bankruptcy of umbrella company

[rmsbankrupt]

I work through an umbrella company. This company has just now become bankrupt.

As you perhaps know the realationship of contactors, umbrella company and recruiting companies. Let me explain: I hired my umbrella company to do my payroll processing . But legally I am its employee and my umbrella company is providing services to which ever company I work for on a contract. Fair enough ?
My recruiting firm got me the position in this IT firm as a contractor. So my IT company pays to my Recruiting company for my services. I get my time sheet signed by my manager and send to my Umbrella company which then invoices my recruiting company.

This is what happened : on the 27th April 05, for the month of April my umbrella company invoiced my recruiting company for my salary / services . But on the 30 April my Umbrella company declared bankruptcy. Luckily the invoice of the salary for April has still not been transferred from my recruiting firm to the umbrella company. And my recruiting firm has decided not to transefer it and will hold it for me till I can arrange with another umbrella company.

My question is that will the Bankruptcy court force my recruiting firm to pay up the invoice. (which will not be really paid to me but rather would go towards paying the bankrupt companyÂ’s debt ..in a pecking order ..and me being employee would get the last share) ?.

[CDavey9501@aol.com]

As an employee your unpaid wages will not be last in the pecking order.

However I suspect much of the income you receive from these (somewhat contrived) arrangements is by way of dividends. As a shareholder you will be last in the pecking order!

[Robert_I]

I would have thought the liquidators would want to try to obtain any unpaid debts in the usual way. Your recruitment company would then be at risk. Did the invoice ever get sent to the Umbrella?

Always thought there was a catch to these companies - was this part of a large group?

Why not operate your own company and avoid paying money to an umbrella?

Martino- is it OK to reveal the operators?

If not please e-mail me below.

robert@taxand figures.com
hemel hempstead