Travis Perkins £35k Personal Guarantee being demanded (left company 2 years prior)

[CaptainOats]

Hello,

 

Unfortunately in a bad situation which brings me to the website. I've had a look around at a few threads in relation to Personal Guarantees from Travis Perkins and other trade companies. Long story short:

 

• I sold my shares in a business a couple of years ago
• Still showed as active on Companies House until more recently (Directors never removed me and I didn't notice)
• Wasn't aware of the personal guarantee at all (signed back in 2017) and it was for an agreed £10k, the debt is now £35k and the guarantee is the same as my example below (unlimited, joint & severable)
• Company has informed creditors recently that it's trading insolvent and cannot pay.
• Travis have sent a letter demanding payment (joint and severable) across 3 Directors (none of which are current)
• It wasn't secured on anything
• I have other companies (do they count as assets?) 

 

I'm wondering what to do... I've put in an offer relative to the value of shares I had which equates to 10% of the debt. This has been rejected and demand for full payment remains.

 

I've read this thread: https://www.consumeractiongroup.co.uk/topic/400364-personal-guarantee-quottravis-perkinsquot-now-being-called-upon/

 

But there was never a confirmed outcome and it went cold. One of the Directors under the guarantee has a Debt Relief Order which was after the original document was signed (I believe this is what it's called). Does this impact his liability?

 

I was never aware that the limit had been increased several times over the period and continued to rise after I'd left the business. I've found some case law below and it doesn't look great (although both cases on this example seem very similar?),  by the sounds of it:

 

https://www.keystonelaw.com/keynotes/personal-guarantee-liability-all-change-for-company-directors

 

I'm unsure how to play it... I don't have the money to pay it (nor morally should I be). I have a mortgage but it's in joint names with a family member. 

 

Please help, the stress is making me ill.

Edited February 13, 2020 by CaptainOats

[AndyOrch]

Hi and Welcome to CAG

 

So who has sent this demand ..Travis direct or a Solicitor..or a DCA ?

 

Andy 

[CaptainOats]

Hi Andy,

 

Thank you and thanks for the reply!

This has been sent from Travis directly at the moment.

 

It's a letter demanding payment within 7 days or they'll send a statutory demand.

That 7 days elapsed the day the letter was received (checked with the other directors and we all received it the same time on the expiry notice date!).

 

Since then we've all been in contact and have requested further information on the credit limits, copy of the agreement etc.

[AndyOrch]

So there not bothering with legal representation or Pre Action Protocol..just issuing a demand and threats.I would stick together the three of you and converse and wait until something further arrives that substantiates the appropriate protocol to be followed and Legal.....come back if and when.

 

Andy

[CaptainOats]

If it makes any difference, it's their 'Group Corporate Recoveries'. Worth doing a Subject Access Request early on so if things start moving quickly I have a full picture?

 

Going by a deep dive on Google Travis are notorious for bankrupting people via personal guarantees. Out of curiosity, would I have any grounds based on the below? I fished this from an old thread on the site on 2011:

 

Quote

 

Section 4 of the Statute of Frauds 1677, in force this day and applicable to Guarantee Agreements, the instrument to which the claimant asserts peebeeh is bound by and seeks to enforce the same, must be evidenced in writing.

 

S4 of the 1677 Act;

 

"No action shall be brought…whereby to charge the defendant upon any special promise to answer for the debt, default or miscarriages of another person…unless the agreement upon which such action shall be brought or some memorandum or note thereof shall be in writing and signed by the party to be charged therewith or some other person thereunto by him lawfully authorised."

 

Should the claimant in this case substantiate his claim with the producing of the alleged Guarantee Agreement, then the matter for the court to decide upon becomes a question of whether such contract was signed by the defendant (peebeeh) in the capacity of Director of the Company or signed in his personal capacity, if it is found that peebeeh signed any such contract as ‘John Smith’ the Director then the claimant cannot succeed to enforce the same against peebeeh as ‘John Smith’ the natural person since ‘John Smith’ the natural person did not act as guarantor for the said Company.

