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personal guarantee on lease equipment

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  • personal guarantee on lease equipment

    I am writing this to see if anyone can help, not sure if there is any hope, but here goes...

    I signed a personal guarantee, i should have known better really, started a new company with a business partner, lets call him Keith. The business was of course going to make millions, and to do this we needed a lot of computer equipment. I jointly signed 3 personal guarantees, 12K, 8K and 10K. The worse i thought could possibily happen was if the company went down, then i would be responsible for 50% of the debt and we could give the equipment back and maybe lose a few thousand.

    Keith brought in a new investor after about 8 months and I utimately lost and control in the business, so i resigned. I wrote to the leasing companies and explained, in order for me to be taken off as a personal guarantee. They did not agree. I also sold my shares in exchange for an indemnity document against any personal guarantees. Keith signed and the other agreed to sign but never did, but took the shares anyway.

    The company when down 6 months later, Keith wrote to the leasing company explaining this was going to happen and he had an alternative company willing to take on the equipment. In the meantime the one remaining Directors and the investor moved (stole) the equipment to a safe place. We told the leasing companies where the equipment was in order for them to retrieve it, (legally it was not our property, so we could not retrieve it or report it 'moved').

    All 3 companies made no effort to contact these people or the administers, instead, took the easier route of going after the personal guarantees. Letters and e-mails have been sent to try and make them see sense, however these companies are now taking both me and Keith to court.

    Keith has no money or assets, but i have a wife and a house jointly owned, i have assets in the house but i can't sell, it is not fair as my wife has been paying the mortgage for sometime now.

    I instructed a solicitor but he has cost £1800 so far and we have not gone to court yet, so i had no choice but to dumped him.

    I am going to court on the 5th Jan with my ex-business partner, (keep your friends close and your enemies closer) to try and defend.

    I think it will all come back on me, i had no control, i have no equipment and I will have big debts around my neck...life and the system is not fair.

    please help, are there any cases of personal guarantee where people have won?

    Thanks
    Last edited by fredbloggs1969; 23rd December 2009, 07:59:AM.

  • #2
    Re: personal guarantee on lease equipment

    Liability under a personal guarantee continues even after your resignation as a director unless the other party to the contract releases you from the liability, what reason did the leasing company give for not doing so?

    Leasing companies want money, not equipment, which is why they did not attempt to recover the equipment. However, if there is any residual value in the equipment, they may be obliged to realise that and off-set this against any debt, but that does depend on the terms of the lease.

    Did you sign a compromise agreement when you resigned?

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