Strange question

[fcumred]

Hi, not sure if anyone can help here but I have recently taken a job with a hotel owner. At first everything seemed all fine, but then I started to hear whispers that he was in financial bother and struggling. Finally he's come clean that he is going to be declaring himself bankrupt very soon as he had a business venture in a nearby city that went very badly and he lost his house and now the pub company are chasing him for £150k which quite frankly he doesn't have.

 

I've since found out that the company he formed to run the hotel I work at owes one hell of a lot of money. So not only has he ran up huge debts in the city venture, he's now ran up huge debts with a new company as well. So much so that the gas and electric supplier are looking to disconnect his supply.

 

Where it gets difficult is he has now assigned the lease on his business to his cousin before going bankrupt so that the OR doesn't take the hotel from him. He is now claiming to the gas company that the hotel is under new ownership and therefore they are unable to disconnect the supply because the money owed is for a company that no longer exists ( albeit the tax man is now refusing to delist the company because of tax arrears ).

 

Basically the questions I want to find answers to are :-

 

1) Can he legally transfer ownership of his hotel to his cousin to try avoid losing it to the OR. Surely the OR will spot what he's done and reverse the assignment.

 

2) Can the companies object to the bankruptcy if they realise that all he is doing is assigning his business to someone else to avoid paying them what he legally owes.

 

3) If he is succesful in declaring himself bankrupt and clears off all those debts can he then have the hotel re-assigned back to him and therefore basically he's got off scott free from all his debts and lost absolutely nothing in the process.

 

4) I live on site in the hotel. Supposing the situation were that the OR took the hotel in the end, where do I stand legally as I have given up everything to move into the hotel. I would have no home, nowhere to go and basically would be jobless if the hotel gets taken over by the OR.

 

I am quite worried as I want to know exactly where I stand on this and more to the point, feel utterly disgusted that the owner has ran up huge debts and is simply going to get off scott free when the rest of us have to end up paying back what we owe.

 

Your comments would be greatly appreciated

 

Thanks

[Smileymiley]

Speak to the Insolvency Service or even Citizens Advice. My gut reation to question 2 is No as it is only the court who can decide who is judged to be bankrupt.

[toddle2u]

1) Can he legally transfer ownership of his hotel to his cousin to try avoid losing it to the OR. Surely the OR will spot what he's done and reverse the assignment. The OR will look to reverse this assignment and take control of the hotel.

 

2) Can the companies object to the bankruptcy if they realise that all he is doing is assigning his business to someone else to avoid paying them what he legally owes. I assume he has applied to companies house to have the company struck off and HMRC have objected? If this is the case yes they can object to the strike off. HMRC may then apply to the courts to have the company wound up and the affairs of the company will then be passed to the OR to deal with. As per point 1 the OR would then look to have the assignment reversed if it looks like a transaction at under value or that it happened very close to the winding up. In this instance is certainly looks the case.

 

3) If he is succesful in declaring himself bankrupt and clears off all those debts can he then have the hotel re-assigned back to him and therefore basically he's got off scott free from all his debts and lost absolutely nothing in the process. If the OR is unsucessful in having the assignment reversed your boss would not be able to have the hotel assigned back to him whilst he is an undicharegd bankrupt.

 

4) I live on site in the hotel. Supposing the situation were that the OR took the hotel in the end, where do I stand legally as I have given up everything to move into the hotel. I would have no home, nowhere to go and basically would be jobless if the hotel gets taken over by the OR. If the hotel could be run at a profit the OR may opt to contiune to trade it in Administration whilst he found a buyer for it. However, this is most unlikely as he would more than likely just close it down, make everyone redundant and sell the property and get whatever profit he can from it once the mortgage or any charges are paid off (assuming there are some)

 

I find it hard to believe that your boss will get away with what he is planning.

[BRIGADIER2JCS]

I think it could be far more serious

with HMRC involved tax evasion can

lead to a prison sentence and barring

from being a director of any company.

[debtinfo]

I think a key question here is this, before any funny business went on, who owned the lease, the guy or the limited company

[crabbingtime]

I have to agree with Debtinfo. Who owned the lease?

 

If the individual owned the lease then in Bankruptcy the OR would more than likely appoint a Trustee from the Private Sector to deal with the disposal of the lease for potentially no consideration. He would more than likely obtain a valuation and demand the sum.

 

If the company owned the lease and was subsequently wound up the OR again would more than likely appoint a Liquidator from the Private Sector to look at the transaction. If a TUV has taken place the Liquidator would more than likely value the lease and make demands for value.

[fcumred]

I will try explain it, as best I can.

