Historic DG causing me a problem

[Deboy]

Hi Guys & Gals,

I am in need of a little advice if there is anyone out there that can help

Back in early 2014 I ran a business and took out a business loan with myself acting as garuntee.

At the end of 2014 I sold the business on, resigning as director and transfering all my shares to the new owners.

Anyway, since they have took over they have not made a single payment to the loan provider and they are now chasing me to settle it. The company is still active and trading, is there anything I can do to get them to pay up before recovery action is taken against myself or if I do settle it myself can I begin recovery from the new owners and if so how do i go about it

Just to add I have spoken to the loan provider and I am unable to come off as garuntor

Thanks in advance for any help

 

[Newchodge]

I assume you took no steps to reassign the personal guarantee to the new owners?

 

[Deboy]

stupidly no i did not

 

[Lawyer]

You could write to them giving them 7 days to pay otherwise you will sue them and if they do not pay sue them - even just receiving court proceedings from you might force them into it. It is not a straight forward case as you are not the person owed the money but presumably it was agreed they would continue to pay that debt and they have not so it is breach of a verbal agreement with you if nothing else.

 

[Newchodge]

You could write to them giving them 7 days to pay otherwise you will sue them and if they do not pay sue them - even just receiving court proceedings from you might force them into it. It is not a straight forward case as you are not the person owed the money but presumably it was agreed they would continue to pay that debt and they have not so it is breach of a verbal agreement with you if nothing else.

That is a bit of an assumption. 'presumably it was agreed they would continue to pay the debt'. there is no reason so far to believe this!

 

[Deboy]

Yes they agreed to pay the debt, infact I did get them to sign an undertaking that any liabilities that come my way the current and any future director and the company will take responsibility for them.

Not sure how water tight that agreement is though

 

[Lawyer]

If it is clear wording and it sounds like it is and in writing and you all signed I do not see why it would not be enforceable. Mind you suing them to get them to pay does not stop you being liable to the loan provider so you might have to pay loan provider and recover from the others under the undertaking (if they have any assets to recover against).

 

[The Resolver]

But was this loan not taken out by the company whose shares they now own? From the way the Deboy describes it, this was a sale of the limited company not of the business assets. So the company remains obliged to pay the debt based on the original agreement with the lender. The lender must take reasonable action to recover the debt before enforcing the guarantee.