Handling unpaid invoices in pharmaceutical licensing deals can be a challenging process. In this article, we will discuss a Recovery System for Company Funds and Litigation Recommendations to help navigate through such situations effectively.
Key Takeaways
- Implement a 3-phase Recovery System for Company Funds including skip-tracing and contacting debtors.
- Consider litigation recommendations based on the likelihood of recovery and upfront legal costs.
- Be aware of the rates for collection services based on the number and age of claims.
- Understand the options of closing the case or proceeding with legal action in recovering unpaid invoices.
- Ensure clear communication and understanding of the process with affiliated attorneys and collection agencies.
Recovery System for Company Funds
Phase One
Upon initiating Phase One of the Recovery System, immediate action is taken to address unpaid invoices. Within the first 24 hours, a multi-channel approach is deployed:
- A series of four letters is dispatched to the debtor via US Mail.
- Comprehensive skip-tracing and investigation are conducted to secure optimal financial and contact data on the debtors.
- Persistent contact efforts are made through phone calls, emails, text messages, and faxes.
Daily attempts to engage with the debtors are standard during the initial 30 to 60 days. Should these efforts not yield a resolution, the process seamlessly transitions to Phase Two, involving our network of affiliated attorneys.
The goal is clear: to expedite the recovery of funds and mitigate the impact of payment delays on your business operations. Resolving payment delays in Pharmaceutical R&D contracts is not just beneficial; it’s imperative for maintaining financial stability and ensuring the continuity of research and development endeavors.
Phase Two
Upon escalation to Phase Two, the recovery system shifts gears, engaging legal muscle to reinforce the urgency of payment. The appointed attorney drafts a series of stern letters, each amplifying the demand for settlement. Concurrently, persistent phone calls aim to corner a resolution.
If the debtor remains unresponsive, the situation is assessed critically. A recommendation is prepared, outlining the feasibility of further action or the advisability of case closure.
The decision to proceed hinges on a careful cost-benefit analysis. Consider the following collection rates for various claims:
- Accounts under 1 year: 30% (1-9 claims) or 27% (10+ claims)
- Accounts over 1 year: 40% (1-9 claims) or 35% (10+ claims)
- Accounts under $1000: 50% regardless of claim count
- Accounts placed with an attorney: 50% across the board
These figures guide the strategic choice between continued pursuit or strategic withdrawal.
Phase Three
Upon reaching Phase Three, a critical decision point is encountered. The outcome of our comprehensive assessment will guide the next steps:
- Should the likelihood of fund recovery appear dim, we advise case closure. This outcome incurs no fees from our firm or affiliated attorneys.
- In cases where litigation is deemed viable, you face a pivotal choice. Opting out of legal action allows for claim withdrawal at no cost, or continuation of standard collection activities. Conversely, choosing litigation necessitates upfront legal fees, typically between $600 to $700, based on the debtor’s location.
The initiation of legal proceedings involves filing a lawsuit to reclaim all owed monies, inclusive of filing costs. Failure in litigation leads to case closure without further financial obligation to our firm or affiliated attorneys.
Our fee structure is straightforward and competitive, with rates varying according to the number of claims and their age. For instance, accounts under a year old are charged at 30% of the collected amount for up to 9 claims, and 27% for 10 or more. Older accounts and those requiring attorney involvement incur higher rates.
Litigation Recommendations
Closure of the Case
When the investigation concludes and the debtor’s assets offer no clear path to recovery, closure of the case is the prudent step. No further fees are incurred, ensuring a cost-effective resolution. If litigation is deemed unfeasible, clients may opt to discontinue legal proceedings, at which point our firm’s involvement concludes without additional charges.
Deciding to close a case is a strategic move that can save unnecessary expenditure and focus resources on more promising pursuits.
Our fee structure is designed to align with the outcome of the recovery efforts. Below is a summary of our competitive rates based on the age and amount of the claims:
- For 1-9 claims:
- Under 1 year: 30%
- Over 1 year: 40%
- Under $1000: 50%
- With attorney: 50%
- For 10+ claims:
- Under 1 year: 27%
- Over 1 year: 35%
- Under $1000: 40%
- With attorney: 50%
These rates ensure that our interests are directly tied to the successful recovery of your funds. In the event of unsuccessful litigation, the case is closed, absolving clients from further financial obligation to our firm.
Proceeding with Legal Action
When the decision to pursue legal action is made, it’s crucial to understand the financial commitment involved. Upfront legal costs are a reality, with fees such as court costs and filing fees typically ranging from $600 to $700. These costs are necessary for filing a lawsuit to recover all monies owed, including the cost of litigation itself.
Options for unpaid invoices are clear: either proceed with legal action by paying the upfront costs or withdraw the claim with no further payment obligation. If litigation is unsuccessful, the case will be closed, and you will owe nothing further.
It’s essential to weigh the potential recovery against the upfront costs and the likelihood of success before proceeding.
The fee structure for litigation should also be considered. Here’s a simplified breakdown:
- For 1-9 claims, rates vary from 30% to 50% of the amount collected, depending on the age and size of the account.
- For 10 or more claims, rates decrease slightly, reflecting the volume of business.
These rates are competitive and tailored to the specifics of your case, ensuring that the decision to litigate is both informed and strategic.
Frequently Asked Questions
What is the Recovery System for Company Funds in pharmaceutical licensing deals?
The Recovery System for Company Funds in pharmaceutical licensing deals consists of three phases: Phase One involves sending letters to debtors, skip-tracing, and attempting to contact them for resolution. Phase Two includes forwarding the case to affiliated attorneys for legal action. Phase Three offers recommendations for either closing the case or proceeding with litigation.
What happens if the possibility of recovery is not likely in Phase Three?
If the possibility of recovery is not likely in Phase Three, the recommendation may be to close the case. In such a scenario, there will be no obligation to pay the firm or affiliated attorney. Alternatively, if litigation is recommended, the client can choose to proceed with legal action or withdraw the claim.
What are the upfront legal costs if the decision is made to proceed with legal action in Phase Three?
If the decision is made to proceed with legal action in Phase Three, the client will be required to pay upfront legal costs such as court fees and filing fees, which typically range from $600.00 to $700.00, depending on the debtor’s jurisdiction.
What are the rates for DCI’s collection services based on the number of claims submitted?
DCI’s collection rates are tailored based on the number of claims submitted. For 1 through 9 claims, rates range from 30% to 50% of the amount collected, depending on the age and value of the accounts. For 10 or more claims, rates range from 27% to 50%.
What actions are taken during Phase One of the Recovery System for Company Funds?
During Phase One, letters are sent to debtors, skip-tracing and investigations are conducted to gather financial and contact information, and attempts are made to resolve the matter through various communication channels like phone calls, emails, and faxes.
What occurs in Phase Two of the Recovery System for Company Funds?
In Phase Two, the case is forwarded to an affiliated attorney who drafts letters demanding payment from the debtor. The attorney also attempts to contact the debtor via phone calls. If all attempts to resolve the account fail, the next steps are communicated to the client.