 

THe boss bought a pub freehold. He was trading well and then took out a huge loan secured against the value of his house using a beer company as financer. He then got into alot of debt borrowing money he could never afford to pay back and ultimately the beer company then sought their money back They were going to force the sale of his house, but he managed to sell it just in time before they could force reposession on him. He then sold the freehold to the pub to a property owner who as part of the deal offered him a lease on the current pub he has. He took what money he had left and rather than pay off what he owed used it to renovate the current property. Or so this is what he's told everyone, but the builder who did the work has now filed for bankruptcy and the official receiver in the builders bankruptcy case is now seeking £30k that is still owed to him from my boss.

 

When he took over the new pub he retained the same company name as he used for the first pub. However, everyone soon realised where he was and began chasing him for money. He was still running up huge debts ie gas bill, HMRC, VAT etc etc.

 

He has now got a solicitor to sort out assigning his business to his cousin, transferring all the assets of the company to his cousin whilst claiming to people like the gas company that the gas he's used was for the old company and therefore he isn't liable for it. He is, to all intents and purposes telling them that the old owner ( himself ) is the one who owes the money and they need to chase that person, knowing fine well he is going to declare himself bankrupt the moment the lease is signed over to his cousin. Once its signed over, he is then going to go bankrupt, but still run the pub as manager for his cousin. Once the bankruptcy is dissolved and he's in the clear again then I suspect he will suddenly have his cousin sign it back over to him and he then becomes the owner of the lease again. His intention is to basically circumvent the OR and keep the pub business without having all his assets taken away. He stays in the pub, he manages the pub, he is, to all intents and purposes still the owner, but he is hoping to get rid of almost £300k worth of debt and not have to explain how come some of the money he owes relates to the very business he is sat operating on his "cousins" behalf.

 

As a side note, I have since found out he also took out a mortgage on his mothers house in a joint agreement with her. The mortgage company have written to him to tell him that its just an interest only mortgage and by 2014 they want their money back ( about £120k ) and they are asking for evidence that he has the funds or the means to repay it on time. He's written to the mortgage company asking them to defer him repaying that money until his mother dies ( she is 89 ). Whether they will agree to that I don't know, but surely if he declares himself bankrupt they will force the sale of the house anyway and his 89 year old mother will end up on the street.

 

Basically, the more I find out about this bloke, the worse it seems to get. His debts make the greek government look like reliable...

[debtinfo]

ok lets start with the basics, when you say company, do you mean he has had a limited company (or more than one) or do you mean he has a buisiness as a sole trader

[fcumred]

ok lets start with the basics, when you say company, do you mean he has had a limited company (or more than one) or do you mean he has a buisiness as a sole trader

 

The first company was a Private Limited Company registered at Companies House. He has attempted to get this company dissolved but the tax man has objected until he pays them what he owes. His cousin then formed a company and that is the company they are currently trading under. Again this company is listed at Companies House. They are now arranging the assignment of the lease from the old company to the new one even though to all intents and purposes they've been trading under the new companies name long before the assignment is made

[debtinfo]

ok then, well as far as the OR in his bankruptcy is concerned then the transfer of the lease is not in their jurisdiction as the transfer is between 2 limited companies and not from his personal estate, one thing the OR migh be interested in is if he is running the company set up by his cousin rather than his cousin running it as this is called being a shadow director and obviously not allowed.

 

The transfer of the lease may be of interest to any liquidator of the original company if one is appointed

[fcumred]

The owner would most definitely be running the establishment exactly the same as he has been. He will be operating the business, ordering, selling rooms, promoting it as he has done since day one. THe only difference will be that all the bills are in the new companies name ( his cousins limited company ) as his old company is defunct. All day to day decisions will be made by him, with his cousin having absolutely no say in the running of the hotel whatsoever. ( he lives over 150 miles away )

 

To all intents and purposes he will still be the owner and operator of the business. He will still live in the hotel. He will run it as his own, its just that the lease is in his cousins name and all the assets no longer "technically" belong to him.

 

With regards to what happens after the lease has been assigned, I am aware that the owner was lent some money from the landlord for renovations of the hotel. That was a deferred loan not due for repayment till 2013. Because he's assigning the lease what the landlord is doing is asking for his cousin to take on the loan with a "personal guarantee" from the current owner.

 

How does the landlord of the building stand in terms of that loan. Can the owner of the business assign the lease then say "sorry I am bankrupt, you won't get your money back". Also, surely the OR would take a very dim view if it came to light that he was in fact repaying the landlord "undercover" without declaring it to the OR. The way I interpret it, the OR is the only person who can determine who gets paid, and if he is paying money that could go towards paying other creditors without telling anyone, he would be breaking the law.