Enforcement of a personal Guarantee

[settlesettle]

Hi all,

This is on behalf of a friend who has asked for my help. Any help from anybody in similar situation or words of wisdom would be gratefully accepted.

A is director of a ltd company. B (my friend) agreed to become a director (not shareholder) of the same firm.
A began accumulating large personal debts including owing £75k to HMRC for personal tax. A used company funds to pay personal debts (rent, family members salary, gambling debts).
A hide other company debts from B.

A decided to take out a business loan from a private loan company of $50k in 2018 which required signature of both directors to personal Guarantees (PG).

B was bullied and coerced into signing the PG for first loan of £50. A told B that he had substantial fee income coming soon to the firm to settle the loans.

In Sept 2019 A* decided to take out a 2nd loan for £50k. Similarly, B was bullied into signing the second PG under threat of closure of the firm which would have left B being without income.

A died in October 2019. Ltd went into liquidation with no assets to speak of.* A`s estate was insolvent.

Loan company now wish to enforce PG against B who has a modest income. He jointly owns a house with his wife. Equity aprox £100- £150k. B has no other assets.

B currently lives with his wife and 4 children in a rented property whilst his property is rented. To make matters worse, his tenants have not paid rent for 5 months and he has issued a section 8 notice which expires on 2nd April 2020. BUT he cannot bring proceedings for 3 months now due to the protection from eviction under the recently enacted Coranavirus Legislation.

The loan company has now issued a debt claim for £101,000 (including court fee of £4350).

B must file a defence (N5B) by 2nd April 2020.*

I believe he has an arguable case.
Duress,undue influence, misrepresentation by deceased director.
B did not seek independent legal advice before sighing PG. The loan company did not request written conformation from an independent lawyer that advice had been provided. All document were signed electronically.*

Any thoughts or advice welcomed.*

[Mary Jones 2]

i'm in a similar situation for lesser amount*
there might be an element of presumed undue influence if he was not an operational director (ie director in name only), which is assumed by courts and has to be dis proven by claimant and to do this* - they have to obtain separate proper evidence* he received* legal advice showing free will - i believe this will be your strongest argument. if they cannot provide this evidence - a square box stating you should get legal advice on the doc is no acceptable or sufficient in courts as per Etteridge Case.
ask for evidence of separate communications with him personally* - not just the other director , again to prove free will, and place in doubt the validity of an electronic signature (which are valid in court) but did he do it ? how do they know you did the electronic signature without this communication ( do a SAR)- ask them to prove they knew it was you ticking the box to do e sign. I sign for my husband all the time -*
was the PG excercised as a deed and with a witness signature? this may make it more difficult.