Bank Transfers Money Without Permission

appyammer · Jul 12, 2009

Not as straight forward as the title

I have 2 companys,1st company was formed in 1995 second was formed Feb 2009 and started trading March 09, new company has very similar name as 1st for obvious reasons

1st company suffered a very large loss from a client going into administration, leaving it with £80k owed to revenue and £95k to the bank,which is secured by a debenture over book debts and assets,no personal guarantee

The bank is aware that the 1st company has stopped trading (they did not know this at the time i set up the 2nd company) although they obviously know of the second company as they are also the bankers

Once i told them about the first company we entered discusions and had a meeting at their offices with my accountant, who they asked to raise a letter to satisfy the purchase of assets,goodwill. The reason for this is that I have asked for the £95k to be transfered by way of a loan into the second company (i suppose to keep the bank on my side) and the bank is wary of being classed as a preferential creditor. They are also trying to get it through on a government backed loan.

Now my problem. One of my employees paid in £10k to the old company account by mistake (this was for works carried out by the new company)
I have the facility to transfer between accounts so i did, couple of days later i noticed it had been reversed. I contacted my "relationship" manager and was told it was being used to reduce the overdraft as per the debenture, i insisted it be refunded but was told in no uncertain terms NO

Should i just say fine lets do the debenture route and let them whistle for the £85k?

JADEMEDIA · Jul 12, 2009

I think that even if you had not had this particular set-up or loose arrangement with the bank that if you look at the small print they can take funds from any account in order to service another.

In any event if the loan is being transferred it will now be reduced accordingly. The bottom line however is not to keep all your fundswith the same bank. Jade

GRDCredit · Jul 12, 2009

Presumably it was a cheque paid in?

Which company was it made payable to?

GRDCredit · Jul 12, 2009

JADEMEDIA said:
I think that even if you had not had this particular set-up or loose arrangement with the bank that if you look at the small print they can take funds from any account in order to service another.

Not correct. Bank has right of set off if accounts are in same name (i.e. they can use savings accounts balance to clear and overdraft) but not between accounts in different names belonging to separate legal entitities.

Geoff

appyammer · Jul 12, 2009

GRDCredit said:
Presumably it was a cheque paid in?

Which company was it made payable to?

It was made payable (by mistake) to the old company, although my accountant said as it was for works carried out by the new it should be paid back

GRDCredit · Jul 12, 2009

appyammer said:
It was made payable (by mistake) to the old company, although my accountant said as it was for works carried out by the new it should be paid back

I think therein lies the answer. The bank have, in my opinion, every right to insist the cheque gets paid in to old account and then that it stays there. Just imagine if/when the company is placed into liquidation. The liquidator is going to want to know why £10k has been transferred elsewhere.

Geoff

Moneyman · Jul 12, 2009

you need a lawyer on this one. if a cheque has been mistakenly put into the wrong account. the money does not belong to the old company. end of story. it might just boil down to what was written on the cheque.
banking ombudsman is the cheapest route.

GRDCredit · Jul 12, 2009

Moneyman said:
if a cheque has been mistakenly put into the wrong account. the money does not belong to the old company.

appyammer said:
It was made payable (by mistake) to the old company,

It wasn't put into the wrong account though was it (based on the payee)?

Was the cheque raised as a result of an invoice?
Which company raised the invoice?

appyammer · Jul 12, 2009

The payment was raised based on an invoice from the new company

GRDCredit · Jul 12, 2009

appyammer said:
The payment was raised based on an invoice from the new company

Then it is the new company's money - in my non legal opinion!

appyammer · Jul 12, 2009

GRDCredit said:
Then it is the new company's money - in my non legal opinion!

same as what my accountant said

any thoughts on just walking away from the old debt?

GRDCredit · Jul 12, 2009

Argh. Have a look at my previous posts and you will see my views on walking away from a debt!!

Geoff

appyammer · Jul 12, 2009

GRDCredit said:
Argh. Have a look at my previous posts and you will see my views on walking away from a debt!!

Geoff

geoff can you point me in the direction of said posts?

