2 Directors - 1 Bankrupt

[AerialSolutions]

If anyone could help it would be much appreciated.

Our Ltd Co was forced to cease trading earlier this year due to major cashflow issues. We paid all wages due to staff and we now have unsecured creditors (HMRC included) along with directors guarantees on a bank loan. We followed the SpongeBob plan and thankfully things have quietened down on the unsecured side of outstanding bills.

Both directors have now found alternative employment but are struggling to keep up with the bank loan secured by the guarantees.

Unfortunately a van hire company has instructed a debt collection agency to recover £13k worth of debt due to a stolen van which was not insured.

The director who signed for the van thinks the only option is to file for a personal IVA/bankruptcy - will the other director become liable for ALL guaranteed debt?

:|

 

[OldWelshGuy]

The simple answer is yes. as you are jointly and seperately liable for the debt, i.e. you both owe half and both owe it all, so the creitor can collect any amount from each (up to the total owed of course, they can't collect twice)

 

[StevensOnln1]

If you both signed all the guarantees then you're both liable for the full amount. But if only 1 of you signed a particular guarantee, that creditor could only come after whichever of you signed it.

 

[Chris Ashdown]

Not sure the above is true as directors normally sign for the company in their legal capacity, Banks on the other hand require personal guarantees and I think have to advise getting legal advice to make sure you understand

 

[Spongebob]

Who hired the van? Was it the company, or was it the director in a personal capacity? In other words, to whom was the agreement and/or invoice from the van hire company made out to?

If it was to the company, then the contract is between the van hire company and your company. Unless the other director signed a specific personal guarantee then he has no liability whatsoever.

If the invoice was made out to the director with no mention of the company, and he signed the agreement, then he is liable. If however, the company's name appears on the invoice or agreement as well as the director's name, then it would seem logical that he was signing in his capacity as a director, and not in a personal capacity. In the absence of a specific personal guarantee, then he is not liable.

Either way, if you did not sign a personal guarantee, then no liability rests with you.

 

[Alan R Price]

Not sure the above is true as directors normally sign for the company in their legal capacity, Banks on the other hand require personal guarantees and I think have to advise getting legal advice to make sure you understand

Chris, it's not unusual for leasing/hp companies and landlords to require personal guarantees, not just banks. Sometimes supplier agreements also contain guarantee clauses. If a document says it's a PG, it's a PG and on the face of it, anybody who signed it is liable. Any director who is being pursued under a PG should however take specialist legal advice because sometimes there are legal flaws that could make it unenforceable.

 

[Spongebob]

I've just noticed that Alan Price has been 'thanked' more times than me.

My hit rate is better, though!

 

[Chris Ashdown]

Ha Ha just given him one more

Sorry Bob

 

[Alan R Price]

I've just noticed that Alan Price has been 'thanked' more times than me.

My hit rate is better, though!

900 reached - thanks! *removes helmet* *waves bat towards team-mates on pavilion balcony*

 

[Charlie B ACS]

900 reached - thanks! *removes helmet* *waves bat towards team-mates on pavilion balcony*

A very, very rare occurrence!

 

[Alan R Price]

A very, very rare occurrence!

Just because you got the Old Grammarians' "Batsman of the Year" award! back.

 

[Charlie B ACS]

Just because you got the Old Grammarians' "Batsman of the Year" award! back.

Hadn't raised the bat in 12 years, then did twice in 3 games! Bring on the Mongoose

 

[Alan R Price]

Bring on the Mongoose

Almost like real cricket then!