debt transfer to new company

[business sense]

hi,

i recently sold business to a partner. he agreed to start a new limited company and take the debts of the existing company and business as a going concern. the old company has now been closed. however, my partner now does not want to take on the business, even though he is the direcotr of the new company. i do have still have shared, paid up.

am i liable for the debt of the previous company, as he toook this onto his new limited company? i am not a driector of the new company, just a shareholder.

is there some paperwork i should be manking sure i have/get to ensure he fulfills his obligation. gutted at this betrayal.

the debt were about 40k that he agreed to take on.

any advice appreciated.

 

[Method Man]

Well, first things first - was there a business sale agreement? If so have a look over what provisions were in it for the debt transfer.

 

[M-C Hoare]

The usual way of transferring a debt is by novation but this requires the consent of all parties including the creditors.
I don't understand, if the old co is now dissolved, how the debts could survive in any event (unless of course the old "co" was not actually a limited company).
As Method Man says, check your sale paperwork.
Marie

 

[business sense]

yes a business sale was agreed with debt transfer.
however, the bank objected as i had made personal guarantee and i could not close the old company. however, the company was closed last november. i had assumed all was ok. can i be held liable or sue him for breach of trust?

 

[business sense]

it was a limited company, had a personal guarantee on the bank debt. i was unabel to close it initially so left it alone on trust that my former partner would pay off debt and close as appropriate. old company was subsequently closed recently and i assumed all was bening taken care of as it is listed as dissolved on company house website.

 

[M-C Hoare]

However, that will not extinguish your personal guarantee on the bank debt, which couldn't have been novated because the bank said no.
Sadly all you have left is an agreement/contract (verbal I assume as you have made no reference to a written contract of sale) with your former partner which you will have to sue on if he doesn't make good on his promise.
It isn't breach of trust, it is breach of contract potentially.
I guess the starting point is contacting the bank to see whether the debt has been settled and, if not, you need to see proper legal advice.
Marie