Shares

[Bpw]

Hi new to forum I did try to see if this issue was posted already, could find one. I lent some money to a person and instead of paying me back he gave me 3 shares in his company, I didn't want them but he said he has issued the share certificate and I'm having them. I never signed the share agreement are they legal? He hasn't updated his annual return or his accounts showing the shares, where do I stand?

[PallasAthena]

If you lend money to someone and the agreement is they will repay it then the repayment has to be in cash (unless you expressly agreed to accept something other than cash, which I assume you didn't).

He cannot require you to accept shares instead of cash nor force you to become a shareholder in his business. To state the obvious his shares may be worth nothing and in any case there is no market for them so you wouldn't be able to sell them to convert them to cash.

Simply tell him you refuse to accept shares instead of cash and you require him to repay you in cash per the original loan agreement and that you do not agree to own shares in his business. Then be prepared to follow up with court action as you would for any other unpaid debt.

[Bpw]

Thank you for the advice, I'm prepared to take him to court. Since on agreements we're signed, I presume legally I don't own any shares

[PallasAthena]

No you don't. Put your reply in writing. You do.not accept his offer to repay you in shares. You do not consent to being a shareholder in his company. You require repayment in cash in accordance with the terms of the loan agreement.

[atticus]

Was there a written loan agreement?

[Bpw]

No you don't. Put your reply in writing. You do.not accept his offer to repay you in shares. You do not consent to being a shareholder in his company. You require repayment in cash in accordance with the terms of the loan agreement.

Hi Sorry for delay in responding, no there is no legal agreement, he doesn't dispute the money I gave him, the problem now is he says he had paid me for the shares and wants me to send him an email stating that fact, which of course I haven't nor am i going to. I just need to know what I can do to make him pay all the monies owed and if I can put a time line on the recovery. the money was given 5 years ago he has only just started to pay little amounts back and at this rate it will take another 3.5 years. which i think is unreasonable he only pays when I send him messages to do so. citizens advice are saying I need to send a letter before court proceedings which I'm trying to organize, I though it would be getter if a letter was sent by a solicitor, hopefully carry a little more weight. surely there must be something I can do legally with costing me a lot more money.

[atticus]

"He says he paid you for the shares"

Is that correct? I read your earlier posts as saying the this debtor had issued shares to you, attempting to convert the debt owed to you into equity in his company.

Yes you can sue for the money, and Citizens Advice has given you good advice. You do not need to engage a solicitor; you can do it yourself. We have example pre action letters on this site. See the links in the Shortcuts section.

[Bpw]

Yes the shares were for a portion of the debt not all of it, he owed quite a lot of money and still does owe a lot of money. would it be ok to put a time limit on the letter and would he take any notice if its come from me?

Can I just say thank you all for advice and guidance it really is appreciated

[atticus]

You should put a realistic time limit for a response. I suggest 14 days.

He should take notice of your letter, but whether he does is up to him: we cannot say.

[Bpw]

You should put a realistic time limit for a response. I suggest 14 days.

He should take notice of your letter, but whether he does is up to him: we cannot say.

Thank you for your help, i will look at the shortcut links and see where it goes.

[PallasAthena]

I am still not clear what the repayment timescale is in the original loan agreement. Your description of it sounded rather rather rather vague. Has he breached the terms of the agreement?

Golden rule at this point: never bluff. Only say you will start proceedings for recovery if you are willing to do so. And if you say he must reply within 14 days or you will start proceedings then if he doesn't reply on day 15 issue a formal LBA and follow process through from there. If you let him call your bluff by ignoring your time limits you will get nowhere.

[atticus]

PA gives good advice in the second paragraph.

[Bpw]

I am still not clear what the repayment timescale is in the original loan agreement. Your description of it sounded rather rather rather vague. Has he breached the terms of the agreement?

Golden rule at this point: never bluff. Only say you will start proceedings for recovery if you are willing to do so. And if you say he must reply within 14 days or you will start proceedings then if he doesn't reply on day 15 issue a formal LBA and follow process through from there. If you let him call your bluff by ignoring your time limits you will get nowhere.

Hi

Thank you for your reply.
Yes I intend to follow through, I sent the letter by email and followed by posting it the next day, he is at this point ignoring my letter. which I expected.
there was no time scale because he was a friend and he asked me to help him out, I approached him in March 2022 letting him know I needed him to pay the money back because I needed it. he did pay some of it over 12 months, but now I only get drips as and when he feels like paying or when I constantly beg him for money.

Because of the amount and the time he takes to pay, I think it would take another 2 to 3 years for him to pay it all back and since I've been waiting over 4 years already I don't think its acceptable to keep waiting. as I mentioned to him, I don't think I should keep begging for crumbs, he didn't have to beg me for the money when he asked for it. I have been more than patient.

[Bpw]

Hi

The letter was send and after a few email exchanges, I suggested a £1000.00 per month by a certain date, he has just go back with £500.00 per month with an extra payment at the end of the month if there are funds available, with an aim to pay back over a certain period of time. do I except this proposal or counteract with £750.00 per month and ask for a guarantee to pay the balance with his time period?

I think if I agree, there will be times when he will try not to pay and once again linger the debt over years rather than months...any thoughts?

[atticus]

Repayment terms are for you to decide. Getting a written acknowledgement of the amount now owed would be a very good start, however.