We were contacted by a former company director whose company had gone into liquidation. He had given a personal guarantee to a finance company to support the purchase of some computer equipment for the company.
When his company failed to pay the money due to the finance company it relied on the personal guarantee to bring a county court claim against the director.
How we helped
We reviewed the terms of the directors’ personal guarantee and concluded it was a valid guarantee. However, we decided there might be arguments that we could use to help him reduce the amount he had to pay to the finance company to settle the claim against him, even though he was also facing court proceedings.
We made sure he complied with the court’s timetable to protect his position and avoid judgment being entered against him for not replying to the finance company’s claim.
We also advised him on how we might negotiate an end to the court claim.
The result
As we were able to start negotiations with the finance company’s solicitors quickly, we managed to avoid having to prepare a defence on behalf of our client (which can be expensive).
We put forward an offer which the finance company accepted – 30% of the amount claimed from our client.
Our client, the former company director, avoided the stress of a court claim and paid a vastly reduced amount, which included a contribution to the finance company’s costs, to settle the claim.
For more information or advice on directors personal guarantees, please contact Ros Keen.
Posted on August 24, 2017