Imagine a situation where you through no fault of your own are faced with a major lawsuit because one of your contractor suppliers has let you down and has gone into bankruptcy.

Let’s look at a case study:

You have a successful Pty Ltd Company that has a contract of supply with another company. The supply could be anything from construction, wholesale or services etc.
There is a non-performance component in your contract that can quickly go into company destroying amounts if non-performance occurs. You have also sub-contracted part of the required supply out to an external entity.

However this sub-contracted entity has let you down a sham even, they promised and couldn’t deliver or worse they delivered faulty goods and now you cannot fulfil the original contract and are being sued for it.

The company you own has taken years to generate goodwill, a successful business and it is now facing ruin and making loyal dependent staff redundant along with costly and lengthy litigation processes impairing the ability to be able run at all.

“Liquidate don’t litigate” should be a major consideration when facing significant legal issues.