penniless, how they were able to afford $700 of brand new Maxtor drives.