 

 

This is what the agreement says (copied from another thread):

 

Quote

 

HEADER: CREDIT ACCOUNT APPLICATION

 

SUB SECTION WITHIN FORM:

PERSONAL CREDIT GUARANTEE to be completed by director(s) of a limited company/members of LLP

 

In consideration of your agreement to supply goods on credit to the Company described above applying for credit herein ('the company')

I/We the undersigned being Director(s)/member(s) of the Company/LLP hereby unconditionally and personal, jointly and severely guarantee payment of all monies due and owing by the Company to Travis Perkins Trading Company Limited, its subsidiaries and successors, including all monies due and owing by reason of any increase in the credit limit granted by Travis Perkins Trading Company Limited from time to time following review of the company's credit account and note the additional terms below,

 

For any personal credit guarantee

(1) any credit limit on a credit account being the initial credit limit, which would be subject to increase; and

(2) if the credit amount is increased, it will be covered by the personal guarantee and notice of increase to the customer is deemed to be notice to the Personal Guarantor and if the customer uses the increased credit limit, then this is deemed consent be the Personal Guarantor to the increase in credit limit.

 

 

Thank you!

[ericsbrother]

what is most pertinent is your relationship with the company that owes the money.

 

TP have sued people before who are no longer employed by the defaulting co and as they can't prove a relationship was extant at the relevant time the individual didnt owe the money.

 

Now that wouldnt apply to a director.

 

A big question that will be difficult to get an answer for is why did TP extend the credit limit without doing due diligence or were you all directors at the time and have only left after that time?

[slick132]

Hi Capt O,

 

1. Are you on speaking terms with the co Directors of the relevant Ltd Co, to compare notes and discuss tactics.

 

2. You say you weren't aware of the Personal Guarantee signed in 2017 for just £10K at the time -  have you now been made aware of a signed guarantee. The T&C's of any such Guarantee will be crucial to your liability.

 

3. You refer to "3 Directors, none of which are current". Were any of them still actively involved in day to day trading activity of the Ltd Co immediately before the current insolvency issue.

 

Looking at the 2nd link in your post #1 above (Keystone Law),  Points 1 to 4  of Item #2 will be important so you may want to 

tell us more on these points.

[dx100uk]

https://cse.google.com/cse?cx=partner-pub-8889411648654839:3134625398&q=travis perkins&oq=travis perkins&gs_l=partner-generic.3...65622.73939.0.74787.15.15.0.0.0.0.132.1152.13j1.14.0.gsnos%2Cn%3D13...0.3985j1362129j14...1j2.34.partner-generic..15.0.0.ICAi0aJANn8

[CaptainOats]

@ericsbrother

Sorry for the slow reply!

 

I am on ‘thin‘ speaking terms with the remaining current director and on good terms with the other 2 ex directors.

One of them sold his shares in the business a few months before the business was down as trading insolvent. 
 

The limits I believe were increased at the end of 2017 and then again at some point in 2018 - we are struggling to find out at the moment.

 

The limit went up to over 5x the original amount, despite multiple occasions where the account had been put on stop or gone overdue in the past.

 

@slick132

1. Yes - although we separately put initial offers in (not admitting liability) for full and final settlement, both were rejected. We are now on a united front as best we can be.

 

2. I’ve requested it again, I’ve seen a digital that was sent to the other director (so they do have it) but have requested this personally a couple of times now to no avail. 
 

3. Yes - 3 months prior to insolvency the other director sold his shares in the company. 

 

Looking back at the links on points 1-4 and will edit my response in a minute!

Thanks for your help so far, appreciated.

 

Looking back at the links on points 1-4 - I don't really know what else to add as the terms of the guarantee are the ones I pasted in my reply #3 - as far as I'm aware there's not any more than that in the guarantee