Sued by Tiger Capital Group? 7 Steps to Take in the First 20 Days

The lawsuit Tiger Capital Group filed against your company will not go away by itself, so the next steps are important to get right and they may have to be taken quickly. Generally you have just a few weeks to answer. 20 days if served in person in New York state court, 30 days for other kinds of service, and 21 days in federal court. Time matters and you don’t want to get a default ruling against you. Don’t ignore the suit. Make sure to read the papers carefully, find out whether you’ve been named personally, get a lawyer to appear for you, and protect your cash.

1. Confirm who is suing

You should identify exactly which of your companies is being sued and who is suing. Tiger Capital Group is a New York firm; it has an arm called Tiger Finance, which works as a kind of ‘asset-based lender’. It also appraises and disposes of assets. Tiger is not primarily a merchant cash advance funding company. Check that the summons really names this company as the one suing you. Make sure it says you are named, know which court it’s in (federal or New York state) and write down the case number.

2. Keep every paper

Save all the papers from the summons, the complaint and attachments. Don’t lose anything. Make a folder with the court documents and an index of every one in the suit. Check the postmark for the day it arrived. You may need those dates. Make copies of everything. Was it served in person? Did it come by mail? Write down when it did. Make a summary of who, what and when, as you will need it for the deadline.

3. Work out your deadline

Find out exactly when you need to answer the papers, and set reminders, so you’ll keep it in mind. (Check whether it is a federal court case - there are special deadlines for that.) New York has its own Civil Practice Law and Rules, the New York statute is CPLR 320. A lawyer will need time to get all the facts, verify every number in the suit and learn about your business, not to mention whether you are liable and have a defense. Work with the attorney to know your deadline and beat it. Calling Tiger doesn’t push back the deadline. Don’t assume you have 30 days from the day you opened the envelope.

4. Get a lawyer to appear

Once the suit is filed you will need an attorney to make appearances in the case. In most New York courts, you can’t have the business appear without a lawyer. Working with a lawyer means getting that law firm to go on the record. A lawyer can come up with a number of solutions, figure out how long you have to answer, and give advice on whether you should settle or continue to fight. Even if somebody has negotiated, confirm an attorney has also actually agreed to handle the lawsuit, enter your appearance, defend you from judgment and appear for each defendant. Negotiation and defending a case are separate jobs.

5. Check the claimed balance

As part of defending the case you’ll have to get the relevant contracts in the dispute. Look to the amounts in the Complaint, summons and attachments. Review every statement and their claim for payment. Verify if it agrees with all your records of the money advances you had. Find a copy of the payment history and documents of money sent or taken from your account. Look at any papers describing money you paid back and confirm all amounts that were tendered or which were collected. Don’t assume that just because the company makes an accusation the amount it demands is correct. It might include extra fees, charges or amounts. Read the case papers closely and see if they are trying to make you personally liable for repayment.

6. Protect your bank accounts

If money has been seized from you, it is important to get the actual court order, restraining notice or collection letter. Don’t assume all papers from the same company mean the same thing. An assignment notice to your customers isn’t necessarily a court order. Hiring an attorney will not automatically release the restraint order. Moving money, inventories or other assets around because a bank account has been frozen may hurt more than help. Speak to a lawyer before you move money, send payments elsewhere or authorize a new account.

After the time to answer expires, a plaintiff can seek to take a default judgment, and then start collections. In New York State, one of the tools a judgment creditor can use after it gets a judgment is to restrain your bank accounts. If the judgment creditor serves a restraining notice on the bank, it must freeze the account for up to a year, or until the judgment is paid, satisfied or vacated. A motion to vacate for ‘excusable default’ must be made within one year after you are served with the judgment and notice of entry. And courts won’t accept every excuse.

7. Weigh any settlement carefully

Don’t rush and agree to a hasty deal because you are scared to face a fight. Before you agree to any offer or pay anything to settle, confirm the debt is valid and worth any amount being asked, and make sure you check the terms. Do you know who is being released? Once you come to an agreement, will you be in a position to live up to your end, including collateral or guarantees which may have been made personal? Make sure before you sign it the written settlement spells out the total amount being paid to satisfy the debt, the total of payments you are making and when each one is due, credit for money which has already been collected, if there is a commitment to release the bank accounts, which businesses, guarantees and people are released from the debt, how you will confirm when the lawsuit is dropped from the court, if you have the right to dispute a late payment and what will happen if any payment is missed.

If you owe other funders too, a solution with one funder does nothing for the rest. Make sure to keep every file separate, so that it doesn’t get confused with the others. Filing a bankruptcy petition will trigger what is called an “automatic stay” of any lawsuits which are already underway. Talk to a professional first.

A free contract review costs nothing and takes a day or two. Call (888) 837-7053, or send the agreements to Delancey Street for a straight read on your options.