GRDCredit · Jul 12, 2009

I know your situation is slightly different but I do consider it morally wrong to walk away from a valid debt.

Have a look here. WARNING - set aside half an hour!

Far better to sit down with the bank and show them the invoice and produce proof that £10k was due to the new company

PS How the hell did you get the bank to lend such a large sum without a personal guarantee!

Geoff

David Griffiths · Jul 12, 2009

It seems to me that although the money belongs to the new company, it was made out to and paid in to the bank account of the new company. The bank did not act incorrectly in accepting it.

You then tried to transfer money out of the old company bank account, and the bank prevented that - again I don't see there is anything wrong with their action

If the new company wants to get the money then it seems to me that it has to bring action against the old company, not against the bank.

Of course that's based on the facts as presented, and it's not unknown for there to be a few vital details missing from questions!

appyammer · Jul 12, 2009

David Griffiths said:
It seems to me that although the money belongs to the new company, it was made out to and paid in to the bank account of the new company. The bank did not act incorrectly in accepting it.

You then tried to transfer money out of the old company bank account, and the bank prevented that - again I don't see there is anything wrong with their action

If the new company wants to get the money then it seems to me that it has to bring action against the old company, not against the bank.

Of course that's based on the facts as presented, and it's not unknown for there to be a few vital details missing from questions!

no David it was paid into the old company

appyammer · Jul 12, 2009

GRDCredit said:
I know your situation is slightly different but I do consider it morally wrong to walk away from a valid debt.

Have a look here. WARNING - set aside half an hour!

Far better to sit down with the bank and show them the invoice and produce proof that £10k was due to the new company

PS How the hell did you get the bank to lend such a large sum without a personal guarantee!

Geoff

i've had a £100k overdraft for the last 12 years, i've learnt what they want to hear (and without lying) and they are very easy to get of subject, once we were getting down to the nitty gritty when i mentioned that i'd changed from being onsite 24/7 to being inbetween the office and site manager said "so your helicoptering" i said that was a good description and spent the next 15 minutes talking about "helicoptering" i then said "where do i sign" no mention of personal guarantee

appyammer · Jul 13, 2009

GRDCredit said:
I know your situation is slightly different but I do consider it morally wrong to walk away from a valid debt.

Have a look here. WARNING - set aside half an hour!

Far better to sit down with the bank and show them the invoice and produce proof that £10k was due to the new company

PS How the hell did you get the bank to lend such a large sum without a personal guarantee!

Geoff

just put 30 mins aside, it wont open

Geoff T · Jul 13, 2009

David Griffiths said:
If the new company wants to get the money then it seems to me that it has to bring action against the old company, not against the bank.

Of course that's based on the facts as presented, and it's not unknown for there to be a few vital details missing from questions!

appyammer said:
no David it was paid into the old company

What David means (I believe!) is that your old company received money to which it was not entitled to. To remedy this either: The new company takes legal action against the old company to get the money the new company is owed; or the payer takes action to reclaim the payment.

appyammer said:
just put 30 mins aside, it wont open

Only 30 mins?!? Hope you're a quick reader when you do get there!...

Namesake!

The other option would be to look up GRD in the member list, and look through his posts from there...

GRDCredit · Jul 13, 2009

appyammer said:
just put 30 mins aside, it wont open

Sorry about that - try here

appyammer · Jul 13, 2009

ok i get the jist, thats some read

me simple man,so heres my simple thinking

i apply for overdraft
bank give overdraft,with debenture over book debts and assets
customer (15 years later) goes pop for £182k
bank takes what it can from debenture
leaves a balance (from what i can make out from geoff it dont matter if its 1p or £1mill)
i walk away having fullfilled my part of the agreement

other scenario
bank has debenture ties me up to a personal guarantee
takes my house
wife leaves me
commit suicide

appyammer · Jul 13, 2009

sorry thats not an option as i will morally still owe the dosh

GRDCredit · Jul 13, 2009

appyammer said:
any thoughts on just walking away from the old debt?

You did ask

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