Branch of TNTP & Associates International Law Company Limited (“TNTP”) is a unit specializing in providing legal services on dispute resolution and debt collection in various fields such as Commerce, Construction, Labor, Intellectual Property Rights, etc. TNTP’s Lawyers and legal specialists have a lot of experience in collecting bad debts domestically and internationally and protecting Clients’ legitimate rights and interests. Accordingly, TNTP will share with readers a typical dispute in which we successfully collected a bad debt from Company J having its headquarters in New York, USA for the Client, which is Company K in Vietnam. The article will discuss the process of TNTP supporting Company K, the difficulties encountered and the solution to achieve debt collection results for a foreign debtor. We would like to invite readers to follow the article below.
1. Overview of the case
Company K is a company specializing in providing garment products with the standard of raw materials, fabrics, linings, and accessories as specified by Company J to continue producing garment products and distributing them to affiliated stores. Accordingly, Company J is obliged to pay Company K within the agreed period from the date Company J receives the goods of Company K at the warehouse or location designated in the US by Company J. Company K has completed the delivery work and other obligations under the Contract, but Company J has not properly and fully performed their payment obligations to Company K.
2. Process of supporting Company K in debt collection
Starting in 2021, TNTP has provided legal services to support Company K in debt collection in two stages: negotiation and lawsuit against Company J in New York State Court.
a) Negotiation stage
• First, during the negotiation stage, TNTP contacted Company J by email, phone call, and sent a Payment Request via international delivery to Company J. In the spirit of goodwill to settle the debt as soon as possible, for many months TNTP repeatedly proposed payment options and plans that were beneficial to both parties, but the representative of Company J always avoided, evaded payment obligations, and continuously delayed payment to Company K. This has greatly affected the operations of Company K due to the impact of Covid 19.
• To supply garment products, Company K purchased raw materials, fabrics, linings, and accessories as specified by Suppliers for production, then sold finished products to Company J. It can be understood that, to supply goods to Company J, Company K must pay for raw materials to Company K’s Suppliers. Company J’s delay in paying Company K will affect Company K’s cash flow and Company K’s timely payment of raw materials to Suppliers.
To speed up the payment of Company J, Company K proposed to Company J and the Suppliers that with the situation of all parties facing difficulties due to the impact of Covid-19, Company K would reduce the discount amount due to Covid from 17.5% (original proposal of Company J) to 7.5% for Company J on the condition that the Suppliers also agreed to give a 7.5% discount to Company K.
However, Company J ignored the goodwill proposals to the parties and continuously made unreasonable discount requests.
• To ensure its rights, Company K hired a debt collection agency in New York to directly verify the headquarters address of Company J, and at the same time, serve the Payment Request to the Owner of Company J. After receiving the Payment Request, Company J still maintained an unfriendly attitude towards Company K.
With the result of the negotiation not being satisfactory, TNTP proposed that Company K sue Company J in the New York State Court. Company K agreed to carry out this work.
b) Litigation Stage in New York State Court
• In preparation for suing Company J in New York, TNTP relied on its research relationships, consulted and recommended several reputable law firms in New York State for Company K to select a lawyer to represent them in suing Company J. Then, based on TNTP’s advice, Company K selected SH Law Firm with their representative – Lawyer D, in New York to protect their rights.
• At this stage, we not only supported Company K in compiling the necessary documents to file a lawsuit but also studied US procedural law to discuss with Lawyer D the issues that need to be clarified in this case and a reasonable legal solution. Based on the situation of the case and the desire for the collectible amount of Company K, Lawyer D agreed with TNTP on a plan to negotiate with Lawyer S of Company J to resolve the debt in the most effective method for Company K.
• At this time, through our information sources, TNTP learned that Company J was completing the application for dissolution of the enterprise, but this company intentionally did not declare the debt payable to Company K to complete the dissolution procedures quickly and avoid paying the debt.
Not missing the opportunity to put pressure on Company J and ensure the maximum possibility of debt collection, TNTP contacted and requested support from SH Law Firm and Lawyer D to search for information proving the concealment of debt information, information on the asset status of Company J and at the same time prevent Company J from dissipating assets or transferring assets to another legal entity (if any). TNTP has carried out the above tasks effectively by applying US law and reliable information from our information sources.
• Next was the mediation phase, TNTP accepted the authorized representative status of Company K to participate in the online Mediation with the participation of the New York State Court Mediator, Lawyer D, and Lawyer S of Company J. During many days of prolonged discussion, using information about Company J applying for dissolution but concealing information about Company K’s debt, TNTP, and Lawyer D applied the provisions of US law to pressure and force Company J to accept the plan to complete full payment of the debt according to the specific Payment Schedule.
At the end of the online Mediation, the parties agreed on the content of the Confidentiality Agreement and agreed to sign the Minutes of Work to send to Lawyer D for forwarding to the New York State Court Mediator.
3. Results of supporting Company K in debt collection
• After the online mediation session, the parties agreed on a debt settlement plan and signed the Confidentiality Settlement and Release of Obligations Agreement (“Agreement”). Accordingly, Company J must comply with the payment schedule to complete the debt payment process to Company K within 02 months. During this time, TNTP also continued to contact Company J to request Company J to make timely payments according to the Agreement signed with Company K.
• Performing the Agreement, Company J has ensured the correct payment schedule to Company K as committed. The entire amount under the Agreement has been paid in full and the dispute settlement work has been completed.
For many months, although geographically separated, TNTP, with its experience and efforts, has supported clients in contacting and influencing the New York State Court and Company J remotely while still ensuring work efficiency in the United States, protecting the legitimate rights and interests of Company K.
The above is one of the typical cases in which TNTP has successfully supported our Client in collecting bad debts abroad. With the legal knowledge and years of professional experience of our Lawyers and specialists, TNTP is always confident in ensuring the optimal benefits for our Client. At the same time, we constantly improve our expertise and skills in the field of debt collection to always prepare to accompany and support our Client.
Sincerely,
