bank court claim - offer full & final?

[cbrman599]

hi

 

I have received a claim from a bank, I joined a company in 2004, with the promise of directorship & shares from the MD - to cut a long story short I signed a personal guarantee (whilst still an employee & no shareholding) for the bank to give the company an overdraft of 40k.

 

I left eventually as I didnt get what i was promised, the bank have now issued a claim against me for over 50k.

 

Should i offer a full and final settlement - I have around 10k that I could give them but that all i can muster.

 

I live with my partner & children, she owns the house - mortgage & deeds arein her name only.

 

There is around 30k equity in the house.

 

I now have my own business but dont take a huge wage from it.

 

How reasonable do you think the offer would be? What are the chances of the bank bankrupting me?

 

I have 28 days to file a defence.

 

thanks

 

cbr

[flyingdoc]

If you signed guarantor for OD of 40k how are you liable for 50k? did the company increase the overdraft after you left and in doing so did they invalidate your guarantee?

 

I would ask for copies of all paperwork relating to this account at first.

 

making a 10k offer immediatly I feel would be a bad move as an opening one - They will immediately assume that you can afford more and push you to do so.

[macie]

Did the bank make you take independent legal advice before you entered into the guarantee?

 

Just because you signed a contract doesn't mean its binding.

 

A contract (such as a personal guarantee) has to have "Consideration". Read the following link carefully

 

Consideration under English law - Wikipedia, the free encyclopedia

 

Given your explanation of the circumstances in which the guarantee was entered into I can't see what the "consideration" would be. I have been on the opposite side of this argument from some one who pledged a personal guarantee to me in relation to business debts.

 

I would get some professional legal advice with the first £1k of the £10k you have at hand, but that is my personal opinion.

[cbrman599]

hi, thanks for the quick responses.

 

the additional sums are interest & costs so far.

 

I have copies of the signed guarantee from the banks solicitors - I have been to see a solicitor, he feels I have maybe a 10-20% chance of defending the claim. He said that whilst 'unusual' for an employe to commit to guaranteeing his employers overdraft - it can happen.

 

I had advice given to me by a solicitor appointed & paid for by the MD of the company, it was all over rather quickly, with the added pressure to me of the MD sitting in on the signing with me.

 

I was taken advantage of but dont really know what to expect next?

 

I havent been in this position before & am extremely worried by it all.

[flyingdoc]

What did you get in return for signing guarantor?

[cbrman599]

I didnt get anything, apart from what now seems to be a huge debt!

[flyingdoc]

I would say that you may have a defence on 3 points.

 

1 lack of consideration - You actually got nothing in return for taking on this debt so the contract may be invalid.

2 Duress - you were "encouraged" into signing for this by your employer who sat and ensured that you signed it

3 you had no opportunity to get INDEPENDANT legal advice - the person who gave advice was paid for and acting on behalf of the MD of the company

 

Is your solicitor a "GP" type solicitor or is he an expert in company/contract law. if not, it might pay you to employ a solicitor who is...

[cbrman599]

how likely is it that the banks bankrupt people rather than accepting settlements?

 

Is it straightforward for them to get a charge on my 'beneficial interest' in the family home?

 

I am trying to see a worst case scenario here, at the moment I feel as though i'm sinking fast

[macie]

Return the acknowledgment of service.

 

See a good solicitor. Get a defence in.

 

It will be a year or more in coming to court.

 

There will be plenty of time to discuss settlement with the other side. I wouldn't be making any offers to early, if it was me.

[Dangermouse]

I agree with Flying Doc, no consideration, duress & no independant legal advice. You must get the acknowledgment in to court & not admit any part of the debt, do not ignore it since the bank will go for a default judgement.

 

Dangermouse

[cbrman599]

thanks everyone,

 

on the face of it, the bank has a guarantee signed by me, but obviously I think there are a few 'tiny' grey areas.

 

How diligent should the bank have been in confirming with ME that I wasnt a director or shareholder at the time of signing?

 

They must have requested some info from the MD as a couple of weeks before the signing he sent them a letter stating I had 40%!!

 

I only found this out a couple of weeks ago when the banks solicitors sent me a copy - I have never had shares and this is confirmed by all documents registered with companies house. The banks solicitors also claimed I was a director at the time of signing, however, it was a couple of months after the signing that the MD finally gave me the form to complete, so it was impossible for them to have had any factual proof at that time.

 

I feel as though the bank should have confirmed my status with ME rather than relying on info that quite frankly could have said anything.

 

what do you think?

[flyingdoc]

cannot stress enough the importance of a good and specialist lawyer - Im talking of the calibre of Irwin Mitchell/Pannone/Thompson - big companys not a high street practice.

 

These guys will eat you up oherwise.

[cbrman599]

thanks

 

does anyone have any info on what checks a bank should make when asking for guarantees from an employee of a company - should they check to see if they have a shareholding and or directorship, whom should these checks be made with?

[cbrman599]

well, just an update for everyone - I offered 20% of the debt as full and final to the bank, after having given them my income expenditure details as requested, they have now applied for 'summary judgement' - how likely is it that this will happen in their favour?

 

I have around £150 per month disposable income so thought the lump sumoffer would seem attractive to them - what will they gain if successful? I havent any assetts to speak of.

 

Any info would be appreciated.

[Dangermouse]

The bank obviously feel that you have no real prospect of a defence. You should be careful here, even if they are unsuccessful in the claim for summary judgement, the Judge may look at costs and order that they are awarded "in the case". That will mean that if you loose the case at trial, you wiill also end up paying the costs of their failed summary judgement application.

 

Do you not have a solicitor acting for you?

 

Dangermouse

[smouk]

They must have requested some info from the MD as a couple of weeks before the signing he sent them a letter stating I had 40%!!

 

I only found this out a couple of weeks ago when the banks solicitors sent me a copy - I have never had shares and this is confirmed by all documents registered with companies house. The banks solicitors also claimed I was a director at the time of signing, however, it was a couple of months after the signing that the MD finally gave me the form to complete, so it was impossible for them to have had any factual proof at that time.

This could be the key! Where is the MD now?

[cbrman599]

Hi thanks for the replies -I do have a solicitor acting for me. He thinks a better angle for us is to make a claim against the banks solicitors for not giving true indpendent advice etc for the signing.

 

The MD set up another company late last year, I dont know his financial status or anything though.

 

Why do you ask?

[smouk]

The MD induced the situation and then dropped you right in it!....

 

".....as a couple of weeks before the signing he sent them a letter stating I had 40%!!"

 

If you had no part in that lie then the MD conspired with others to deceive the bank.