Directors Guarantee

[modimoe]

Hello All
We have just received a money claim from debt collector for a personal guarantee. Business was put into liquidation in early 2010 and bank informed by IP. We have just received a few photocopied half pages of business current account statements and some photocopied sheets of a shortened directors guarantee. However the signatures are on a blank page and the other page states amounts I do not recognise, as it was a single loan over two years, which had been half repaid by time became insolvent and these amounts do not make sense. There is no copy of a loan agreement which I'm sure we signed.

Please can anybody help?

M

[Openlaw15]

Re: Directors Guarantee

Hello All
We have just received a money claim from debt collector for a personal guarantee. Business was put into liquidation in early 2010 and bank informed by IP. We have just received a few photocopied half pages of business current account statements and some photocopied sheets of a shortened directors guarantee. However the signatures are on a blank page and the other page states amounts I do not recognise, as it was a single loan over two years, which had been half repaid by time became insolvent and these amounts do not make sense. There is no copy of a loan agreement which I'm sure we signed.

Please can anybody help?

M

As far as am aware any personal guarantee dies when the company dies. A personal guarantee only lasts whilst the person or company is solvent, for a legally incorporated company anyway. This may not apply if there were any bankruptcy type clauses in the contract.

[Amethyst]

Re: Directors Guarantee

The personal guarantee is usually there for IF the company dies I'm afraid, else there wouldn't be a need to call it in.

Is this actually a county court claim you have received ? and how much is it for ? Who is the original bank, and who is the DCA ?
Are there full particulars and accompanying documents ( has the claim been issued at a court or through a bulk centre ? )

Did the bank try to call in the personal guarantee at all at the time the business went into liquidation ?
What month in 2010 was the liquidation ? ( just to see when the bank could have called in the PG ref limitations )
Is the PG a deed ?

You may have to get back on to the bank to request copies of the documents - a subject access request will get you personal info and documents - but not the company docs. the guarantee is personal info though so you should get back things related to that.

Once we know if it is a claim then you can write to the claimant and ask for copies of documents, though will need to know the particulars of claim to and other bits to know what to ask for.

[modimoe]

Re: Directors Guarantee

Hi Amethyst,

Thank you for replying. It is a County Court Money Claim issued from Salford and I have requested the extra 14 days. It was Lloyds bank and as far as I am aware they did not call in the debt. IP was assigned March 2010. The paperwork says it is a deed but it is and never was sworn. But it is the amounts I do not recognise they don't correlate with the loan we actually took with the bank or the overdraft. The claim has been issued by Lester Aldridge for 1st Credit.

[modimoe]

Re: Directors Guarantee

Apologies it's for £18,000. Details of claim - monies due under credit facility.

[Openlaw15]

Re: Directors Guarantee

The personal guarantee is usually there for IF the company dies I'm afraid, else there wouldn't be a need to call it in.

Is this actually a county court claim you have received ? and how much is it for ? Who is the original bank, and who is the DCA ?
Are there full particulars and accompanying documents ( has the claim been issued at a court or through a bulk centre ? )

Did the bank try to call in the personal guarantee at all at the time the business went into liquidation ?
What month in 2010 was the liquidation ? ( just to see when the bank could have called in the PG ref limitations )
Is the PG a deed ?

You may have to get back on to the bank to request copies of the documents - a subject access request will get you personal info and documents - but not the company docs. the guarantee is personal info though so you should get back things related to that.

Once we know if it is a claim then you can write to the claimant and ask for copies of documents, though will need to know the particulars of claim to and other bits to know what to ask for.

A bank is a secure creditor and it will automatically have secure remedies such as charges: fixed and floating, hence it's called a secured creditor

No, the law of guarantee is available to a creditor whilst the company is solvent to ensure it pays. The guarantor (person standing in for the principal debtor) makes a legal obligation to be bound for a contract between the principal debtor and the creditor. For a foreseeable bankruptcy issue, the creditors remedies are not personal guarantees, instead their security is by putting charges on the company's property and or retention of title clauses. The director simply should have obtained a property charge against the loan. The director's guarantee has been relegated to non secure creditor in the list of all the other non secure creditors, at the point of the company's liquidation.

[modimoe]

Re: Directors Guarantee

Thank you Openlaw I'm going to research that now, but like Amethyst I now thought the directors personal guarantee protected the bank against the company failing

[Openlaw15]

Re: Directors Guarantee

Thank you Openlaw I'm going to research that now, but like Amethyst I now thought the directors personal guarantee protected the bank against the company failing

Hope it works out for you, keep us updated. Thanks

[modimoe]

Re: Directors Guarantee

Hi Amethyst,

Thank you for replying. I am not sure how to respond. It is a County Court Money Claim issued from Salford and I have requested the extra 14 days. It was Lloyds bank and as far as I am aware they did not call in the debt. IP was assigned March 2010. The paperwork says it is a deed but it is and never was sworn. But it is the amounts I do not recognise they don't correlate with the loan we actually took with the bank or the overdraft. The claim has been issued by Lester Aldridge for 1st Credit. It's for £18,000. Details of claim - monies due under credit facility.
How shall I proceed?

[Openlaw15]

Re: Directors Guarantee

Hi Amethyst,

Thank you for replying. I am not sure how to respond. It is a County Court Money Claim issued from Salford and I have requested the extra 14 days. It was Lloyds bank and as far as I am aware they did not call in the debt. IP was assigned March 2010. The paperwork says it is a deed but it is and never was sworn. But it is the amounts I do not recognise they don't correlate with the loan we actually took with the bank or the overdraft. The claim has been issued by Lester Aldridge for 1st Credit. It's for £18,000. Details of claim - monies due under credit facility.
How shall I proceed?

If this guarantee was prior to the company bankruptcy, your defence is that the personal guarantee is subject to paris passu (creditors on equal footing, no special treatment to unsecure creditors) insolvency rules, ie only land charges and floating charges have priority.

[livingthedream]

Re: Directors Guarantee

Him just wondered if you had any update on this, thread seemed to go quiet