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Ask HN: What to do when you have your employer over a barrel?

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Re: Ask HN: What to do when you have your employer over a barrel?

#11

Post by lrhegeba »

i suppose you are a freelancer, not an employee. 1. this debt shouldn't have accumulated in the first place. make sure it won't repeat itself 2. your update may resolve the liquidity crisis or it may not.

case 1: it resolves the situation. you probably get paid? case 2: it won't. you loose a lot of money

your bargaining chip is the update and you should use it as collateral. as one can easily misstep by impulsive action, you should get advice from a lawyer how to proceed to secure as much payment as possible. probably additionally implementing kind of a kill switch so your moneymaking update cannot be used after bankruptcy without your help/key. from my own experience: when we talk about bankruptcy it helps to act fast, so speed and options to pressure money from them help most. threats will just complicate the situation so please get a competent lawyer involved as soon as possible as you are entering a legal minefield; doing it yourself just guarantees higher risk to step onto a mine.

good luck

Re: Ask HN: What to do when you have your employer over a barrel?

#12

Post by petrut_m »

Do NOT DELIVER!!!! Once you deliver you are disposable! You will not see a dime!!! Best thing would be to force them to pay in advance, and if they become bankrupt buy the client contracts and try to deliver the value with the help of a SW eng consultancy or other partners.

Re: Ask HN: What to do when you have your employer over a barrel?

#13

Post by Biologist123 »

Talking from the perspective of a business owner:

Firstly, on the face of it, it looks like you are taking all the risks of equity without the possibility of a payday.

Secondly, if the business is owner-managed you’re in a strong position to ask for an equity stake in lieu of cash payment. That might be preferable to you.

But as suggested above, legal advice would be useful at this point.

Re: Ask HN: What to do when you have your employer over a barrel?

#14

Post by xupybd »

This sounds crazy. They stand to make 10M and are relying on one external contractor to get them over the line. Yet they have not paid the contractor. Something is very wrong here. Either they are so hard up for cash flow they're almost done or they're abusing a key third party. I'd love to know more of the story.

Re: Ask HN: What to do when you have your employer over a barrel?

#15

Post by errantmind »

I agree with another comment posted here. If you are confident your work will generate a huge sum of money, and they haven't yet paid you, I'd ask for an equity stake with similar terms to the owners' stake (don't get screwed with an inferior share type).

Do not deliver the work until you get paid or they give you equity.

Re: Ask HN: What to do when you have your employer over a barrel?

#16

Post by YXNjaGVyZWdlbgo »

ontheground wrote: post #6
GrumpyNl wrote: post #2

It should never have become to 12 months and $250k.

FWIW, it didn't happen over the span of 12 months. It took ~3 years to get this far behind.

That does make it worse don't deliver without pay.

Re: Ask HN: What to do when you have your employer over a barrel?

#17

Post by jazzyjackson »

petrut_m wrote: post #12

Do NOT DELIVER!!!! Once you deliver you are disposable! You will not see a dime!!! Best thing would be to force them to pay in advance, and if they become bankrupt buy the client contracts and try to deliver the value with the help of a SW eng consultancy or other partners.

I'm reading "The Prize", a history of the oil industry. Chapter 1 introduces a Professor Silliman [0], who was commissioned to write a report on the practical fractionation of what would later become kerosene. When the investors became stingy and failed to make even a down payment, the professor left town, knowing their venture would fail without him. He was paid his asking price shortly thereafter.

[0] https://en.m.wikipedia.org/wiki/Benjamin_Silliman_Jr%2e

Re: Ask HN: What to do when you have your employer over a barrel?

#18

Post by glaucon »

If the company owes you $250K then : don't deliver and; get a lawyer.

Make dam sure the company does not have access to the code in the interim.

If the company is in as dire straits as you believe there's every chance you're never going to see your money.

Sales projections for the new release are just hot air, the may come true and they may not. If the principals are so sure of the sales projections they can go and find some investors to raise the $250K. In the meantime you not providing the update may leave you open to various types of legal pressure and that's just one of the reasons you need legal representation.

I've been in this position for much, much less money. Like you the amount outstanding slowly, slowly grew and because I was more interested in tech than money I allowed it to happen. Don't allow the same thing to happen to you.

Re: Ask HN: What to do when you have your employer over a barrel?

#19

Post by [deleted] »

ontheground wrote: post #10
mcv wrote: post #7

Are they 12 months and $250k behind on their own payroll, or on paying you specifically? Because that's an insane amount that never should have gotten that far. Also, if they have a board, it sounds like they're not actually a small client, which means they can easily pay you what they owe you. Can they pay the salaries of their management? Then they can pay you.

That is just me, though as I mentioned in a cousin comment it took some time for this to happen. Its not like I've just been working for the last year with out pay. Its more of a natural decay of their ability to pay... so 2.43 years +-

[deleted]
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